Good morning!
Corn and beans firmer, wheat weaker to start the week... Corn and soybean futures trade on both sides of unchanged overnight but have firmed and are near session highs this morning. Wheat faced followthrough selling overnight. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents higher, soybeans are 1 to 4 cents higher, SRW wheat is 3 to 4 cents lower, HRW wheat is 8 to 10 cents lower and HRS wheat is 2 to 3 cents lower. The U.S. dollar index is around 400 points higher and front-month crude oil futures are about 30 cents higher.
Drier pattern for most U.S. crop regions this week... The Corn Belt, Delta and middle Atlantic Coast states may experience restricted rainfall over the next 10 days, though a tropical disturbance in Florida could impact weather in these regions, according to World Weather Inc. Corn Belt temperatures will be seasonable with a slight cooler bias this week before turning a little warmer than normal. The Plains will see scattered showers and thunderstorms this week.
Ukraine’s grain production, exports to fall sharply... Ukraine’s 2024 grain production is forecast to fall 7.0 MMT (11.7%) from last year to 52.8 MMT, analyst APK-Inform said, including 26.8 MMT of corn, 20.0 MMT of wheat and 4.5 MMT of barley. APK-Inform’s forecast is close to the ag ministry’s 52.4 MMT projection. APK-Inform projects 2024-25 grain exports 36.2 MMT, down 12.9 MMT (26.2%) from the current marketing year. New-crop exports are expected to include 21.3 MMT of corn, 12.7 MMT of wheat and 1.8 MMT of barley.
NOPA revises April soybean crush... The National Oilseed Processors Association (NOPA) revised its April U.S. soybean crush estimate to 169.436 million bu., up from its previous estimate of 166.034 million bushels. The revised April crush was down 13.7% from the record 196.406 million bu. in March and down 2.2% from 173.232 million bu. in April 2023. Inaccurately reported soy processing data from Indiana prompted the revision, NOPA said. Soyoil stocks among NOPA members as of April 30 were revised to 1.832 billion lbs., from the previously reported 1.755 billion lbs., down 1% from the 1.851 billion lbs. on hand at the end of March.
The week ahead in Washington... Focus this week is on congressional action on the fiscal year (FY) 2025 Appropriations bill for USDA. The Agriculture spending bill, which includes funding for USDA, FDA and the Commodity Futures Trading Commission, is scheduled for subcommittee consideration on June 11 and a full committee vote on July 10. The Agriculture spending bill has been allocated $25.8 billion for FY 2025, down from $26.2 billion appropriated for FY 2024. The economic focus will be Wednesday’s consumer price data for May and the conclusion of the Fed’s monetary policy meeting, including the so-called “dot plot” economic projections and Chair Jerome Powell’s press conference. The highlight for agriculture will be Wednesday’s USDA Crop Production and Supply & Demand Reports, which will feature updated old- and new-crop balance sheets and the second winter wheat production estimate.
Judge grants injunction against USDA’s ERP, bans race and sex discrimination in payments... A federal judge in Amarillo, Texas, recently granted a preliminary injunction against USDA regarding the 2022 Emergency Relief Program (ERP). This injunction allows payments to continue but prohibits discrimination based on sex or race. The judge’s decision was influenced by the likelihood that the plaintiffs would prevail on the merits of their case, which challenges the constitutionality of USDA’s methodology for distributing aid under ERP.
FCIC Board increases ECO subsidy rate to 65% for 2025 insurance year... The Federal Crop Insurance Corporation (FCIC) Board recently approved an increase in the subsidy rate for the Enhanced Coverage Option (ECO), effective from the 2025 insurance year starting after July 1, 2024. The subsidy rate for ECO will rise from 44% to 65%, aligning it with the Supplemental Coverage Option (SCO) endorsement. This change, irrespective of current farm bill discussions, aims to boost interest in ECO by lowering coverage costs. ECO offers additional county-based shallow-loss coverage on top of existing multi-peril revenue or yield policies and/or SCO endorsements, covering losses from 90% or 95% of a county’s expected revenue for the insured crop. ECO cannot be purchased with the Stacked Income Protection Plan (STAX) for cotton but can be combined with the Agriculture Risk Coverage (ARC) program, provided no SCO endorsement is also purchased.
