Good morning!
Grains weaker overnight... Corn, soybeans and wheat pulled back from Thursday’s corrective gains during overnight trade. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are 1 to 3 cents lower, SRW wheat is 6 to 7 cents lower, HRW wheat is 9 to 12 cents lower and HRS wheat is 8 to 9 cents lower. The U.S. dollar index is around 130 points lower and front-month crude oil futures are about 70 cents higher this morning.
July crop reports out later this morning... USDA’s updated balance sheets at 11:00 a.m. CT will reflect adjustments to old-crop demand forecasts based on June 1 stocks. There will be major changes on the new-crop balance sheets to reflect planted acreage figures. The first all-wheat crop estimate will include the initial survey-based forecasts for other spring wheat and durum. Analysts expect 2023-24 ending stocks of 2.049 billion bu. for corn (2.022 billion bu. in June), 355 million bu. for soybeans (350 million bu. in June) and 702 million bu. for wheat (688 million bu. in June). For 2024-25 ending stocks, analysts expect: 2.312 billion bu. for corn (2.102 billion bu. in June), 449 million bu. for soybeans (455 million bu. in June) and 788 million bu. for wheat (758 million bu. in June). Analysts expect the all-wheat production estimate to be 1.909 billion bu. (1.875 billion bu. projected in June).
China makes no changes to balance sheets... China’s ag ministry kept its estimates unchanged for corn, soybean and cotton production and imports for 2024-25. China’s wheat production increased 2.7% this year to 138.22 MMT as planted area inched up 0.1% and yields rose 2.6%.
China’s soybean imports jump in June... China imported 11.11 MMT of soybeans during June, up 890,000 MT (8.7%) from May and 840,000 MT (8.2%) more than last year. Through the first half of 2024, China imported 48.48 MMT of soybeans, down 2.2% from the same period last year. Soybean arrivals in China are expected to be record-large between 12 MMT and 13 MMT this month.
French wheat ratings drop, harvest lags... France’s ag ministry rated the country’s wheat crop as 57% good or excellent as of July 8, down one point from the previous week and the lowest since 2020. Harvest was 4% complete, down from 26% on that date last year and the five-year average of 19%.
Biden announces $1.7 billion plan to boost EV production... This plan, managed by the Department of Energy (DOE), aims to convert 11 existing auto manufacturing plants across eight states to produce electric vehicles (EVs) and their components. The initiative is designed to revitalize facilities that have either closed or are at risk of closing without government support. The initiative is expected to safeguard 15,000 existing jobs and create 3,000 new positions, primarily union jobs, which aligns with Biden’s commitment to support American workers and manufacturing communities. The grants will help modernize traditional auto manufacturing facilities, enabling them to produce up to 1 million EVs annually. This move is crucial for maintaining the competitiveness of U.S. automakers against international rivals, particularly those in countries with heavy subsidies for their auto industries.
Mixed Chinese trade data in June... China’s exports jumped 8.6% from year-ago to $307.9 billion in June, the fastest annual growth in exports since March 2023 as manufacturers front-loaded orders in anticipation of tariffs from a growing number of trade partners. China’s imports dropped 2.3% from year-ago to a four-month low of $208.81 billion amid weak domestic demand. China’s trade surplus surged to $99.05 billion in June. For the first half of this year, China recorded a trade surplus of $435 billion, with exports rising 3.6% to $1.71 trillion while imports advanced 2.0% to $1.27 trillion. The trade surplus with the U.S. widened to $31.78 billion in June from $30.81 billion the previous month and stood at $159.9 billion through the first half of the year.
China’s money and credit data add to concerns of weak demand... Chinese banks extended 2.13 trillion yuan ($293.55 billion) in new loans in June, more than double the 950 billion yuan the previous month but far less than 3.05 trillion yuan a year earlier. The People’s Bank of China (PBOC) said new loans totaled 13.27 trillion yuan for the first half of the year. The growth of outstanding yuan loans in the Chinese financial system fell to 8.1% in the first six months of 2024, the lowest on record. Growth in broad M2 money supply slowed sharply in June to an all-time low of 6.2% versus a year earlier.
Data points to Japanese yen intervention... Japan likely stepped into currency markets for a third time this year to prop up the yen soon after U.S. inflation figures came out Thursday, according to a Bloomberg analysis of central bank accounts. The scale of intervention was probably around ¥3.5 trillion ($22 billion), based on a comparison of Bank of Japan accounts and money broker forecasts. The suspected intervention on Thursday would be the first aimed at boosting the yen when it was strengthening against the dollar, a fresh development in Japan’s strategy of trying to keep speculators on the back foot since it started propping up the yen in September 2022.
China’s meat imports slump in June... China imported 515,000 MT of meat during June, down 42,000 MT (7.5%) from May and 150,000 MT (22.6%) from year-ago. Through the first half of this year, China imported 3.3 MMT of meat, down 13.4% from the same period last year.
Argentinians shift from beef to cheaper chicken... Argentina, known for its high beef consumption, is shifting towards cheaper chicken as households seek to maximize their shrinking paychecks. According to a report by the Rosario Board of Trade, beef demand is expected to drop below 45 kilograms (99 lbs.) per person this year, the lowest level since records began in 1914. This would mark the first time that Argentina’s beef consumption is nearly equal to its demand for chicken, reflecting a global trend towards increased chicken consumption.
Wholesale beef prices drop again... Choice boxed beef prices fell $2.40 on Thursday while Select declined 56 cents. Wholesale beef prices are declining seasonally, which is typical following the Fourth of July, though movement stayed strong at 142 loads yesterday, indicating still-active retailer buying.
Pork cutout firms again... After a sharp decline on Tuesday, the pork cutout firmed the past two days with a $1.81 advance yesterday as all cuts except loins strengthened. Movement improved to 329.1 loads. High wholesale beef prices may finally be triggering more retailer interest in pork.
Overnight demand news... South Korea purchased 65,000 MT of optional origin feed wheat, excluding Russia and Ukraine, but passed on a tender to buy up to 140,000 MT of corn from South America or South Africa.
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
· 11:00 a.m. Crop Production — NASS
· 11:00 a.m. WASDE — WAOB
· 11:15 a.m. Cotton: World Markets and Trade — FAS
· 11:15 a.m. Grains: World Markets and Trade — FAS
· 11:15 a.m. Oilseeds: World Markets and Trade — FAS
· 11:15 a.m. World Agricultural Production — FAS
· 2:00 p.m. Livestock and Poultry: World Markets and Trade — FAS
· 2:00 p.m. Mink — NASS
· 2:00 p.m. Peanut Prices — NASS
· 2:00 p.m. Turkey Hatchery — NASS
· 2:30 p.m. Commitments of Traders — CFTC