Good morning!
Followthrough selling overnight... Wheat futures led losses as grain and soy futures extended this week’s declines overnight. As of 6:30 a.m. CT, corn futures are trading 2 to 4 cents lower, soybeans are 8 to 12 cents lower and wheat futures are 12 to 18 cents lower. Front-month crude oil futures are holding near unchanged, while the U.S. dollar index is more than 100 points higher.
Turkish gov’t discussing grain, fertilizer export issues with UN... Turkish Foreign Minister Mevlut Cavusoglu said Ankara is working with the United Nations to solve issues regarding grain and fertilizer exports via the Black Sea. He will discuss developments in the Ukraine war with his Russian counterpart Sergei Lavrov during his visit to Turkey this week. Cavusoglu also said he was concerned about preparations for further attacks.
Polish ag minister quits over Ukraine grain movement into his country... Polish Agriculture Minister Henryk Kowalczyk resigned from his post on Wednesday amid rising anger among farmers over the impact of Ukrainian grain imports on domestic prices. Kowalczyk said he decided to quit the position due to the European Commission’s decision to extend duty free imports for Ukrainian grain until June 2024. Polish farmers wanted the introduction of tariffs on Ukrainian grain.
Ukraine grain exports remain well behind year-ago... So far in 2022-23, Ukraine exported 38.5 MMT of grain, down 6.6 MMT (14.6%) from the same period last year. The total included 22.7 MMT of corn, 13.2 MMT of wheat and 2.3 MMT of barley.
Macron meeting with Xi in China... French President Emmanuel Macron will be joined by European Commission President Ursula von der Leyen during a three-day visit to China starting today. Xi is courting the French leader as he tries to create some distance between Europe and the U.S. in their approaches toward Beijing. After formal meetings in Beijing, Macron and Xi will head to the southern city of Guangzhou. The excursion to meet a world leader at a second location outside the capital is rare for Xi, who normally reserves such honors for close friends like Russian President Vladimir Putin.
China’s yuan surpasses U.S. dollar as the most-traded currency in Russia... Bloomberg data shows the yuan topped the greenback in each of the past two months. The trend comes as Moscow and Beijing continue to deepen political and economic ties as the war in Ukraine has lasted more than a year. However, the yuan accounted for only about 2.7% of global foreign-exchange reserves at the end of 2022, International Monetary Fund data showed, while the dollar accounted for roughly 58%.
Fed’s Mester says rate target will need to top 5%... Federal Reserve Bank of Cleveland President Loretta Mester said policymakers should move the benchmark rate above 5% this year and hold it at restrictive levels for some time to quell inflation, with the exact level depending on how quickly price pressures ease. To put inflation on a steady path down to 2%, monetary policy needs to move “somewhat further into restrictive territory this year, with the fed funds rate moving above 5% and the real fed funds rate staying in positive territory for some time,” Mester said at an event Tuesday in New York with the Money Marketeers of New York University.
Yellen: IRS plan for $80 billion coming this week... The IRS’s plan for spending its roughly $80 billion in multiyear funds will be released this week, according to Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel. The IRS will outline its priorities for the Inflation Reduction Act funds “in greater detail later this week — with the release of the Strategic Operating Plan,” Yellen said Tuesday during a ceremonial swearing-in ceremony for Werfel at IRS headquarters.
German factory orders jump the most since mid-2021... Factory orders in Germany unexpectedly jumped 4.8% in February, the most since June 2021, following a downwardly revised 0.5% rise in January and way above forecasts of a 0.3% gain. It was the third consecutive month of gains led by large-scale orders for vehicles.
Exxon: Decarbonization business could outgrow oil... Exxon Mobil’s Low Carbon business has the potential to generate hundreds of billions of dollars in revenue and outperform the company’s traditional oil and gas within a decade, CEO Darren Woods said. The result will be Exxon being less prone to commodity price swings through predictable, long-term contracts with customers striving to reduce their own carbon footprint.
Brazil condemns Europe’s attempts to add environmental commitments to export deal... The EU said last month that the four Mercosur countries — Brazil, Argentina, Uruguay and Paraguay — must commit to binding measures on deforestation reduction before a long-pending export deal can be ratified. The request came in the form of a side letter from the European Commission, the bloc’s executive arm, sent to Mercosur members in early March.
Wholesale beef prices surging... Choice boxed beef prices firmed $2.85 on Tuesday, the third straight daily increase totaling $8.74 during that span. Select beef also firmed $3.77 yesterday and is up $9.49 over the past three days. While movement hasn’t been overly strong, packers have padded their margins in preparation for paying higher cash prices this spring as market-ready supplies tighten.
Cash hog fundamentals continue to weaken... The CME lean hog index is down another 52 cents, marking the 12th straight daily decline. The pork cutout value fell $1.47 on Tuesday, dropping to the lowest level since December 2020. Falling cash fundamentals are allowing traders to maintain their pessimistic attitudes toward lean hog futures.
Overnight demand news... Japan is seeking 60,000 MT of feed wheat and 20,000 MT of feed barley.
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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS