Good morning!
Soybeans firmer, corn choppy and wheat varied overnight... Soybeans firmed amid corrective buying overnight, while corn pivoted around unchanged. Winter wheat markets weakened, while spring wheat futures posted mild gains. As of 6:30 a.m. CT, corn futures are trading steady to a penny higher, soybeans are mostly 9 to 10 cents higher, SRW wheat is 3 to 5 cents lower, HRW wheat is a penny to 4 cents lower and HRS wheat is 1 to 3 cents higher. The U.S. dollar index and front-month crude oil futures are both modestly firmer.
Yellen urged to release 45Z tax credit guidance by Sept. 1 amid industry uncertainty... The Clean Fuels Alliance America has called on Treasury Secretary Janet Yellen to issue guidance on the 45Z clean fuel tax credit, including safe harbor provisions, by Sept. 1. The biodiesel, renewable diesel and sustainable aviation fuel industries are experiencing difficulties securing contracts and capital due to the lack of clarity on the credit, which is set to take effect on Jan. 1. The group emphasizes the urgent need for policy certainty to stabilize the market and meet project deadlines. The delay in issuing this guidance has prompted calls from industry groups and lawmakers for expedited action. They argue that without clear rules, the ability to secure contracts and make necessary investments is hindered, potentially disrupting project timelines and threatening the market for low-carbon fuels. The Treasury Department has not yet responded to these requests for accelerated guidance issuance.
Weekly Export Sales Report out this morning... For the week ended Aug. 22, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | (100,000)-200,000 | 119,123 | 700,000-1,400,000 | 1,291,175 |
Wheat | NA | NA | 300,000-650,000 | 492,663 |
Soybeans | (150,000)-150,000 | (43,745) | 1,500,000-2,500,000 | 1,676,879 |
Soymeal | (100,000)-100,000 | (20,103) | 100,000-500,000 | 136,392 |
Soyoil | 0-10,000 | 10,481 | 0-20,000 | 130 |
Argus expects 60% plunge in non-EU French wheat exports... French soft wheat exports outside the European Union are expected to fall to 4.1 MMT in 2024-25, down 60% from last year, Argus Media forecast. The firm forecasts exports within the bloc, however, would be only slightly lower than last season’s 6.3 MMT, Argus kept its estimate of this year’s French soft wheat production at 25.17 MMT. That would be down 27% from the five-year average and the smallest crop since the 1980s.
Ukraine grain exports far outpacing year-ago in early 2024-25... Ukraine’s grain exports through the first two months of 2024-25 totaled 6.75 MMT, up 2.15 MMT (62.3%) from the same period last year, according to ag ministry data. Shipments included 3.4 MMT of wheat, 2.2 MMT of corn and 1.1 MMT of barley.
Prolonged monsoon could threaten India’s crops... India’s monsoon rains are likely to be prolonged into late September this year due to the development of a low-pressure system in the middle of the month, two weather department officials told Reuters. “There is an increased probability of a low-pressure system developing in the third week of September, which could delay the withdrawal of the monsoon,” said a senior official of the India Meteorological Department. Above-normal rainfall due to the delayed withdrawal of the monsoon could damage India’s crops like rice, cotton, soybean, corn, and pulses, which are typically harvested from mid-September.
Carbon registry Verra rejects China rice projects... Verra, the U.S.-based registry that sets standards for the voluntary carbon market, has rejected as many as 37 low-emission Chinese rice cultivation projects following a quality control review. The integrity of the Chinese rice projects, which make use of alternative irrigation methods to cut methane emissions caused by the decomposition of plants in rice fields, was first called into question last year. Verra has already “permanently inactivated” the methodology by which the credits generated by the projects are calculated. In what it described as an “unprecedented action,” Verra ordered project backers to pay compensation for the excess credits they issued after identifying serious failures in the way they were calculated. Shell Oil was one of the companies using offsets generated by Chinese rice projects to help meet its climate goals. The company told Reuters earlier this year it remained committed to ensuring its credit portfolio had a “verifiable carbon benefit.”
