Good morning!
Beans firmer, corn and wheat weaker this morning... Soybeans are firmer this morning, while corn and wheat are weaker following two-sided trade overnight. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are fractionally to 2 cents higher and wheat futures are mostly 6 to 9 cents lower. Front-month crude oil futures are near unchanged and the U.S. dollar index is around 100 points lower this morning.
Crop stress builds in Argentina... Hot and dry conditions during the weekend led to strong drying across Argentina, raising crop stress in most areas. World Weather Inc. says Argentina won’t receive much relief this week, with limited rainfall expected. Central Brazil had improved conditions for soybean harvest and safrinha corn planting, though rains are expected to return.
Brazil soybean harvest, safrinha corn planting increase but still lag... Brazil’s soybean harvest increased to 17% done as of last Thursday, according to AgRural, though that was still seven percentage points behind last year. Safrinha corn planting more than doubled to 25% complete, though that lagged last year’s 42% for the date.
NCC: Cotton acreage to fall sharply... U.S. cotton producers intend to plant 11.4 million cotton acres this spring, down 17% from 2022, according to the National Cotton Council’s (NCC’s) annual survey. Using five-year average abandonment rates along with a few state-level adjustments to account for current dry conditions, cotton harvested area would total 8.8 million acres – a 22.6% abandonment rate. Using the five-year average state-level yield would generate a cotton crop of 15.7 million bales.
The week ahead in Washington... The House is on a two-week recess, while the Senate is in session this week. The new farm bill timeline will get important information Wednesday when the Congressional Budget Office (CBO) unveils its 10-year budget cost estimate for existing farm bill programs, including the Supplemental Nutrition Assistance (food stamp) Program, which accounts for over 80% of farm bill spending. The House Agriculture Committee will hold a farm bill listening session on Tueday at the World Ag Expo in Tulare, California. The Senate Agriculture Committee holds a hearing Thursday on SNAP and other nutrition assistance programs. USDA Secretary Tom Vilsack travels to Louisiana on Monday and Tuesday. He will participate in events highlighting how the Biden administration has addressed the climate crisis, addressing land management and water supply challenges in the West, and improving producers and forest landowners’ resilience, and building an economy from the bottom up and middle out and creating new jobs and opportunities, including for small and underserved producers and businesses. The economic focus this week will be U.S. inflation data via the consumer price index on Tuesday and the producer price index on Thursday.
U.S. increasing surveillance for flying objects... The U.S. downed three unidentified flying objects during the weekend – one over Alaska on Friday, another in northern Canada on Saturday and one over Lake Huron Sunday. U.S. officials told Reuters the U.S. North American Aerospace Defense Command (NORAD) has been adjusting the filters and algorithms it uses to examine radar data, making them sensitive enough to detect these kinds of objects – ones whose ability to stay aloft, moving with the wind, is confounding U.S. officials. Officials say a key change was to NORA’s filters to allow them to detect objects moving slowly and at different altitudes, without specifying which ones. “We have been more closely scrutinizing our airspace at these altitudes, including enhancing our radar,” said Melissa Dalton, an assistant secretary of defense. “We’re definitely looking harder now,” an unidentified U.S. military official told Reuters. China said it doesn’t have information on any of the three flying objects shot down over the weekend.
China accuses U.S. of flying high-altitude balloons over its airspace... China accused the U.S. of “illegally” flying high-altitude balloons into its airspace more than 10 times since January 2022. The accusation comes less than a day after China said it was preparing to shoot down an unidentified object flying near its eastern coast. China also accused the U.S. of frequently sending warships and planes to carry out close-range reconnaissance against China. Beijing also lashed out at the move by the U.S. Commerce Department on Friday to blacklist six Chinese makers of balloon and airship equipment, which the agency alleged is connected to intelligence gathering by the People’s Liberation Army.
Euro zone economic growth forecast increased, inflation decreased... Euro zone economic growth is likely to be stronger than previously expected this year while inflation will be lower than in forecasts towards the end of 2022, the European Commission said. Euro zone economic growth is likely to be 0.9% this year rather than the 0.3% predicted last November. The commission said uncertainty surrounding the forecast was high, but risks to growth were broadly balanced. Euro zone consumer inflation is expected to decelerate to 5.6% this year and 2.5% in 2024, down from previous expectations of 6.1% and 2.6%, respectively.
Russia raises wheat export tax... Russia’s wheat export tax for Feb. 15-21 will be 4,653.5 rubles ($63.17) per metric ton based on an indicative price of $306.20. That’s up from a rate of 4,496.6 rubles per metric ton the previous week.
China sells all wheat at auction... China sold all 139,150 MT of state-owned wheat reserves put up for auction. The average sales price was 2,888 yuan ($423) per metric ton, up slightly from 2,830 yuan for the previous week’s auction.
World bird flu toll accelerating at faster pace than last year... About 100 million poultry died or were culled due to avian influenza between the start of October and Feb. 3, according to the World Organization for Animal Health. That’s more than triple the number in the same period a year earlier, which resulted in record losses from the disease. Poultry farms across Europe and North America have suffered severe outbreaks, and cases are escalating in South America — including Bolivia, which borders major chicken producer Brazil. “The more the virus circulates in animals, the higher is the risk for humans,” the World Health Organization’s Sylvie Briand said.
Hong Kong reports ASF case... Hong Kong reported an outbreak of African swine fever (ASF) on a farm near the border with mainland China, the World Organization for Animal Health (WOAH) said. Five pig farms within three kilometers of the farm were inspected and no abnormalities were found. Movement of pigs on these farms was also suspended and samples from pigs will be tested, WOAH said.
Bullish cash cattle hopes... Cash cattle reportedly traded $1 to $2 higher in the Southern Plains and up to $4 higher in the northern market late last week. Traders will get the official average cash price for last week’s trade later this morning. Packers are thought to need more near-term supplies, which gives traders hopes of stronger cash prices again this week.
Cash hog index continues to rise... The string of gains in the cash hog market continues, with the CME lean hog index up another 21 cents to $74.01 (as of Feb. 9). February lean hog futures, which exit the board on Tuesday, finished Friday $1.865 above today’s cash quote, while the April contract held a $9.315 premium.
Weekend demand news... The Philippines purchased 110,000 MT of feed wheat expected to be sourced from Australia.
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
- 10:00 a.m. Export Inspections — AMS