Good morning!
Corn and beans firmer, wheat lower overnight... Corn and soybeans modestly rebounded from Tuesday’s losses overnight, while wheat pulled back from its corrective gains yesterday. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are steady to 3 cents higher and wheat futures are mostly 8 to 11 cents lower. The U.S. dollar index is around 100 points lower and front-month crude oil futures are nearly $1.00 higher.
USDA’s WASDE, Crop Production Reports out later this morning... USDA’s reports at 11:00 a.m. CT will feature updated old- and new-crop balance sheets and the second winter wheat production estimates. For 2023-24 ending stocks, analysts expect corn at 2.009 billion bu. (2.022 billion bu. in May), soybeans at 346 million bu. (340 million bu. in May) and wheat at 688 million bu. (unchanged from May). For 2024-25 ending stocks, analysts expect corn at 2.079 billion bu. (2.102 billion bu. in May), soybeans at 448 million bu. (445 million bu. in May) and wheat at 778 million bu. (766 million bu. in May). Analysts expect winter wheat production of 1.298 billion bu. (1.248 billion bu. in May), including 716 million bu. for HRW (705 million bu. in May), 350 million bu. for SRW (344 million bu. in May) and 229 million bu. for white winter (unchanged from May).
Market focus on ‘dot plot’ projections, Powell comments... The Fed will keep interest rates unchanged following the conclusion of its two-day monetary policy meeting at 1:00 p.m. CT. Market focus will be on the so-called “dot plot” economic projections from Fed officials and Chair Jerome Powell’s press conference as traders try to determine when rate cuts will begin. May consumer price inflation data will be released at 7:30 a.m. CT, with economists expecting an annual rate of 3.4%, which would be unchanged from April.
Boozman unveils Senate GOP farm bill framework... Senate Republicans, led by ranking member John Boozman (R-Ark.), proposed a $1.51 trillion farm bill framework that seeks a 15% average increase in crop reference prices, aimed at providing additional price support for farmers. The framework, while comprehensive, will not be officially introduced by Republicans, who are the minority in the Senate. This proposal contrasts with Senate Democrats’ plan, which includes a 5% increase in crop reference prices. Other key differences include the GOP’s push to tie food-aid benefits more closely to inflation and redirect climate change funds to general conservation. Democrats label these priorities as “poison pills,” complicating the likelihood of passing the bill before the end-of-year true deadline. Click here for more details. Senate Ag Chair Debbie Stabenow (D-Mich.) and USDA Secretary Tom Vilsack blasted the Senate GOP farm bill framework, saying it “follows the same flawed approach” as the House farm bill.
House subcommittee passes FY 2025 Ag appropriations draft measure... Republicans passed their fiscal year (FY) 2025 Ag/FDA appropriations bill out of the House Appropriations Ag Subcommittee via a voice vote Tuesday night, setting up another battle with Democrats this summer. Democrats vowed to oppose it on the House floor. Georgia Rep. Sanford Bishop, the top Democrat on the subcommittee, blasted the bill and what he said were “unrealistic cuts” to USDA funding, along with the GOP trimming foreign food aid provided by the U.S. government. The draft bill proposes $25.9 billion in discretionary funding for USDA, FDA and other agencies, a cut of $355 million from FY 2024. Republicans say this is a 1.4% reduction, while Democrats argue it is 3.6%.
France raises 2023-24 wheat export forecast... France’s ag ministry raised its forecast for wheat exports outside the EU by 150,000 MT to 10.2 MMT. Expected wheat shipments within the bloc were trimmed 70,000 MT to 6.18 MMT.
China raises old-crop cotton import forecast... China’s ag ministry raised its forecast for 2023-24 cotton imports by 200,000 MT to 3 MMT amid higher-than-expected arrivals due to the longstanding price difference between domestic and imported cotton. The ag ministry expects cotton imports to decline to 2 MMT in 2024-25, unchanged from its previous forecast. The ministry made no changes to its corn or soybean import forecasts for either 2023-24 or 2024-25. For corn, it forecasts imports at 19.5 MMT in 2023-24 and 13 MMT in 2024-25. For soybeans, imports are expected to total 96.1 MMT in the current marketing year and 94.6 MMT in 2024-25.
