Good morning!
Grains under pressure overnight... Corn, soybeans and wheat faced moderate to heavy selling pressure during the overnight session. As of 6:30 a.m. CT, corn futures are trading 4 to 6 cents lower, soybeans are 14 to 15 cents lower, winter wheat markets are 12 to 15 cents lower and spring wheat is 8 to 9 cents lower. The U.S. dollar index is trading just above unchanged, while front-month crude oil futures are modestly weaker.
Cooler weak for Corn Belt... There will be one more day of heat today before cooler temperatures move into the Corn Belt for the remainder of the week, along with scattered rains. The Southern Plains, Delta and Southeast will likely see scattered rains as well.
Record June NOPA soy crush expected... Analysts expect the National Oilseed Processors Association (NOPA) to report its members crushed 177.9 million bu. of soybeans during June. That would be down 3.1% from May but up 7.8% from year-ago and a record for the month. Soyoil stocks are expected to total 1.724 billion lbs., which would be down 3.2% from May and 1.2% from year-ago.
The week ahead in Washington... Congress on recess this week due to the Republican National Convention July 15-19. But the key focus for the week occurred Saturday afternoon when an assassination attack was made on former President Donald Trump during a rally in Pennsylvania. Trump reportedly revised his convention speech to emphasize unity. The economic focus will be today’s speech by Fed Chair Jerome Powell to the Economic Club of Washington and the Fed’s Beige Book on Wednesday highlighting economic conditions in the 12 districts. The key agricultural report will be USDA’s Cattle on Feed Report Friday afternoon.
Potential impacts from Trump assassination attempt... Trump urged Americans on Sunday morning to “stand united” and “defiant in the face of wickedness.” Bloomberg notes an eerie comparison with Brazil’s Jair Bolsonaro, the far-right leader who was stabbed in the stomach during a 2018 campaign rally, a defining moment that fired up his base and propelled him to power. Democrats cautioned it’s too early to draw easy conclusions about political implications. As for market impact, there is little precedent for events like this. When President Ronald Reagan was shot four decades ago, the stock market dipped before closing early. The next day, March 31, 1981, the S&P 500 rose over 1%.
China asks WTO to establish expert panel on U.S. EV subsidies dispute... China submitted a request to the World Trade Organization (WTO) to set up an expert panel to consider a dispute settlement against energy vehicle (EV) subsides under the U.S. Inflation Reduction Act, China’s commerce ministry said. Beijing opened the WTO dispute in late March but the U.S. has failed to reach a solution with China through consultations, the ministry said.
China’s Q2 GDP lower than expected... China’s economy expanded 4.7% in the second quarter, the slowest growth since the firmer quarter of last year, adding to expectations Beijing will need to unleash more stimulus. The latest figures came as the communist party began the Third Plenum, a key political event in which various reform measures are likely to be launched, along with recommendations for more support action to boost recovery. China’s economy grew by 5.0% during the first half of the year. Goldman Sachs lowered its forecast for China’s 2024 GDP to 4.9% from 5.0% after the data.
PBOC leaves medium-term rate unchanged... The People’s Bank of China (PBOC) kept the rate on 100 billion yuan ($13.8 billion) in one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50%. With 103 billion yuan in MLF loans set to expire this month, the operation resulted in a net 3-billion-yuan fund withdrawal from the banking system. PBOC also injected 129 billion yuan through seven-day reverse repos while keeping borrowing costs unchanged at 1.80%.
China new home prices fall at fastest pace in 9 years... China’s new home prices in 70 cities declined by 4.5% year-on-year in June 2024, after a 3.9% fall in the previous month. It was the 12th straight month of decrease and the fastest pace since June 2015, despite multiple efforts from Beijing to mitigate the impact of a prolonged property downturn and weak economic recovery.
USDA proposes amendments to federal milk marketing orders... USDA issued a recommended decision proposing amendments to the uniform pricing formulas applicable in all 11 Federal milk marketing orders (FMMOs). This decision follows a national hearing that took place from Aug. 23, 2023, to Jan. 30, 2024, in Carmel, Indiana, where USDA heard testimony and received evidence on 21 proposals from the dairy industry. The publication of this came in today’s Federal Register and marks the beginning of a formal comment period that will last until Sept. 13, 2024. After the comment period, USDA will review all submitted comments before making a final decision on the proposed amendments to FMMOs.
China’s Q2 pork output declines... China’s pork production fell 3% from year-ago in the second quarter to 13.98 MMT, following a 0.4% decline in the first quarter. That marked the first consecutive quarterly declines on an annual basis in output since 2020. During the first half of the year, China’s pork output totaled 29.81 MMT, down 1.7% from the same period last year. China slaughtered 363.95 million hogs during the first half of this year, down 3.1% from last year.
Colorado confirms four human H5N1 infections, fifth suspected... Colorado reported four confirmed infections of the H5N1 virus in poultry workers and is checking on the status of a fifth suspected case, health authorities said on Sunday. The workers showed mild symptoms, from conjunctivitis (pink eye) to respiratory signs, though none were hospitalized.
Wholesale beef prices remain elevated... Choice boxed beef prices firmed 41 cents on Friday to $322.06, while Select dropped $1.07 to $302.31. Wholesale prices pulled back from their recent highs last week, but values remain elevated, though estimated packer margins are now in the red.
Cash hog index drops, pork cutout firms... The CME lean hog index is down 27 cents to $88.38 as of July 11, extending the seasonal pullback to the lowest level since April 9. The pork cutout firmed $2.61 to $98.84 on Friday as all cuts except ribs posted gains.
Weekend demand news... Taiwan tendered to buy 65,000 MT of corn to be sourced from the U.S., Brazil, Argentina 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
· 10:00 a.m. Export Inspections — AMS
· 11:00 a.m. Monthly Soy Crush — NOPA
· 2:00 p.m. Dairy Monthly Tables — ERS
· 2:00 p.m. Season Average Price Forecasts — ERS
· 2:00 p.m. Wheat data — ERS
· 3:00 p.m. Crop Progress — NASS