Good morning!
Quiet trade overnight... Corn futures are under light pressure this morning, while soybeans and wheat are modestly higher near the end of a quiet, two-sided overnight session. As of 6:30 a.m. CT, corn futures are trading steady to a penny lower, soybeans are 4 to 8 cents higher, winter wheat is mostly 1 to 2 cents higher and spring wheat is 3 to 7 cents higher. Front-month U.S. crude oil futures are around $2 higher and the U.S. dollar index is trading near unchanged this morning.
Russia/Ukraine update... The United Nations General Assembly will vote today on a U.S. push to suspend Russia from the U.N. Human Rights Council over reports of “gross and systematic violations and abuses of human rights” by its troops in Ukraine. U.S. Treasury Secretary Janet Yellen said on Wednesday Russia should be expelled from the Group of 20 major economies forum, and the United States will boycott “a number of G20 meetings” if Russian officials attend. The U.S. targeted Russian banks and elites with a new round of sanctions on Wednesday. The new sanctions hit Russia’s Sberbank, which holds one-third of the country’s total banking assets, and Alfabank, Russia’s fourth largest financial institution. But energy transactions were exempted from the latest measures, U.S. officials said. The U.S. is also sanctioning Russian President Vladimir Putin’s two adult daughters, Russian Foreign Minister Sergei Lavrov’s wife and daughter, and senior members of Russia’s security council, the officials said. The European Union will put more sanctions against Russia on top of the latest package announced on Tuesday, likely including measures against imports of Russian oil, the head of the European Commission Ursula von der Leyen said.
EPA to decide on dozens of refinery biofuel waivers... Facing a court deadline, EPA today is set to decide the fate of roughly three dozen refineries’ exemptions from 2018 biofuel-blending requirements. The agency is expected to reject as many as 36 refinery requests for waivers from those 2018 quotas, including 31 that were previously granted, according to reports. Refining advocates have been warning the Biden administration that if previously granted exemptions are reversed and refineries are required to cover those 2018 obligations, it could roil a market for biofuel compliance credits known as renewable identification numbers, or RINs. They cautioned that a reversal could lead to greater demand for RINs and potentially higher gasoline costs, undermining the Biden administration’s efforts to lower prices at the pump. Biofuel supporters argue the 2018 exemptions from blending mandates, covering RINs representing some 1.43 billion gallons, were improperly granted and should be reversed. EPA has proposed denying dozens of pending refinery petitions for exemptions from other years.
EPA mulling options on E15... EPA is weighing its options for allowing a fuel blend that is 15% ethanol (E15) to be more widely available in a bid to help consumers grappling with high gasoline prices, agency head Michael Regan told the Senate Environment and Public Works Committee on Wednesday. E15 currently can’t be sold in conventional markets between June 1 and Sept. 15. Regan said E15 can provide a less expensive option for consumers. “We are currently evaluating what flexibilities we have around E15,” Regan said. “This is a conversation that I and (USDA) Secretary (Tom) Vilsack have been having quite a bit as of late, so I can tell you that we are evaluating what Clean Air Act authorities we have. Whether it’s E15 or RVOs, we need to have a comprehensive approach to alleviating our dependence on oil,” Regan said, referencing the annual Renewable Volume Obligation (RVO) setting the amount of ethanol to be blended with gasoline. Regan also said he believes the agency is “finally on a path to stabilize the (RFS) program” as it develops RVOs for fiscal year 2023 and beyond.
Weekly Export Sales Report out this morning… For the week ended March 31, traders expect:
| 2021-22 expectations (in MT) | 2021-22 last week | 2022-23 expectations (in MT) | 2022-23 last week |
Corn | 475,000-1,000,000 | 636,852 | 100,000-400,000 | 286,800 |
Wheat | 50,000-500,000 | 94,987 | 50,000-250,000 | 81,300 |
Soybeans | 500,000-1,150,000 | 1,305,827 | 100,000-400,000 | 54,000 |
Soymeal | 100,000-300,000 | 102,968 | 0-60,000 | 60,544 |
Soyoil | 5,000-30,000 | 30,932 | 0-15,000 | (40) |
Covid aid bill stalled... The $10 billion in emergency pandemic response money is stalled in the Senate because of objections by Republicans and a few Democrats to the Biden administration’s impending opening of the U.S./Mexico border to asylum-seekers. Sen. John Thune (R-S.D.), the chamber’s second-ranking Republican, said the Covid bill will be stalled at least until the Senate returns to Washington at the end of April as its two-week recess starts Friday.
