Good morning!
Quiet overnight grain trade... Corn, soybean and wheat futures traded in relatively tight ranges overnight, with wheat mildly favoring the upside this morning while corn and soybeans are modestly weaker. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are mostly a nickel lower and wheat futures are fractionally to a penny higher in most contracts. The U.S. dollar index is nearly 100 points higher and front-month crude oil futures are around 30 cents lower this morning.
Beryl to change Midwest weather... Remnants of Hurricane Beryl will reshape near-term rainfall biases across the Midwest, according to World Weather Inc. The forecaster says, “The storm will first bring some welcome moisture to the eastern Midwest where rainfall has been a little lackluster at times in the recent weeks. The storm’s presence over the eastern U.S. while a massive heat ridge remains over the western U.S. will lead to a broad trough of low pressure being over the Plains and Midwest that promises to reduce rain in the western Midwest and Central to Northern Plains. These changes may last long enough to remove some of the surplus moisture from the northwestern Corn Belt while maintaining a good environment for summer crops in the remainder of the region.”
Corn, soybean and spring wheat CCI ratings improve... USDA rated 68% of the corn crop as “good” to “excellent” and 9% “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 rose 3.0 points to 375.3, while the soybean crop improved 2.4 points to 365.4. Both crops remain rated well above last year at this time. USDA rated 75% of the spring wheat crop as “good” to “excellent” and 4% “poor” to “very poor.” On the CCI, spring wheat improved 1.2 points to 383.5. The spring wheat crop was also rated well above last year on this date. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of July 7:
· Corn: 68% good/excellent (67% last week); 24% silking (14% average); 3% dough (2% average).
· Soybeans: 68% good/excellent (67% last week); 34% blooming (28% average); 9% setting pods (5% average).
· Spring wheat: 75% good/excellent (72% last week); 59% headed (60% average).
· Cotton: 45% good/excellent (50% last week); 52% squaring (50% average); 19% setting bolls (15% average).
· Winter wheat: 63% harvested (52% average).
Cordonnier leaves U.S. crop forecasts unchanged, adjusts South American corn production... Crop consultant Dr. Michael Cordonnier kept his U.S. corn and soybean production forecasts at 14.77 billion bu. and 4.39 billion bu., respectively, noting generally benign weather conditions. Cordonnier raised his Brazilian corn crop forecast 2 MMT to 116 MMT given higher-than-expected yields in top producer Mato Grosso. He lowered his Argentine corn crop forecast 1 MMT to 46 MMT as yields are declining as harvest progresses. Cordonnier also lowered his Paraguay corn crop estimate 500,000 MT to 4.5 MMT. He made no changes to his South American soybean crop forecasts.
France forecasts 15% drop in wheat production... French soft wheat production is expected to decline 15.4% to 29.7 MMT, the lowest level since 2020, according to the first estimate from the country’s ag ministry. That would be 14.2% below the five-year average. The wheat crop forecast was based on an expected yield of 6.99 tons per hectare (down from 7.38 tons per hectare last year) and harvested area of 4.24 million hectares, (down from 4.75 million hectares in 2023).
Economists, markets focused on Powell testimony... Federal Reserve Chair Jerome Powell reports on the economy and monetary policy to the Senate Banking Committee at 9 a.m. CT. Economists expect Powell to maintain his stance that progress is being made on easing inflation but the Fed will remain patient not wanting to cut interest rates too soon and have price pressure flare up.
Study: H5N1 not easily spread via air... The H5N1 virus infecting U.S. dairy cows is not easily transmitted through the air among ferrets, which are considered to be the best small mammal for studying influenza virus infection and transmission, a study by researchers at the University of Wisconsin-Madison showed. The study also confirmed the virus, isolated from the milk of an infected cow in New Mexico, made both mice and ferrets sick after exposure to the unpasteurized milk. A virus that can spread easily through the air between humans would pose a greater pandemic threat than H5N1 currently does.
Cattle futures convey traders’ apprehension... Cattle futures reversed Monday’s early gains and finished sharply lower despite the cash market scoring a record high for a fourth consecutive week and surging wholesale beef prices. With beef entering a historically weak demand period, Monday’s price action despite already big discounts to the cash market signals traders expect cash fundamentals to top soon and decline seasonally through summer.
Cash hog index continues to slip, wholesale pork prices stabilize... The CME lean hog index is down 44 cents to $88.76 as of July 5, marking a new low on the decline from the seasonal high and the lowest level since April 9. The pork cutout firmed $1.08 on Monday, the second consecutive daily gain following last week’s drop to the lowest level since late March.
Overnight demand news... South Korea tendered to buy 85,000 MT of milling wheat to be sourced from the U.S. or Canada. Japan is seeking 107,330 MT of milling wheat via its weekly tender.
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
· No reports scheduled.