First Thing Today | July 23, 2024

Beans firmer, corn and wheat weaker overnight.

Pro Farmer's First Thing Today
Pro Farmer’s First Thing Today
(Pro Farmer)

Good morning!

Beans firmer, corn and wheat weaker overnight... Soybeans mildly extended Monday’s strong gains during the overnight session, while corn and wheat faded. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 1 to 2 cents higher and wheat futures are 4 to 8 cents lower. The U.S. dollar index is modestly firmer, while front-month crude oil futures are mildly weaker.

Cordonnier raises corn yield, production forecasts... Crop consultant Dr. Michael Cordonnier raised his U.S. corn yield forecast by 1.5 bu. to 181.5 bu. per acre as weather has been favorable for pollination and there aren’t any threatening conditions in the near-term forecast. That increased his corn production estimate to 14.97 billion bushels. Cordonnier left his soybean yield and production forecasts at 52 bu. per acre and 4.39 billion bu., respectively.

Corn CCI rating unchanged, soybean crop modestly improves... USDA rated 67% of the corn crop as “good” to “excellent” and 10% “poor” to “very poor.” The soybean crop was rated 68% “good” to “excellent” and 8% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop was unchanged at 373.5, while the soybean crop increased 2.0 points to 366.9. USDA rated 77% of the spring wheat crop as “good” to “excellent” and 5% “poor” to “very poor.” On the CCI, spring wheat slipped 0.1 point to 383.9. Click here for details.

Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of July 21:

· Corn: 67% good/excellent (68% last week); 61% silking (56% average); 17% dough (11% average).

· Soybeans: 68% good/excellent (68% last week); 65% blooming (60% average); 29% setting pods (24% average).

· Spring wheat: 77% good/excellent (77% last week); 89% headed (90% average).

· Cotton: 53% good/excellent (45% last week); 81% squaring (76% average); 42% setting bolls (34% average).

· Winter wheat: 76% harvested (72% average).

HRS wheat tour starts today... The Wheat Quality Council’s annual HRS tour through North Dakota, along with far western Minnesota and far northern South Dakota kicks off this morning. We’ll highlight scout reports through the week. Final yield results will be released Thursday afternoon, along with the North Dakota production guesstimate from Tour scouts.

SovEcon inches up Russian wheat crop forecast... SovEcon raised its Russian wheat crop forecast by 100,000 MT to 84.2 MMT. The Black Sea agricultural consultancy raised the country’s total grain production to 130.5 MMT, up 3.1 MMT from its prior forecast.

‘New El Nino’ discovered south of equator... A new climate pattern, the “Southern Hemisphere Circumpolar Wavenumber-4 Pattern,” has been discovered near New Zealand and Australia, affecting the entire Southern Hemisphere. Unlike El Niño, which starts in the tropics, this pattern originates in the mid-latitudes. The study, published in JGR Oceans, highlights the significant interaction between the ocean and atmosphere. Researchers found that temperature changes in this small ocean area create a ripple effect, forming four alternating warm and cool areas circling the Southern Hemisphere. This discovery could improve weather forecasting and climate prediction, especially in the Southern Hemisphere. Bottom line: This new pattern happens independently of other known weather systems in tropics such as the warming El Niño pattern of currents and trade winds or the cooling La Niña.

China’s loan collateral tweak will ease ‘asset famine’... China’s decision to lower the collateral requirement for medium-term loans will alleviate “asset famine” pressure on the bond market, state media reported on Tuesday. “A large amount of bonds will be released if financial institutions choose to sell long-term bonds after the change to collateral requirement, effectively alleviating the pressure of ‘asset famine’ in the bond market,” the official Securities Times reported, citing a source close to the central bank. Market participants believe the move will also help maintain an upward-sloping yield curve, which central bank officials appear determined to maintain.

House clears WRDA measure... The House on Monday passed the Water Resources Development Act (WRDA) aiming to fund and study water resources projects nationwide. The legislation, which garners bipartisan support every two years, authorizes nearly $10 billion for 12 projects. These projects focus on navigation, hurricane and storm damage risk reduction, flood control, and ecosystem restoration. Additionally, the bill mandates the Army Corps of Engineers to conduct 161 feasibility studies, emphasizing drought resiliency and water conservation. It also includes a requirement for an assessment of the future of dams in Oregon, following a missed deadline from the 2022 WRDA. The bill will need to be reconciled with a similar Senate measure, which was advanced by the Environment and Public Works Committee and filed as an amendment to the fiscal year 2025 National Defense Authorization Act. The Senate might also consider WRDA as a standalone measure this summer.

Massachusetts’ Q3 pork law survives industry court challenge... A federal judge on Monday rejected an industry-backed bid to block enforcement of a Massachusetts law banning the sale of pork from pigs kept in tightly confined spaces, saying a federal law governing slaughterhouses does not preempt it. U.S. District Judge William Young in Boston rejected arguments by Missouri-based pork producer Triumph Foods and out-of-state hogs farmers that the state law conflicted with a federal law regulating slaughterhouse inspections. The pork producers argued the Federal Meat Inspection Act preempted the state’s law because it created additional, different requirements on how pigs are to be handled than the federal law provided. But Young said Massachusetts’ law does no more than ban the sale of non-compliant pork meat and does not regulate how a slaughterhouse itself operates. This ruling represents a significant victory for animal welfare advocates and supporters of the Massachusetts law. However, it also highlights the ongoing legal challenges faced by state-level animal welfare legislation in the context of interstate commerce and federal regulations.

Cash cattle fundamentals weakening... Last week’s average cash cattle price dropped 57 cents to $193.67, the lowest level since mid-June. Wholesale beef prices fell 39 cents for Choice to $313.44 and 47 cents for Select to $298.33 on Monday. The Choice price is the lowest since the end of May.

Cash hog fundamentals strengthening... The CME lean hog index is up another 9 cents to $89.80 as of July 19, the sixth straight daily gain – the longest string of gains since mid-April. The pork cutout rose $2.36 on Monday to $104.52, the highest level since August 2023.

Overnight demand news... Exporters reported no tenders or sales.

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. Fruit and Tree Nuts Data — ERS

· 11:00 a.m. Vegetables and Pulses Data — ERS

· 2:00 p.m. Dairy: World Markets and Trade — FAS

· 2:00 p.m. Chickens and Eggs — NASS

· 2:00 p.m. Milk Production — NASS