Good morning!
Corrective buying in grains overnight... Corn, soybeans and wheat posted corrective gains during the overnight session. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents higher, soybeans are 4 to 9 cents higher, winter wheat markets are 7 to 10 cents higher and spring wheat is a nickel higher. The U.S. dollar index is nearly 200 points lower and front-month crude oil futures are modestly firmer.
Weekly Export Sales Report out this morning... For the week ended July 4, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 300,000-850,000 | 357,152 | 0-500,000 | 311,538 |
Wheat | NA | NA | 300,000-700,000 | 805,318 |
Soybeans | 200,000-600,000 | 228,379 | 50,000-300,000 | 150,310 |
Soymeal | 150,000-400,000 | 212,946 | 50,000-200,000 | 288,572 |
Soyoil | 4,000-15,000 | 16,473 | 0-5,000 | (4,778) |
Strategie Grains raises EU wheat production forecast... Strategie Grains increased its forecast for EU soft wheat production by 500,000 MT to 122.3 MMT, though that would still be down 4.2 MMT (3.3%) from last year and the lowest in four years. The firm said the latest harvest feedback and area estimates from France, the EU’s largest wheat producer, suggest soft wheat production could fall below 29 MMT. That would be below the initial forecast of 29.7 MMT earlier this week from France’s ag ministry. Strategie Grains raised EU barley and corn production forecasts to 51.3 MMT and 62.0 MMT, respectively.
Ukraine seizes cargo of ‘looted’ grain... Ukraine seized a foreign cargo ship in the Black Sea off its Odesa region and detained the captain on suspicion of helping Moscow export Ukrainian grain from Russian-occupied Crimea, the Security Service of Ukraine (SBU) said. The vessel, which it did not identify, was travelling under the flag of a central African country and repeatedly docked at the Crimean sea port of Sevastopol to pick up “looted” agricultural products in 2023-24, SBU said. SBU said the captain and 12 crew members helped Russia export Ukrainian grain taken from the occupied south to the Middle East for sale on behalf of Russia.
NATO calls out China for supporting Russia... NATO issued a declaration on Wednesday night calling out China’s military support for Russia in Ukraine. The declaration described China as a “decisive enabler” of Russia’s war against Ukraine. China on Thursday criticized the claim, saying it “comes with malicious intent.” China’s foreign ministry urged NATO to “take concrete action to de-escalate rather than shift blame” in the situation.
IEA sees oil demand growth slowing on reduced Chinese consumption... Global oil demand growth will slow to just under a million barrels per day (bpd) this year and next, the International Energy Agency (IEA) said, as Chinese consumption contracted in the second quarter amid economic woes. Global demand in the second quarter rose by 710,000 bpd annually in its lowest quarterly increase in over a year, IEA noted. IEA’s forecast for relatively low oil demand growth of 970,000 bpd this year was largely unchanged from its outlook last month. It sees an increase of 980,000 next year. By contrast, OPEC expects oil demand to rise by 2.25 million bpd this year, more than double IEA’s forecast, with China providing a significant chunk of the growth. For 2025, OPEC projects global oil demand growth of 1.85 million bpd.
China announces more regs to stabilize stock market... The China Securities Regulatory Commission (CSRC) announced more regulations to stabilize its flagging stock market. CSRC said securities re-lending, in which brokers borrow shares for clients to short sell, would be suspended. In addition, margin requirements would be raised for short-sellers. CSRC also urged stock exchanges to publish detailed rules to regulate program trading, especially high-frequency trading. China has taken a series of measures to discourage short-selling since last August, and the latest moves are “in response to investor concerns, and aimed at stabilizing the market,” CSRC said.
Atlanta Fed’s GDPNow estimate for Q2 growth jumped to 2.0% from 1.5%... This rise marks a positive shift after a series of declines, driven by stronger personal consumption and private domestic investment growth. This increase to 2.0% breaks a pattern of declining estimates seen in recent updates. For instance, on June 3, the estimate had decreased to 1.8% from 2.7% on May 3. GDPNow is a model-based projection and not an official forecast. It doesn’t capture subjective adjustments or anticipate impacts beyond the standard internal dynamics of the model.
UK economic growth builds in May... The British economy expanded 1.4% annually in May, the most since June 2023, following an upwardly revised 0.7% rise in April. The three-month average was 0.9% growth, the largest increase since the period ending January 2022.
Wholesale beef weakens... Wholesale beef prices declined for a second straight day on Wednesday, as Choice fell $1.61 to $324.05 and Select dropped 37 cents to $303.94. However, the price drop the past two days has triggered a combined load count of 286, signaling there’s still strong retailer demand under the market. Seasonally, beef prices weaken during summer, though there are indications retailers plan to keep actively featuring beef.
Cash hog index firms, futures’ discounts build... The CME lean hog index is up 24 cents to $88.67 as of July 9. July lean hog futures, which expire July 15 and are settled against the index July 17, finished Wednesday 22 cents below the index. August hogs extended their discount to the cash index to $3.995.
Overnight demand news... Japan purchased 107,330 MT of milling wheat, including 50,440 MT U.S., 27,540 MT Canadian and 29,350 MT Australian. South Korea tendered to buy up to 140,000 MT of corn to be sourced from South America or South Africa and up to 70,000 MT of optional origin feed wheat, but passed on another tender to buy up to 68,000 MT of corn.
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. Meat Price Spreads — ERS
· 2:00 p.m. Vegetable and Pulses Outlook: July 2024 — ERS