Good morning!
Corn near unchanged, beans and wheat lower this morning... Corn futures favored the upside in two-sided trade overnight, while soybeans and wheat faced price pressure. As of 6:30 a.m. CT, corn futures are trading steady to fractionally higher, soybeans are 2 to 4 cents lower and wheat is mostly 2 to 5 cents lower. The U.S. dollar index is around 180 points lower and front-month crude oil futures are more than $1.00 lower.
HRS tour Day 2 results... Scouts on the second day of the Wheat Quality Council’s annual HRS tour found strong yield potential in north-central and northwestern North Dakota. Samples collected averaged 53.7 bu. per acre, up from 45.7 bu. on similar routes last year and the five-year average (excluding 2020 because the tour was canceled due to Covid) of 40.0 bu. per acre. Scouts again noted the presence of scab, though they weren’t certain about the impact to yields. “I’ve been doing this for a long time, and I don’t ever remember the crops being this uniformly good all over the state,” Dave Green, executive vice president of the Wheat Quality Council, said.
Weekly Export Sales Report out this morning... For the week ended July 18, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 200,000-700,000 | 437,840 | 100,000-600,000 | 485,681 |
Wheat | NA | NA | 300,000-625,000 | 578,502 |
Soybeans | 100,000-400,000 | 228,111 | 500,000-900,000 | 507,025 |
Soymeal | 50,000-400,000 | 209,292 | 225,000-400,000 | 99,407 |
Soyoil | 0-10,000 | 3,276 | 0-15,000 | 14,900 |
Australia accuses units of China’s COFCO of wheat futures manipulation... In a court filing late on Wednesday, the Australian Securities and Investments Commission (ASIC) said an employee of COFCO International Australia placed an order to sell Eastern Australia Wheat Futures contracts below market value just before the close of trading on the Australian Securities Exchange (ASX) 34 times in 2022 in an attempt to influence the settlement price of the contract. Another local COFCO unit, COFCO Resources, stood to benefit because it held a short position in the same futures contracts, the federal civil court filing said. This is the first time ASIC has brought action against units of COFCO Corp, which is owned by the Chinese government and is one of China’s largest food and grain traders. ASIC said it was seeking unspecified fines and declarations of wrongdoing.
EU set to approve Bunge purchase of Viterra... Bunge Global SA’s planned $8.2 billion buyout of Viterra Inc. is set to be approved by the European Union after concessions offered by the firms appear to have appeased regulator concerns. Under the deal, Bunge will buy Glencore Plc-backed Viterra in stock and cash, becoming the world’s second-biggest agricultural trading company by revenue. Last month, the European Commission’s merger enforcers opened a preliminary investigation into the deal, and raised concerns over how the deal could impact competition in Poland and Hungary. Bunge offered commitments in response to the EU concerns, including divestments of all of Viterra’s crush and refining capabilities for certain oilseeds in the two countries. EU officials are likely to conditionally approve the deal by a current deadline of Aug. 1, people familiar with the matter told Bloomberg.
China concerned about EU’s protectionism on biodiesel... China is highly concerned about the European Union’s protectionist actions in the biodiesel industry, the commerce ministry said. The comments come after the EU announced last Friday it will impose anti-dumping duties of 12.8% to
PBOC surprises by lending again at lower rates, cash injection... The People’s Bank of China (PBOC) surprised markets for a second time this week by conducting an unscheduled lending operation on Thursday at steeply lower rates, suggesting authorities are trying to provide heavier monetary stimulus to boost the economy. PBOC issued 200 billion yuan ($27.5 billion) in one-year loans under its medium-term lending facility (MLF) at 2.30%, down 20 basis points from its previous MLF loan. The central bank also injected 235.1 billion yuan into markets through seven-day reverse repos at 1.70% and said the cash injection through the short-term instrument was to “maintain reasonably ample month-end banking system liquidity conditions.”
Biden addresses nation from the Oval Office... President Joe Biden Wednesday night spoke not just about his decision not to seek re-election, but also about what he intends to do with the roughly six months he has left in office. Biden acknowledged the need for new leadership, stating it was “time to pass the torch” to younger voices, but gave no details on why he exited the presidential race. He emphasized that this was the best way to unite the country and bring fresh perspectives to governance. Without directly naming former President Kamala Harris, describing her as “tough” and “capable.” He expressed confidence in her leadership abilities and positioned her as his likely successor. Biden affirmed his commitment to remain active during his final months in office.
Cold Storage Report out this afternoon... USDA will detail frozen meat stocks at the end of June. The five-year average is a 5.4-million-lb. decline in beef stocks and a 18.0-million-lb. drop in pork stocks during the month.
Wholesale beef price slide extends... Wholesale beef prices fell 53 cents for Choice to $312.68 and Select dropped $2.70 to $293.96. Movement stayed strong at 188 loads, increasing the five-day average to 161.4 loads.
Cash hog fundamentals continue to strengthen... The CME lean hog index is up another 69 cents to $90.77 as of July 23 – the eighth straight daily gain and the largest increase since April 11. The pork cutout firmed $1.26 to $104.76 on Wednesday, the highest since Aug. 24 of last year.
Overnight demand news... Exporters reported to 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
· 7:30 a.m. Weekly Export Sales — FAS
· 8:00 a.m. Food Price Outlook — ERS
· 2:00 p.m. Fruit and Tree Nuts Outlook: July 2024 — ERS
· 2:00 p.m. Citrus: World Markets and Trade — FAS
· 2:00 p.m. Cold Storage — NASS
· 2:00 p.m. Livestock Slaughter — NASS
· 2:00 p.m. Poultry Slaughter — NASS