First Thing Today | April 28, 2023

Soybean futures traded higher overnight, while corn and SRW wheat failed to sustain earlier corrective buying.

Pro Farmer's First Thing Today
Pro Farmer’s First Thing Today
(Pro Farmer)

Good morning!

Varied price tone this morning... Soybean futures traded higher overnight, while corn and SRW wheat failed to sustain earlier corrective buying. As of 6:30 a.m. CT, corn futures are trading mostly 2 to 3 cents lower, soybeans are 3 to 10 cents higher, SRW wheat is fractionally to a penny lower, HRW wheat is around 2 cents higher and HRS wheat is 2 to 4 cents higher. Front-month crude oil futures are modestly firmer while the U.S. dollar index is more than 500 points higher.

EPA to announce waiver for summer E15 sales... Biden administration officials have decided to issue an emergency waiver that will allow widespread sales of E15 gasoline this summer, following a strategy used last year to help tamp down high pump prices, Bloomberg News reported. The waiver, set to be announced by EPA today, will temporarily exempt the 15% ethanol blend fuel from volatility requirements that effectively block sales from June 1 to Sept. 15 throughout much of the country.

Flooding halts barge traffic on Upper Mississippi River... All locks and dams above Lock 17 (near New Boston, Illinois) on the Mississippi River are closed for three weeks due to flooding, according to USDA’s Grain Transportation Report. Expected high waters could potentially close river traffic as far south as Lock 22 (near Saverton, Missouri) for two weeks, starting around May 5. Restricted barge traffic will slow grain movement down the river and fertilizer movement up from the Gulf.

Mexican official criticizes U.S. request for consultations on its GMO policy... The Biden administration’s request for consultations under the U.S.-Mexico-Canada Agreement (USMCA) over Mexico’s plans to halt imports of GMO corn for food is simply Washington bowing to pressure from seed companies and is an “unacceptable violation” of Mexican law, Mexican Deputy Agriculture Minister Victor Suarez said. “The United States’ request to Mexico follows the interests of seed, agrochemical, and other food-producing oligopolies.” He also reiterated the Mexican stance that the ban on imports of GMO corn for food use “does not affect U.S. corn producers in any way.” Suarez said, “It is the U.S.’ own agricultural and trade policies, as well as its food development model, which distorts prices and creates gaps between small-scale producers and large transnationals.” The Biden administration argues limiting the ban on imports to GMO corn for food use is not a science-based decision.

French wheat conditions record-high... France’s wheat crop was rated 94% good/excellent as of April 24, the highest on record for the date, according to the country’s ag ministry. Recent rains have improved crop conditions after a dry winter.

Boozman: Reference prices must be raised... Sen. John Boozman (R-Ark.), ranking member on the Senate Ag Committee, said reference prices must be updated “or I’m not voting for the farm bill.” His big push on reference prices shows he’s set on raising payments for commodities such as rice for which Arkansas is the leading U.S. producer.

Debt-limit update... House Speaker Kevin McCarthy (R-Calif.) is urging President Joe Biden and Democrats to avoid a debt-ceiling crisis by embracing the Republican bill the House passed on party lines. McCarthy in an interview with Bloomberg TV said Biden put the economy in “jeopardy” by not negotiating. The last time they met on the debt ceiling, he said, was Feb. 1 — 85 days ago. “There’s two things I will not do, Mr. President. I will not raise taxes and we will not raise a clean debt ceiling. But we can talk about everything else,” McCarthy said, adding the “Senate’s done nothing.” Biden continues to refuse to cave to GOP demands to attach budget cuts to raising the $31.4 trillion debt limit, although he has signaled openness to “separate” budget discussions. “I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” Biden said. “That’s not negotiable.”

Euro zone GDP grows marginally in Q1... The euro zone economy grew by just 0.1%, missing market consensus of a 0.2% expansion, amid a surge in inflation and following the fastest pace of policy tightening by the European Central Bank (ECB) in over 20 years. Among the bloc’s largest economies, Germany registered no growth, while the economies of France, Italy and Spain expanded.

World Bank to ECB: Tread carefully... While backing further rate hikes, the International Monetary Fund said the European Central Bank (ECB) needs to tread carefully. “The recent banking-sector problems illustrate how liquidity strains and financial stress can surface abruptly,” the Washington-based lender said. “Another stress episode could erode buffers, especially among banks with weaker fundamentals, and sharply tighten credit and broader financial conditions.”

BOJ keeps rates unchanged... The Bank of Japan (BOJ) maintained its short-term interest rate at -0.1% and 10-year bond yields at around 0% by a unanimous vote but modified guidance on its policy rate by removing reference toward the need to guard against risks from the Covid pandemic and to keep interest rates at “current or lower levels.” In newly appointed Governor Kazuo Ueda’s first meeting, the board also decided to conduct a broad-perspective review of the monetary path, with a planned time frame of around 1 to 1-1/2 years, saying its policies “have interacted with and influenced wide areas of Japan’s economy.”

Packers slow playing cash cattle trade... Cash cattle trade picked up Thursday afternoon at higher prices. But with a fresh supply of contracted animals available with the flip of the calendar next week, packers appeared content to do some fill-in buying without aggressively raising cash prices. Meanwhile, wholesale beef prices continue to strengthen, with Choice up $1.83 and Select $1.15 higher on Thursday, keeping packer margins solidly in the black.

Cash hog fundamentals still sputtering... The CME lean hog index is down 2 cents to $71.29 (as of April 26), ending a modest two-day uptick in prices. That could pressure nearby lean hog futures, as the May contract finished Thursday $6.835 above today’s cash quote while the June contract held a $18.81 premium. The pork cutout value firmed 44 cents yesterday but packers have struggled to find sustained retailer demand in the upper $70.00 range. Movement totaled only 274.3 loads on Thursday.

Overnight demand news... Exporters reported no tenders or sales.

See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.

Today’s reports