Canada offers farmers more up-front cash support to offset costs... Canada’s federal government is increasing up-front cash support in a farming payments program as fuel and fertilizer shortages plague the 2022 planting season. The government will temporarily waive the requirement for pre-production advances to be issued in two installments, Agriculture and Agri-Food Canada said Wednesday. The change to the Advance Payments Program allows producers to get 100% of their 2022 advance immediately when they apply. Advances were previously issued in two installments, with 60% up-front and 40% after seeding was confirmed. The program offers farmers cash advances of up to C$1 million ($800,000) depending on the expected value of their agricultural product when they apply, of which the first C$100,000 in each crop year is interest-free.
SCOTUS reinstates Trump WOTUS rule... The U.S. Supreme Court on Wednesday temporarily reinstated a Clean Water Act rule issued by former President Donald Trump’s administration that prevented states from vetoing projects that would pollute streams and wetlands. The stay on the lower court’s ruling tossing out the Trump-era water rule will expire if the high court decides not to take the case. Meanwhile, Regan said EPA would be gathering input on the definition of waters of the U.S. (WOTUS) in the Clean Water Act from a series of regional roundtables. The agency has proposed returning to pre-2015 regulations as it works to craft a new, more permanent rule. In February, EPA announced there would be 10 regional roundtables this spring and summer, but it has yet to set the dates and locations. Regan said the agency, which is working on WOTUS with the Army Corps of Engineers, is “still on a path to produce some certainty while we see what plays out in the Supreme Court.”
Oil execs deny gouging consumers... Top oil company executives rejected claims by Democrats that they are taking advantage of a global crisis to gouge consumers. Over a six-hour hearing, Democrats on a House oversight panel castigated executives from Exxon Mobil, Chevron and other oil giants for raking in historically high profits while slowing their investment in U.S. production. The company leaders countered that prices were driven by Russia’s invasion of Ukraine, restrictive U.S. energy policies and supply-chain shortages slowing down the industry.
USDA extends suspension of past-due debt collections, foreclosures on FSFL loans... USDA has temporarily extended its past-due debt collections and foreclosures on Farm Storage Facility Loans (FSFL), saying the action is in place until further notice. FSA in October 2021 suspended those activities on FSFLs and that continues with this week’s notice.
USDA grants $203,752 to UNL for meatpacking industry study... A professor at the University of Nebraska-Lincoln (UNL) received funding from USDA to study various factors that have affected the meat supply chain since the Covid-19 pandemic began. Azzeddine Azzam at UNL received the USDA funding via the National Institute of Food and Agriculture to study industry conduct during the Covid-19 plant shutdowns and evaluate the economic developments from expanding local meat processing through the start of small packing operations. “When we add more regional or local capacity to the industry, either through opening new plants or expanding the capacity of existing plants, that is going to restructure the industry,” Azzam said. “The questions that I will address are: Will the restructuring make the industry more resilient to capacity disruptions in the event of another pandemic? What are the short-term and long-term consequences for the cattle feeding industry?”
Beef movement improves as prices ease... Wholesale beef prices halted their recent ascent Wednesday, as Choice values dropped 49 cents and Select was $1.85 lower. Retailers used the lower prices to increase purchases. Movement totaled 141 loads, including 100 loads of Choice beef.
Cash hog index drops again... The CME lean hog index dropped another 58 cents today to $101.08. The index is down $2.58 over the past five days but is still $2.33 above where April hogs finished on Wednesday. Including today, there are seven trading sessions until the April futures contract stops trading and 10 sessions until it is settled against the cash index.
Overnight demand news... Japan purchased 137,516 MT of milling wheat, including 59,999 MT from the U.S., 49,107 from Canada and 28,410 MT from Australia. The Philippines bought 55,000 MT of feed wheat – likely from India. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
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
- 7:30 a.m. Weekly Export Sales — FAS