UBS cuts China’s GDP growth forecast... UBS Group AG now expects China’s gross domestic product to expand 4.6% this year, compared with an earlier forecast of 4.9%. For 2025, UBS sees growth at 4%, down from 4.6% previously. The downgrade reflects an emerging consensus among the world’s biggest banks that Beijing might not meet its growth aim of around 5% in 2024. UBS cited ongoing woes with the real estate/property sector as the primary reason for the downgrade, noting it is weighing heavily on domestic demand and confidence.
U.S./China commercial, trade working group to hold second vice-ministerial meeting... The second vice-ministerial meeting of the U.S./China commercial and trade working group will be held on Sept. 7 in north China’s Tianjin municipality, the Chinese ministry of commerce announced. China International Trade Representative and Vice Minister of Commerce Wang Shouwen will co-chair the meeting with U.S. Under Secretary of Commerce for International Trade Marisa Lago. The two sides will engage in in-depth discussions on a wide range of topics, including their respective concerns about economic and trade policies, corporate demands and pragmatic cooperation. The first vice-ministerial meeting of the working group was held in April. As we noted in “Evening Report” on Wednesday, President Joe Biden and Chinese President Xi Jinping are expected to speak by phone in the coming weeks following meetings this week between top U.S. and Chinese officials in Beijing.
Reuters: U.S. gov’t funding yielded hundreds of patents for China-based researchers... The U.S. Defense Department, NASA and other government agencies funded research that led to more than 1,000 U.S. patents for China-based inventors since 2010, including in sensitive fields such as biotechnology and semiconductors, data from the U.S. patent agency that was viewed by Reuters showed. The agency granted 1,020 patents from 2010 through the first quarter of 2024 that were both funded at least in part by the U.S. government and involved at least one China-residing inventor. The data does not detail whether U.S. entities or individuals share the patents. The patents included 197 in pharmaceuticals and 154 in biotechnology.
Euro zone economic sentiment improves, consumer confidence slumps... The economic sentiment indicator in the euro zone rose to 96.6 in August, the highest level in more than a year. Pessimism eased for the industrial sector and confidence improved for services. However, the consumer confidence indicator fell to -13.5 in August. Consumers’ weakened assessments of their households’ past and expected financial situation, as well as their intentions to make major purchases, were balanced by a pick up in their expectations about the general economic situation in their respective country.
USDA to conduct field trials for vaccines aimed at preventing H5N1 from infecting dairy cows... While four vaccines are licensed for avian influenza, none are approved for the current strain. USDA’s trials, which began in April, are still in progress, with the agency considering next steps, including vaccine production if successful. Concerns include the rapid mutation of the virus, potential vaccine efficacy, and the risk of losing export markets due to difficulty distinguishing vaccinated from infected birds. USDA stresses biosecurity as the primary defense against the outbreak. USDA’s Center for Veterinary Biologics is now accepting submissions for field studies that could lead to conditional or full licensure of nonviable, non-replicating vaccines. This marks a shift from previous requirements that all studies, even those not involving virus challenges, be conducted in containment facilities. Besides traditional vaccine development, there is also interest in mRNA vaccines, similar to those used for Covid-19, which are being tested for their efficacy in both animals and humans.
Wholesale beef prices weaken... Choice boxed beef prices fell $4.68 to $307.29 on Wednesday, the lowest level since mid-May. Select dropped $2.62 to $297.63. That tightened the Choice/Select spread to $9.66, well below year-ago and the average for this time of year.
Seasonal pressure persists in cash hog fundamentals... The CME lean hog index is down another 37 cents to $87.45 as of Aug. 28. The index is down $6.19 from its seasonal peak on Aug. 1. The pork cutout fell 77 cents to $95.28, though that’s 73 cents above last week’s low and $1.65 higher than the July low.
Overnight demand news... Exporters reported no tenders or sales.
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
· 11:00 a.m. Census of Agriculture: American Indian Reservation — NASS
· 2:00 p.m. Agricultural Exchange Rate Data Set — ERS
· 2:00 p.m. Fluid beverage milk sales by product (Annual) — ERS
· 2:00 p.m. Number and average size of U.S. fluid milk product plants — ERS
· 2:00 p.m. Selected soft dairy products, domestic use (Annual) — ERS
· 2:00 p.m. Vegetable and Pulses Yearbook — ERS
· 2:00 p.m. Citrus Fruits — NASS