Good morning!
Followthrough buying in wheat, corn and beans extend losses overnight... Grain markets extended their moves from Tuesday during the overnight session, with wheat trading higher while corn and soybeans weakened. As of 6:30 a.m. CT, corn futures are trading 3 to 4 cents lower, soybeans are 11 to 12 cents lower and wheat futures are 1 to 3 cents higher. The U.S. dollar index is up around 200 points and front-month crude oil futures are about $1.35 higher.
Argentine soy processor strike continues... Two unions representing soybean oil factory workers in Argentina announced a strike over wages on Tuesday, halting activity at soy processing plants. After failing to reach an agreement yesterday, the unions announced plans to continue the strike today and will discuss how long to extend the work stoppage if their wage demands aren’t met.
China soybean imports less soybeans than expected in July... China imported 9.85 MMT of soybeans in July, down 1.26 MMT (11.3%) from June but up 270,000 MT (2.8%) from last year. Analysts expected soybean arrivals to reach 12 MMT to 13 MMT and challenge the all-time monthly record. Through the first seven months of the year, China imported 58.33 MMT of soybeans, down 1.3% from the same period last year. Given hefty soybean stocks, negative crush margins and weak demand from the livestock sector, China’s soybean imports are expected to slow through year-end.
China’s exports unexpectedly slow in warning sign for economy... China’s exports grew at their slowest pace in three months in July, missing expectations and adding to concerns about the outlook for the vast manufacturing sector. China’s exports increased 7.0% from year-ago to $300.56 billion last month, though that was down from an 8.6% rise the previous month and below expectations for a 9.7% rise. China’s imports increased 7.2% to $215.91 billion, surging from a 2.3% decline in June and beating expectations for a 3.5% rise. That widened China’s trade surplus to $84.65 billion. The trade surplus with the U.S. narrowed to $30.84 billion in July. For the first seven months of 2024, China recorded a trade surplus of $518 billion, with exports advancing 4.0% to $2.07 trillion while imports grew 2.8% to $1.49 trillion. The trade surplus with the U.S. through July stood at $190.64 billion.
Egypt issues record wheat tender... Egypt’s state grains buyer, the General Authority for Supply Commodities, announced a record tender for 3.8 MMT of wheat to cover imports between October 2024 and April 2025 as prices are near four-year lows. Egypt’s Finance Minister Ahmed Kouchouk said the global price drop presents an opportunity to more aggressively procure supplies. “My colleagues (at the government) are seizing this opportunity to buy what we need amid the current situation in the global market,” Kouchouk said.
EPA investigating origins of UCO supplies by renewable fuels producers... Reuters reports EPA has confirmed it is investigating the supply chains of at least two renewable fuel producers, focusing on the origins of used cooking oil (UCO) used in renewable fuel production. According to EPA spokesman Jeffrey Landis, audits have been conducted since July 2023, evaluating where UCO was collected. These investigations are ongoing, and specific details or company names have not been disclosed. The probes began after EPA updated its domestic supply chain accounting requirements in July 2023. The increased scrutiny on UCO imports, particularly from countries like China, stems from concerns that these supplies might contain virgin palm oil linked to deforestation. Lawmakers have urged the administration to investigate, as UCO imports used for biodiesel production are eligible for credits under the Renewable Fuel Standard.
Indonesia begins testing of B50 biodiesel... Indonesia’s outgoing government of President Joko Widodo has ordered the palm oil industry to prepare for B50 biodiesel and conduct “static tests,” Reuters reported, citing director general of renewable energy at the energy ministry. That will be followed by vehicle road tests, in a process that typically takes a year. Prabowo Subianto, who will take over from Widodo in October, has pledged to raise the biodiesel mandate to B50 to reduce oil imports, without setting a timeline.
Canadian railroads/union talks resume... Talks between Canada’s two major railroads and the union representing about 9,000 employees are set to resume today, just days before the country’s labor-relations board is expected to issue a ruling that could initiate a strike deadline at both companies. A simultaneous strike at Canadian National Railway and Canadian Pacific Kansas City this month poses a significant risk to North America’s supply chain network.
BOJ sends dovish signal... Bank of Japan (BOJ) Deputy Governor Shinichi Uchida sent a strong dovish signal in the wake of historic financial market volatility in Japan by pledging to refrain from hiking interest rates when the markets are unstable. “I believe that the bank needs to maintain monetary easing with the current policy interest rate for the time being, with developments in financial and capital markets at home and abroad being extremely volatile,” Uchida said. Regarding the recent market volatility, Uchida said the catalyst was worries about the U.S. economic growth outlook, and a correction in the yen resulting from the latest BOJ hike amplified those moves in Japan.
China bans poultry imports from RGDS in Brazil... China’s customs authority banned imports of poultry and related products from Brazil’s Rio Grande do Sul due to an outbreak of Newcastle disease.
Wholesale beef demand strengthens... Wholesale beef movement surged to 181 loads on Tuesday as Choice prices fell $2.13 and Select dropped 44 cents. Strong retailer demand suggests consumers haven’t balked at record prices at the meatcase yet. While there’s some stability in wholesale beef trade, the outlook for cattle futures is clouded by the recent long liquidation plunge.
Cash hog index, pork cutout drop... The CME lean hog index is down 26 cents to $93.33 as of Aug. 5, marking the second straight daily decline after the extended rally. The pork cutout dropped $1.97 on Tuesday, pressured by sharp losses in hams, bellies and butts.
Overnight demand news... Algeria tendered to buy a nominal 50,000 MT of optional origin soft milling wheat. Jordan tendered to buy up to 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
· 9:30 a.m. Weekly Ethanol Production — EIA
· 11:00 a.m. Livestock and Meat International Trade Data — ERS
· 2:00 p.m. Broiler Hatchery — NASS