Good morning!
Beans firmer, corn near unchanged and wheat mixed overnight... Soybeans strengthened overnight, along with soymeal and soyoil, while corn traded in a tight range around unchanged and wheat was widely mixed. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are 3 to 5 cents higher, SRW wheat is 7 to 9 cents lower, HRW wheat is mostly a penny higher and HRS wheat is trading fractionally on either side of unchanged. The U.S. dollar index is down more than 300 points while front-month crude oil futures are trading near unchanged.
Central U.S. to remain wet... Heavy rains fell across areas of the Corn Belt and Plains during the weekend. World Weather Inc. says the weather pattern will remain wet over the next week to 10 days with field ponding and localized flooding in some areas, resulting in fieldwork delays.
SAF credit announcement expected this week... With EPA Administrator Michael Reagan appearing twice this week before congressional panels, earlier predictions that updated news about the model used to implement the Sustainable Aviation Fuel (SAF) program was at hand proved true. Word is the info will come Tuesday. Of note, USDA Secretary Tom Vilsack says the coming info is just a “placeholder” for likely further changes ahead. That is code for some producers may not like the coming news.
The week ahead in Washington... Both the House and Senate are in session this week as hearings on fiscal year 2025 accelerate with a host of Biden administration officials testifying. Chief U.S. Ag Trade Negotiator Doug McKalip today will address a meeting of the National Farm Broadcasting (NAFB), which will likely see him face questions on the U.S./Mexico dispute over GMO corn, the dairy battles with Canada and overall agricultural trade issues. The economic focus will be on the Federal Reserve’s monetary policy meeting, which concludes on Wednesday. No changes to monetary policy are expected, but traders will closely monitor the post-meeting statement and Fed Chair Jerome Powell’s comments for clues to when rate cutting may commence. Employment data for April will be released on Friday.
Cargill expects busy Brazil grain exports during second half of 2024... Brazil’s grain exports will pick up in the second half of this year amid ample supplies, Cargill’s Brazil President Paulo Sousa said, though he did not predict actual volumes. Sousa said the soybean production estimate may be revised upward, as his company feels the crop “is not that much worse than last year.” For safrinha corn, Sousa noted: “The second-corn crop is not going to be a record like last year, but it is looking very good.”
Heavy rains threaten China’s rice crop... Heavy rains are expected this week across southern China, the country’s top rice producing region. Low-lying areas face the risk of additional flooding, China’s weather bureau said. Early rice varieties, usually planted in March and harvested in July, account for about 14% of China’s total output of the grain.
China to extend tariff exemptions for imports of some U.S. products until Nov 30... China will extend tariff exemptions for imports of some U.S. products until Nov. 30, the finance ministry said, without providing further details. The previous exemptions were set to expire Tuesday.
China’s industrial profits decline in March... China’s industrial profits fell 3.5% from year-ago in March. Cumulative profits of China’s industrial firms rose 4.3% from last year to 1.5 trillion yuan ($207.0 billion) in the first quarter, National Bureau of Statistics (NBS) data showed, slower than a 10.2% rise in the first two months. Profits in state-owned firms fell (-2.6% vs. 0.5% in January-February) while those in the private sector sharply slowed (5.8% vs. 12.7%).
PBOC expands warning on bond investments to regional banks... The People’s Bank of China (PBOC) has advised some regional lenders to curtail their ultra-long bond investments to mitigate risks, people familiar with the matter told Bloomberg. City and rural commercial banks in at least two eastern provinces were instructed in recent weeks to avoid significant exposure to these securities. Under the guidance from local branches of PBOC, the regional banks have also been asked to reduce duration and leverage on bond holdings, the people said. The latest directive follows similar guidance to rural lenders earlier this month to cap their exposure to ultra-long debts. Investors have been drawn to sovereign notes this year, betting that the central bank will ease monetary policy to support an economy grappling with sluggish demand and a property crisis.
Euro zone economic sentiment drops in April... The economic sentiment indicator in the euro zone dropped 0.6 points to 95.6 in April, driven lower by a sharp decline in confidence among manufacturers, which reached its lowest level since July 2020. Morale also worsened among service providers, retailers and constructors, while sentiment among consumers improved slightly. The consumer inflation expectations index decreased 0.7 points to 11.6, while the gauge for selling price expectations among manufacturers edged down 0.1 point to 5.4.
Gold-standard test shows U.S. pasteurized milk safe, H5N1 found in Colorado... FDA late last Friday said preliminary results from gold-standard PCR testing showed pasteurization killed the virus in milk and baby formula. It did not say how many milk products it had tested but added that it plans to do more testing on 297 products from 38 states. Meanwhile, USDA confirmed dairy cattle in Colorado tested positive for the virus, the ninth state with a known outbreak.
APHIS issues clarification on lactating dairy cow movement order... USDA’s Animal and Plant Health Inspection Service (APHIS) issued a clarification concerning the movement of lactating dairy cattle through markets and auctions to slaughter. The intrastate movement of lactating dairy cows to sale barns does not fall under the Federal Order, which goes into effect today. However, if these cows are then moved interstate from the sale barns directly to slaughter facilities, they must be accompanied by a Certificate of Veterinary Inspection (CVI), which certifies the animals are clinically healthy. No additional testing is required for these movements. This guidance is particularly aimed at ensuring small farms can continue to cull cattle efficiently while addressing potential animal welfare concerns. It primarily affects states where direct movements to slaughter are restricted but where cattle are typically consolidated at sale barns and auctions before being moved as a “lot” to slaughter facilities out of state. The clarification was issued promptly to assist these farms in planning and compliance ahead of the new regulations.
Wholesale beef movement stays strong... Wholesale beef prices firmed 22 cents for Choice, while Select dropped 94 cents on Friday. Packers are struggling to strengthen wholesale prices but there has been a string of 100-plus loads of movement. Despite near-record retail prices, it appears retailers are gearing up for active beef features for the upcoming grilling season and “beef” holidays.
Cash hog index declines... The CME lean hog index is down 55 cents to $90.88 as of April 25, the second straight daily decline. May lean hog futures finished last Friday $3.395 below today’s cash quote, while the June contract held a $11.595 premium. Futures could face followthrough selling today after sharp losses and finishing on their weekly lows Friday.
Weekend demand news... Algeria tendered to buy up to 160,000 MT of corn from Argentina or Brazil and 70,000 MT of optional origin soymeal.
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
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Egg Products — NASS
- 2:00 p.m. Meat Animals PDI - Statistical Bulletin — NASS
- 2:00 p.m. Milk Disposition and Income - Statistical Bulletin — NASS
- 2:00 p.m. Poultry Production and Value - Statistical Bulletin — NASS
- 3:00 p.m. Crop Progress — NASS