Good morning!
Grains weaker overnight... Winter wheat markets and corn futures faced followthrough selling overnight, while soybeans mildly eased from Monday’s gains. As of 6:30 a.m. CT, corn and soybean futures are trading mostly a penny lower, winter wheat markets are 6 to 9 cents lower and spring wheat is 3 to 4 cents lower. The U.S. dollar index is around 175 points higher and front-month crude oil futures are about 40 cents higher.
HRW, SRW crops continue to trend in opposite directions... USDA rated 49% of the winter wheat crop as “good” to “excellent,” down one point from the previous week. The portion of crop rated “poor” to “very poor” stayed at 16%. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped another 8.2 points to 317.4, led by a 4.8-point decline in top producer Kansas. The SRW crop improved 1.5 points to 387.0, led by a 1.3-point rise in top producer Illinois. The HRW CCI rating has declined 28.0 points since the initial level this spring and is now 6.0 points under the final mark from last fall. The SRW CCI rating has increased 15.5 points since the beginning of spring and is now 15.4 points above the final level ahead of dormancy. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of April 28:
- Winter wheat: 49% good/excellent (50% last week); 30% headed (21% five-year average).
- Corn: 27% planted (22% average); 7% emerged (4% average).
- Soybeans: 18% planted (10% average).
- Spring wheat: 34% planted (19% average); 5% emerged (5% average).
- Cotton: 15% planted (14% average).
Cordonnier cuts Argentine corn crop estimate... South American crop consultant Dr. Michael Cordonnier lowered his Argentine corn crop estimate 1 MMT to 49 MMT, citing variable yields and impacts from corn stunt disease which will be greater in later-harvested fields. He warned the Argentine corn crop estimate could decline further. Cordonnier kept his Argentine soybean crop estimate at 51 MMT. He also kept his Brazilian crop estimates at 147 MMT for soybeans and 112 MMT for corn.
Attaché forecasts below-average Aussie wheat production... USDA’s attaché in Australia forecasts the country’s wheat production at 25.8 MMT in 2024-25, down 200,000 MT from 2023-24 and 3% below the 10-year average. The attaché notes it’s a “tale of two,” with farmers in the eastern states entering the 2024-25 growing season with ample soil moisture and a favorable weather outlook while conditions are dry and the forecast lacks meaningful moisture for those in Western Australia and South Australia.
More Russian wheat shipments to Egypt delayed... Two vessels carrying wheat purchased by Egypt’s state grain buyer are facing delays in Russia, two sources with knowledge of the matter told Reuters. Wadi Tiba and Edfu, both loaded with around 60,000 MT of wheat purchased by the General Authority for Supply Commodities (GASC), have been stuck for weeks in Russian ports, the sources said. One source said the ships have been delayed despite being inspected and approved for shipment by Egypt’s agricultural quarantine. Two other vessels purchased by GASC also faced delays in March and April but eventually received phytosanitary certificates from Russian authorities and were released for shipment.
Mixed signals from China’s April factory activity... China’s official purchasing managers index (PMI), which gauges larger and state-owned factories, declined to 50.4 in April from March’s 12-month high reading of 50.8. While that marked a second straight month of expansion in China’s vast manufacturing sector, new export orders grew at a much slower rate while employment continued to shrink. The Caixin/S&P Global manufacturing PMI, which measures smaller and privately owned factories, rose to 51.4 in April from 51.1 the previous month, marking the fastest pace since February 2023 amid a solid uptick in new export orders.
Beijing to step up support for economy facing ‘many challenges’... China will step up support for its economy with prudent monetary and proactive fiscal policies, including interest rates and bank reserve requirement ratios (RRR), the Politburo of the Communist Party was quoted as saying by state media. The party’s top decision-making body said it would be flexible with policies, with investors expecting more stimulus measures. “The sustained recovery and improvement of the economy still face many challenges,” the Politburo said, according to Xinhua news agency. The Politburo pointed to problems such as insufficient demand, huge pressures on firms, risks and hidden dangers in key areas of the economy, while noting “China’s economic foundation is stable, with many advantages, strong resilience, and great potential.” The party’s central committee will gather in July for a key meeting known as a plenum, the third since the body of elite decision makers was elected in 2022, focusing on reforms amid “challenges” domestically and abroad.
Yen intervention highly likely... Japanese officials may have spent 5.5 trillion yen ($35.06 billion) supporting the currency on Monday, Bank of Japan data suggested. Japan’s current top currency diplomat Masato Kanda said on Tuesday authorities were ready to promptly deal with foreign exchange matters but declined to comment on whether the finance ministry had intervened to prop up the yen. The yen rebounded sharply from its weakest level against the dollar in 34 years on Monday amid speculation Japan intervened to support its currency for the first time since 2022 but gave up some of those gains overnight.
Euro zone rebounds from mild recession in Q1, core inflation eases in April... GDP in the euro zone expanded 0.3% from the previous quarter and 0.4% annually during the first quarter of 2024, according to the initial reading of data. The bloc’s fourth quarter 2023 GDP was revised down to negative 0.1% from a previous 0.0%, meaning the euro zone was in a technical recession during the second half of 2023. Meanwhile, euro zone headline inflation held at 2.4% above year-ago in April, while core inflation minus food and energy costs fell for a ninth straight month to 2.7%.
WHO: Risk of H5N1 spreading to cattle outside U.S.... A World Health Organization (WHO) official said there was a risk of the H5N1 virus spreading to cows in other countries beyond the U.S. through migratory birds. “With the virus carried around the world by migratory birds, certainly there is a risk for cows in other countries of getting infected,” said the head of WHO’s Global Influenza Program. She reiterated WHO deems the overall public health risk posed by the virus to be low but urged vigilance.
Hefty cattle sales amid higher prices... The average cash cattle price increased $1.48 last to $184.15, ending a four-week skid. Packers bought a hefty 93,000 head of cattle in the negotiated market last week, including 24,000 head “with time.” That could damper packer demand for cash cattle this week, especially with fresh contracted supplies available with the flip of the calendar. Some cash sources are still hopeful of steady/firmer cash prices this week.
Cash hog index extends mini slide... The CME lean hog index is down 52 cents to $90.36 as of April 26, the third consecutive daily decline. That marks the first three-day slide in the cash index since the seasonal rally started at the beginning of the year. The pork cutout value firmed $1.37 on Monday, fueled by a $4.38 rise in bellies and a $2.54 increase in hams.
Overnight demand news... South Korea purchased 134,000 MT of optional origin corn. Turkey provisionally sold 100,000 MT of durum wheat to an unknown destination.
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
- 2:00 p.m. Agricultural Prices — NASS