Good morning!
Varied price tone in quiet overnight grain trade... Corn, soybeans and wheat traded on both sides of unchanged while holding in relatively tight trading ranges overnight. As of 6:30 a.m. CT, corn future are trading mostly 3 cents higher, soybeans are narrowly mixed, SRW wheat is 3 to 5 cents higher, HRW wheat is mostly a penny higher and HRS wheat is 4 cents higher. The U.S. dollar index is around 250 points higher and front-month crude oil futures are about 50 cents lower.
Weekly Export Sales Report out this morning... For the week ended June 6, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 700,000-1,250,000 | 1,180,938 | 0-200,000 | 113,257 |
Wheat | (200,000)-100,000 | (228,999) | 250,000-600,000 | 616,904 |
Soybeans | 150,000-550,000 | 189,557 | 0-200,000 | 73,803 |
Soymeal | 175,000-450,000 | 250,218 | 0-50,000 | 4,101 |
Soyoil | (5,000)-12,000 | 5,968 | 0-10,000 | 3,500 |
Chinese farmers fighting hot temps, drought... China’s ag ministry said record high temperatures have had an adverse impact on planting of crops. The ministry sent out several work groups to seven provinces to offer guidance in the fight against drought. China’s water resources ministry this week launched emergency responses to manage drought on in Gansu, Shaanxi, Shanxi, Henan and Shandong provinces, indicating various regions in the country spanning the northwest to the east are facing parched and scorching conditions.
Strategie Grains cuts EU wheat crop forecast... Strategie Grains cut its EU wheat production forecast by 1.7 MMT to 121.8 MMT, which would be down 3.6% from year-ago and the smallest since 2020-21. The consultancy said it anticipated France would see the biggest year-over-year decline in production followed by Germany, Poland and Hungary. Strategie Grains also lowered its outlook for this year’s EU barley crop by 800,000 MT to 52.2 MMT.
Unions suspend strikes at Australia’s biggest sugar maker... Unions have temporarily suspended strikes at mills run by Australia’s largest sugar producer Wilmar Sugar and Renewables, as negotiations over worker pay resume. Wilmar told union delegates at a meeting on Thursday it was willing to improve its pay offer and the unions agreed to pause their work stoppage.
Russia halts dollar, euro trade settlements... Russia’s main exchange said it’s halting trading in US dollars and the euro after the U.S. unveiled a raft of measures designed to further isolate Moscow from the international financial system over its war in Ukraine. The Moscow Exchange on Thursday halted trading on the foreign exchange, precious metals, stock, money and the standardized over-the-counter (OTC) derivatives markets in instruments with settlement in dollars and the euro. The Bank of Russia said it will use bank and OTC data to set the ruble’s exchange rates to those currencies.
G7 to tap frozen Russian assets for Ukraine aid... G7 nations agreed to provide Ukraine with approximately $50 billion in fresh aid by tapping into the profits generated by frozen Russian sovereign assets. The structure of the loans will be based on the size of the economies of the participating countries, with funds expected to begin flowing to Ukraine by the end of the year.
The funds will come from the profits of about $280 billion of blocked Russian assets, mostly held in Europe. The U.S., EU and other G-7 participants will each provide loans to Ukraine, to be repaid using profits generated by these frozen assets. U.S. National Security Advisor Jake Sullivan indicated the major elements of the plan will be decided at the G7 summit, with specific details to be worked out later.
China could target EU pork, dairy in retaliation for EV tariffs... Food companies from dairy producers to pork exporters are on high alert for potential retaliatory tariffs from China after the European Union’s decision on Wednesday to impose anti-subsidy duties on Chinese-made electric vehicles (EVs). China’s state media reported domestic companies are preparing to request investigations into some EU dairy and pork imports over anti-subsidy or anti-dumping concerns. As trade tensions between the EU and China intensify, some European officials have warned against imposing import duties on food products.
Biden administration announces national strategy to cut food waste and boost recycling... A strategy aiming to cut waste, boost organics recycling, reduce climate pollution and support a circular economy, was announced by the Biden administration, involving EPA, USDA and FDA. It seeks to cut food loss and waste by 50% by 2030 through consumer education, innovative waste reduction methods and expanding organics recycling infrastructure. The initiative aligns with the United Nations’ Sustainable Development Goal Target 12.3 and supports the U.S. Methane Emissions Reduction Action Plan.
EU industrial production contracts in April... Industrial production in the euro zone declined 0.1% in April, reversing from a downwardly revised 0.5% growth in the previous month. On an annualized basis, industrial production fell 3%, down from a 1.2% decline in March.
Companies working to find H5N1 vaccine for cattle... Twenty-four companies are working to develop an H5N1 vaccine for cattle, as the virus spreads among U.S. dairy herds, USDA Secretary Tom Vilsack told Reuters. In addition to the two dozen companies working at varying stages of vaccine development, USDA is conducting its own preliminary research into a vaccine at its laboratory in Ames, Iowa, Vilsack said. The agency is looking for a vaccine candidate to test for efficacy, he said, noting “that could happen tomorrow, or it could take six months or it could take a year.”
Iowa reports third H5N1 dairy outbreak... Iowa reported a case of H5N1 in a dairy herd in Sioux County, the second in the county and third in the state. Infections have been found within the past week in Sioux County dairy herds of 1,700 and 250 cows, following an earlier case in an O’Brien County herd of 4,500 cows. The virus had been confirmed in two Iowa poultry flocks prior to the recent cattle infections: a Sioux County flock with 4.2 million egg-laying chickens and a Cherokee County flock with 103,000 turkeys.
Slow developing cash cattle market... Cash cattle trade has been limited so far this week, with trade too light to set a price trend. Despite big discounts to the cash market, cattle futures weakened on Wednesday, suggesting traders sense cash prices will eventually soften this week.
Skid halted in cash hog index, pork cutout plunges... The CME lean hog index is up 6 cents to $91.38 as of June 11, ending a four-day skid that dropped prices 74 cents. June hogs, which expire Friday, finished yesterday 64.5 cents above today’s cash quote, while the July contract held a $2.32 premium. The pork cutout fell $4.64 on Wednesday, as bellies plunged $19.02, though loins, ribs and hams were also sharply lower.
Overnight demand news... Taiwan purchased 65,000 MT of corn expected to be sourced from Brazil. Japan purchased 109,126 MT of milling wheat, including 57,126 MT U.S., 24,230 MT Canadian and 27,770 MT Australian. Lebanon purchased 63,000 MT of Ukrainian 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
- 7:30 a.m. Weekly Export Sales — FAS
- 11:00 a.m. Feed Grains Database — ERS
- 2:00 p.m. Dairy Monthly Tables — ERS
- 2:00 p.m. Season Average Price Forecasts — ERS
- 2:00 p.m. Wheat data — ERS