Good morning!
Grains firmer overnight... Corn, soybeans and wheat posted followthrough buying during the overnight session, while HRW and HRS wheat rebounded from recent losses. As of 6:30 a.m. CT, corn futures are trading a penny higher, soybeans are mostly a nickel higher and wheat futures are 6 to 8 cents higher. The U.S. dollar index is holding near unchanged, while front-month crude oil futures are about 75 cents higher.
Weekly Export Sales Report out this morning... For the week ended Aug. 8, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 300,000-550,000 | 485,447 | 150,000-800,000 | 249,062 |
Wheat | NA | NA | 200,000-500,000 | 273,980 |
Soybeans | 100,000-500,000 | 325,423 | 400,000-1,000,000 | 985,206 |
Soymeal | 50,000-250,000 | 102,343 | 100,000-400,000 | 256,532 |
Soyoil | 0-15,000 | 10,884 | (3,000)-10,000 | (8,233) |
Russia attacks Ukrainian grain facility in Odesa... Russian forces attacked port infrastructure in Ukraine’s southern city of Odesa on Wednesday evening, striking a Louis Dreyfus Company grain facility. The company said a missile hit the truck discharge bay at its Brooklyn Kyiv facility, but no employees were harmed and products stored in silos were undamaged. Repair work is not expected to “materially disrupt terminal operations” as there are alternative logistics options at the site.
Record July NOPA crush figure expected... Analysts polled by Reuters expect the National Oilseed Processors Association (NOPA) to report its members crushed 182.4 million bu. of soybeans during July, which would be the most ever for the month. The crush pace is expected to rise 3.9% from June and 5.2% from year-ago. Soyoil stocks as of July 31 were estimated at 1.608 billion pounds.
Exchange raises Argentine corn crop estimate... The Rosario Grain Exchange raised its estimate for this year’s Argentine corn crop by 1.5 MMT to 49 MMT. The exchange expects corn production to be steady for the 2024-25 growing season.
China asks rural commercial banks to rein in public fund investment... Local financial authorities in eastern China have asked some rural commercial banks to rein in the scale of investments in public funds, three sources with knowledge of the matter told Reuters. The rural banks are required to count public fund investment under their investments via special purpose vehicles, which together should not exceed 2.5% of their total assets, the sources said.
Stimulus fails to stabilize China’s property sector... China’s new home prices in 70 cities shrank by 4.9% from year-ago in July. That was the 13th straight month of decrease and the sharpest drop since June 2015, despite continued attempts from Beijing to ease the impact of a prolonged property weakness. Among 70 cities surveyed, only two – Shanghai and Xian – reported a rise in new home prices in monthly terms, and only Shanghai registered a price rise in the resale home market.
China’s industrial production slows, real sales strengthen, fixed asset investment slows... China’s industrial production increased 5.1% annually in July, easing from 5.3% growth in the prior month. The latest reading marked the third straight month of moderation in industrial output, with growth hitting its lowest since March. China’s retail sales increased 2.7% from year-ago in July, accelerating from June’s 17-month low of 2.0%. This marked the 18th consecutive month of expansion in retail sales. China’s fixed asset investment slowed to an annualized 3.6% rated during the first seven months of the year, down from 3.9% in the prior period. Cumulatively, the data signaled China’s economy continues to struggle, sparking renewed calls for more stimulus.
Japan’s economy strengthens in Q2... The Japanese economy grew by 3.1% on an annualized basis in the second quarter, a major upswing from 2.3% contraction the previous quarter. That was the strongest annual growth in GDP since the second quarter of last year. On a quarterly basis, Japan’s economy grew 0.8%, the strongest quarterly growth since the first quarter of last year.
UK economy expands in Q2... Britain’s economy grew 0.6% in the second quarter, building on a 0.7% recovery during the first three months of the year. In annual terms, UK GDP expanded 0.9%, the biggest annual growth rate since the third quarter of 2022.
Mixed cash cattle opinions... Cash cattle trade has been light so far this week, with not enough volume to set a clear price trend. Wednesday’s strong performance by cattle futures gives feedlots some hope packers may bid up for cash cattle this week, though most cash sources feel prices will be steady/weaker when trade turns active.
Slightly bigger-than-normal discount in October hogs... October lean hog futures rallied more than $3.00 on Wednesday, which narrowed the discount the new lead-month contract holds to the CME lean hog index to $14.255. That’s slightly greater than the five-year average decline of $12.62 from now until the contract settles against the index in mid-October.
Overnight demand news... Algeria purchased an unspecified amount of durum wheat, with unconfirmed reports including 200,000 to 275,000 MT from Canada and 100,000 to 200,000 MT from other origins. The Philippines purchased 50,000 MT of feed wheat expected to be sourced from Australia. Egypt reportedly made no purchases yet in informal talks to buy large quantities of wheat after getting limited participation in its recent tender to buy up to 3.8 MMT of 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
· 7:30 a.m. Extended Weather Forecast — NWS
· 11:00 a.m. Monthly Soybean Crush — NOPA
· 11:00 a.m. Feed Grains: Yearbook Tables — ERS