Good morning!
Wheat firmer, corn and beans weaker overnight... Wheat futures were supported overnight by the bigger-than-expected decline in crop condition ratings, while corn and soybeans faced selling pressure. As of 6:30 a.m. CT, corn futures are trading 3 to 6 cents lower, soybeans are 4 to 8 cents lower, SRW wheat futures are 2 to 3 cents higher, HRW wheat is 3 to 6 cents higher and HRS wheat is 7 to 9 cents higher. Front-month crude oil futures are around 75 cents higher and the U.S. dollar index is modestly lower but well off its overnight lows.
HRW CCI rating plunges from last fall, SRW rating improves... When USDA’s first weekly crop condition ratings of the spring are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop plunged 23.3 points from last fall to 257.0. That was 15.6 points below last year at this time. The SRW CCI rating improved 3.5 points from last fall to 363.8. That was 21.6 points above last year’s rating at the beginning of April. Click here for more details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of April 2.
- Winter wheat: 28% good/excellent (34% at the end of November; 30% last year); 4% headed (2% five-year average).
- Corn: 2% planted (2% average).
- Cotton: 4% planted (5% average).
Consultant leaves South American crop estimates unchanged... Recent rains have stabilized crops in Argentina. As a result, South American crop consultant Dr. Michael Cordonnier kept his Argentine crop estimates at 26 MMT for soybeans and 36 MMT for corn. He also kept his Brazilian crop estimates at 151 MMT for soybeans and 121 MMT for corn.
India plans to relax wheat procurement regs... India will relax norms to procure wheat from farmers amid untimely rainfall and hail which damaged the crop just before harvesting in key producing central and northern states, government officials and traders told Reuters. “We have allowed Madhya Pradesh state to procure wheat even with 10% loss in luster. If required we would take call for other states and other parameters such as moisture,” a senior government official said. The wheat crop has also been damaged in Punjab and Haryana because of rainfall the past few days and the government will likely make similar changes in the procurement rules for these states.
Yellen: Banks ‘stabilizing’ after failures... U.S. banks are “stabilizing” though regulators stand ready to repeat the extraordinary actions taken in March to contain depositor runs, according to Treasury Secretary Janet Yellen. “My read is the outflows from smaller and medium-sized banks are diminishing and matters are stabilizing, but it’s a situation we’re watching very closely,” Yellen said. She was speaking days after a Federal Reserve report showed deposits at small banks increased in the latest weekly data.
Dallas Fed reports weakest demand for loans since Covid crisis... The Federal Reserve Bank of Dallas reported demand for bank loans in its district slumped to the weakest since the spring 2020 Covid pandemic, a potential harbinger of a broader tightening of credit in the wake of interest-rate hikes and turmoil in the banking sector.
Euro zone producer inflation slows to 1 1/2 year low... The euro zone producer price index dropped 0.5% from the previous month in February and eased to 13.2% above year-ago. That marked the fifth consecutive month of declining factory gate prices and the lowest reading since July 2021. Without volatile energy, producer prices were 0.2% higher month-on-month and up 10.2% annually.
Judge dismisses Kentucky’s challenge to Biden’s WOTUS rule... A federal judge tossed out Kentucky’s challenge to EPA’s new waters of the U.S. (WOTUS) rule. The lawsuit is one of at least five challenging the 2023 WOTUS rule. A ruling from the Supreme Court in Sackett v. EPA is also expected later this year.
ERP Phase 2 payments continue to edge up... Payments under USDA’s Emergency Relief Program (ERP) Phase 1 were little changed for the week ended April 2, with ERP Phase 2 payouts at $47,302 to 24 recipients, up from $17,302 the prior week. Payments under the Coronavirus Food Assistance Program (CFAP) efforts were also little changed from the prior week.
Cattle futures pause... Last week’s average cash cattle price of $168.74 jumped $4.33 from the previous week and was the highest since January 2015. While cash sources expect cash cattle to trade higher again this week, futures faced corrective selling on Monday as traders don’t anticipate active trade until later in the week.
Traders maintain pessimistic attitude toward hogs... The CME lean hog index is down another 27 cents to $75.19 (as of March 31), marking the 11th straight daily decline. April lean hog futures ended Monday 66.5 cents below today’s cash quote, signaling traders have more cash weakness built into the lead contract. The cash and product markets likely need to post secondary seasonal lows before buyer interest returns to lean hog futures.
Overnight demand news... Japan is seeking 78,732 MT of milling wheat in its weekly tender.
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. Hatchery Production - Ann. — NASS