Good morning!
Grains firmer overnight... Corn and soybeans built on Tuesday’s corrective gains overnight, while wheat futures firmed after recent losses. As of 6:30 a.m. CT, corn futures are trading mostly 3 cents higher, soybeans are a nickel higher and wheat futures are 7 to 9 cents higher. The U.S. dollar index is more than 500 points lower and front-month crude oil futures are around 40 cents higher.
GOP push continues for new farm bill; another extension likely... House Agriculture Committee Chair Glenn “GT” Thompson (R-Pa.) and Senate Ag Committee Ranking Member John Boozman (R-Ark.) are actively advocating for a new farm bill. However, they anticipate the necessity of another extension of the 2018 Farm Bill to allow more time for the completion of a new package. Boozman expressed at the Republican National Convention that an extension would be beneficial for farmers. Despite potential Republican gains in the upcoming November elections, Thompson stated that this would not affect their legislative efforts. He emphasized a consistent approach to agriculture legislation, regardless of political changes, expressing a commitment to continued work in this area.
Thune concerned about Trump’s potential tariffs... Senate Minority Whip John Thune (R-S.D.) expressed concerns about former President Donald Trump’s proposed tariffs. At the Republican National Convention, Thune, who has previously opposed tariffs, emphasized that any new tariffs should be targeted to minimize negative impacts on agriculture. “I’m not a big fan of tariffs, and I made that clear during the last Trump administration,” Thune said at an event held by Politico and CNN at the convention. Thune said he’ll wait to push back until he sees what Trump’s tariff policies will look like. If he imposes “uniform tariffs across the board,” Thune said, “we’re going to have some serious conversations about that,” as they could expose the agriculture sector to retaliatory actions.
AFBF: SAF tax credit will have almost no farm impact in 2024... The American Farm Bureau Federation (AFBF) says that while recent guidelines on how U.S.-grown grains and oilseeds can qualify as potential sustainable aviation fuel (SAF) feedstocks is a step in the right direction, the timing and stringent requirements pose challenges for farmers. Many relevant decisions were made before the rules were announced, and the paperwork requirements are extensive. The current system’s focus on specific products and practices can lead to economic inefficiencies that may undercut environmental benefits, the farm group notes. Examples include the importation of Brazilian sugar ethanol and used cooking oil to take advantage of U.S. tax credits, potentially displacing more sustainable domestic options. If guidance on Clean Fuels Production Credit (Section 45Z) for 2025-2027 are released earlier with more flexible sustainability practices and reasonable recordkeeping requirements, it could lead to more widespread adoption of sustainable agriculture practices. AFBF’s bottom line: To maximize the environmental and economic benefits of these programs, a more comprehensive and flexible approach is needed. This should include a scientific framework that captures the full impact of production and transportation, as well as broader eligibility for U.S. row crops in future guidance.
Farm group lowers German wheat crop forecast... Germany’s 2024 wheat crop will fall 6.2% from last year to 20.20 MMT, the country’s association of farm cooperatives said, down from its prior forecast of 20.34 MMT. Reductions had been expected following reduced planted areas and poor weather, including excessive rain this summer, it said.
Google-backed AI startup Cropin wants to predict crop production... Food and agriculture AI startup Cropin Technology Solutions has unveiled a real-time intelligence solution to forecast future yields for 13 crops that account for 80% of global food needs. The company unveiled Sage, powered by Alphabet Inc.’s Google Gemini AI model, which converts the world’s agricultural landscape into a proprietary grid-based map and then delivers precise predictive intelligence based on historical data. The company’s technology fuses generative AI with four decades of climate data, earth data and knowledge graphs to decode each crop country-by-country and predict how a certain crop will behave this season, next year or over the next five years.
Port of Long Beach tallies highest volume in two years... The Port of Long Beach, the second-busiest U.S. port for seaborne trade, reported its strongest total volume for June and the highest number of inbound containers since mid-2022. This increase is attributed to strong consumer spending, concerns about potential new U.S. tariffs on Chinese goods and the threat of labor issues at East and Gulf coast ports. Port of Long Beach CEO Mario Cordero noted the port is regaining market share, with consumer spending driving cargo to their docks as the peak shipping season approaches. Cordero anticipates modest growth for the second half of 2024.
China ag group warns of tighter phosphate export rules amid price surge... The China Agricultural Means of Production Association (CAMPA) warned that export policies for phosphate may tighten due to surging domestic prices, urging companies to curb speculative buying and stabilize supplies. As of July 15, the average wholesale price index of domestic di-ammonium phosphate (DAP) and mono-ammonium phosphate (MAP) have risen 9.99% and 23.08%, respectively, from a year ago due to higher costs of raw materials and weak seasonal demand, CAMPA said. Companies should “fulfill their social responsibility and actively respond to the national policy requirements of maintaining supply and price stability to ensure that the domestic supply of fertilizers is sufficient,” it said.
U.S. WTO delegate: China operates in ‘predatory’ manner... The challenges that China presents to the international trading system are growing, a U.S. delegate to the World Trade Organization (WTO) said, accusing Beijing of “predatory” industrial practices that harm other countries. “The PRC has doubled down on its state-led, nonmarket approach to the economy, to the detriment of workers and businesses in the United States and other countries, including emerging and developing economies,” David Bisbee, deputy permanent representative of the U.S., told a WTO meeting where China’s trade policies are under review.
Euro zone consumer inflation eases in June... Annual consumer inflation in the euro zone eased to 2.5% above year-ago in June, in line with preliminary data and down from 2.6% the previous month. Core inflation, excluding food, energy, alcohol and tobacco prices, held at 2.9%.
Wholesale beef prices drop... Choice boxed beef prices fell $2.23 to $319.26 while Select dropped $3.23 to $301.59, moving the Choice/Select spread to $17.67. Fading wholesale prices are typical for this time of year as demand slows as temperatures rise, especially for non-ground beef.
Pork cutout back above $100... The pork cutout rose $2.58 to $100.87 on Tuesday, fueled by a $9.71 jump in primal ham prices. That’s the first time the cutout topped $100.00 since June 14. The CME lean hog index also firmed 20 cents to $88.62 as of July 15, marking consecutive days of modest gains.
Overnight demand news... Taiwan purchased 65,000 MT of corn expected to be sourced from the United States. Egypt purchased 770,000 MT of wheat – 720,000 MT Russian and 50,000 MT Bulgarian. Thailand passed on a tender to buy up to 175,200 MT of optional origin feed wheat. Jordan tendered to buy 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. Feed Grains: Yearbook TablesERS
· 2:00 p.m. Agricultural Chemical Usage - Fruits — NASS
· 2:00 p.m. Catfish Production — NASS
· 2:00 p.m. Broiler Hatchery — NASS