Coast Guard plans to reopen the Port of Baltimore channel following additional dredging... This marks the final step in clearing 50,000 tons of debris. The full reopening of the federal channel, expected to bring larger vessels back to Baltimore, is seen as a major milestone. Companies are beginning to schedule shipments to Baltimore, with full recovery anticipated by mid-July. The port’s strategic location makes it a prime hub for freight, benefiting from increased resilience and warehouse space post-pandemic. Challenges remain, such as potential strains on road infrastructure due to increased truck traffic and global shipping disruptions.
Saudi ‘petrodollar’ agreement may not be renewed... Reports over the weekend said Saudi Arabia’s “petrodollar” agreement with the U.S., which expired Sunday, may not be renewed. The 50-year agreement was put in place in 1974. The petrodollar agreement saw Saudi Arabia sell its oil exclusively in U.S. dollars, with the U.S. promising military security and economic development. The reports said Saudi Arabia is now working more closely with China, which is trying to undermine the global dominance of the greenback.
Record shipments to Mexico drive strong April pork exports... The U.S. exported 655.9 million lbs. of pork during April, up 34.8 million lbs. (5.6%) from March and 75.3 million lbs. (13.0%) above year-ago, driven by a record volume to Mexico. During the first four months of 2024, U.S. pork shipments totaled 2.458 billion lbs., up 209.5 million lbs. (9.3%) from the same period last year. Beef exports totaled 259.5 million lbs. during April, up 3.4 million lbs. (1.3%) from March but 8.1 million lbs. (3.0%) below year-ago. During the first four months of the year, beef shipments totaled 992.3 million lbs., down 54.4 million lbs. (5.2%) from the same period last year.
H5N1 update... The H5N1 virus was detected in a dairy herd in Wyoming, the state’s ag department said late Friday. USDA previously confirmed H5N1 in dairy cattle in South Dakota, Texas, Ohio, North Carolina, Michigan, Kansas, Idaho, New Mexico, Colorado, Iowa and Minnesota. Meanwhile, the H5N1 strain that infected a Texas dairy farm worker in March was lethal to ferrets in experiments designed to mimic the disease in humans, the U.S. Centers for Disease Control and Prevention (CDC) reported on Friday. Seasonal flu, by contrast, makes ferrets sick but does not kill them, CDC said. Also, U.S. federal and state agencies are planning research into potential respiratory spread of H5N1 among dairy cattle, Michigan state agriculture and public health officials told Reuters.
China’s sow herd shrinks, slaughter rises... China’s sow herd totaled 39.86 million head at the end of April, down 6.9% from last year, according to the ag ministry. Hog slaughter during the first four months of this year rose 2.3% from the same period last year to 108.38 million head.
Wholesale beef stays strong... Wholesale beef prices firmed 54 cents for Choice and 31 cents for Select on Friday, while movement totaled 119 loads. After dropping last Wednesday, wholesale beef prices bounced back the final two days last week, helping support packer cutting margins, which are estimated to be in the black for most plants.
Summer hogs hold mild premiums to cash index... The CME lean hog index is down 17 cents to $91.75 as of June 6. June lean hog futures, which expire on Friday and are settled against the index on June 18, ended Friday at a 77.5-cent premium to the index. July lean hog futures held a $1.75 premium.
Weekend demand news... South Korea tendered to buy 90,000 MT of milling wheat – 50,000 MT U.S. and 40,000 MT Canadian.
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
- 2:00 p.m. U.S. Agricultural Trade Data Update — ERS
- 3:00 p.m. Crop Progress — NASS