U.S. will widen its sanctions on exports to Russia... The new “impactful” measures will reportedly target third-party sellers of semiconductors, among other things. The Biden administration says such companies in China and Hong Kong are providing Russia with chips that can be used on the battlefield in Ukraine. Exporters of machine tools are also in the White House’s sights.
EU to impose additional tariffs on Chinese EVs... The European Union will slap additional tariffs of as much as 38.1% on electric vehicles (EVs) shipped from China as of next month. The individual duties on BYD will be 17.4%, Geely 20% and SAIC 38.1%. Other producers that haven’t been sampled by the European Commission will be subject to a duty rate of 21%; carmakers that didn’t cooperate in an EU investigation will be subject to 38.1%. The move comes as European automakers are being challenged by an influx of lower-cost EVs from Chinese rivals. China’s foreign ministry said Beijing will take all measures to “firmly defend” its lawful rights and interests, indicating the additional EU tariffs violate market economy principals and will eventually undermine Europe’s own interest.
China’s consumer inflation steady, producer price deflation eases... China’s annual consumer inflation rate held at 0.3% in May. However, this marked the fourth straight month of year-over-year gains, signaling a modest recovery in domestic demand. Food prices declined for an 11th straight month, down 2.0% from year-ago, though that was the mildest decline since February. Food prices fell at softer paces for eggs (-7.4% vs. -10.6% in April), fresh fruit (-6.7% vs. -9.7%), milk (-1.7% vs. -1.8%) and cooking oils (-5.1% vs. -5.3%), while costs accelerated for fresh vegetables (2.3% vs. 1.3%) and pork (4.6% vs. 1.4%). China’s producer prices dropped by 1.4% from year-ago in May, the 20th straight month of contraction in factory-gate prices but the mildest decline since February.
British economy stalls in April... British GDP was unchanged on a monthly basis in April after a 0.4% rise in March, its weakest performance in four months. On an annualized basis, British GDP rose 0.6%, down from 0.7% growth in March.
WHO confirms human case of bird flu in India... The World Health Organization (WHO) said a case of human infection of the H9N2 virus was detected in a four-year-old child in the eastern Indian state of West Bengal. The patient had exposure to poultry at home and in his surroundings. This is the second human infection of H9N2 bird flu in India, with the first in 2019, the agency said.
Retailer demand for beef stays strong... Choice boxed beef prices firmed another 79 cents on Tuesday while Select dropped 42 cents. Movement improved to 144 loads, signaling there’s still strong retailer demand. Wholesale beef gains have strengthened packer margins, which are now solidly in the black.
Bellies fuel pork cutout gain... The pork cutout firmed $3.23 on Tuesday, fueled by a $16.08 jump in primal bellies. Loins and ribs also posted strong gains. Movement improved to 328.4 loads even amid the stronger prices. Meanwhile, the CME lean hog index is down 20 cents to $91.32 as of June 10, the fourth straight daily decline.
Overnight demand news... Egypt purchased 400,000 MT of wheat, including 180,000 MT Romanian, 120,000 MT Ukrainian and 100,000 MT Bulgarian. Japan purchased 1,500 MT of feed wheat from an unspecified source. Jordan tendered to buy up to 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
- 8:00 a.m. Food and Nutrition Assistance Landscape: FY 2023 Annual Report — ERS
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. WASDE — WAOB
- 11:00 a.m. Meat Price Spreads — ERS
- 11:00 a.m. Crop Production — NASS
- 11:15 a.m. Cotton: World Markets and Trade — FAS
- 11:15 a.m. Grains: World Markets and Trade — FAS
- 11:15 a.m. Oilseeds: World Markets and Trade — FAS
- 11:15 a.m. World Agricultural Production — FAS
- 1:00 p.m. FOMC meeting concludes — Fed
- 2:00 p.m. Broiler Hatchery — NASS