Good morning!
Grains weaker overnight... Corn, soybean and wheat futures faced price pressure during overnight trade coming off Wednesday’s holiday. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents lower, soybeans are 3 to 4 cents lower, and wheat futures are 5 to 6 cents lower. The U.S. dollar index is around 150 points higher and front-month crude oil futures are trading modestly firmer.
U.S. soybean imports by China accelerate in May but still lagging... Of the 10.22 MMT of soybeans China imported during May, 8.80 MMT originated from Brazil with 1.27 MMT coming from the United States. While Brazil remained China’s main soybean supplier, its shipments declined 19% from May 2023, while U.S. arrivals increased 156%. For the first five months of the year, soybean shipments to China from Brazil totaled 24.71 MMT, up 23% from the same period last year, while arrivals from the U.S. fell 34% to 10.85 MMT.
Brazil upholds 18% tariff on U.S. ethanol imports... Brazil’s Foreign Trade Chamber (CAMEX) at the ministry of economy voted to uphold an 18% tariff on ethanol imports from the United States. This decision has drawn criticism from U.S. industry groups, who argue the tariff unfairly disadvantages American ethanol producers in the Brazilian market. The U.S. has previously threatened to impose retaliatory tariffs on Brazilian goods if the ethanol tariff remained in place. Brazil has defended the tariff as a necessary measure to safeguard its domestic ethanol industry and ensure a stable supply of biofuels for its transportation sector.
IKAR raises Russian wheat crop forecast... Russia’s IKAR agricultural consultancy raised its forecast for Russia’s wheat crop by 500,000 MT to 82 MMT.
Exchange increases Argentine wheat planted area estimate... Dryness in northern and eastern Argentina, as well as delayed harvesting of the corn and soy crops, had disrupted wheat planting. But forecast rains will allow wheat seeding to accelerate, according to the Buenos Aires Grain Exchange, which raised its wheat seedings forecast by 100,000 hectares to 6.3 million hectares.
India raises crop support prices... India raised the price at which it will buy new-season common rice paddy from farmers by 5.4% to 2,300 rupees ($27.57) per 100 kg. The increase reflects the rising cost of production, which will encourage farmers to boost production, said the president of the Rice Exporters Association of India. The government also raised support prices for cotton, soybeans, corn, ground nuts and pigeon peas.
Weekly export sales pushed back to Friday... Due to Wednesday’s government holiday, export sales data for the week ended June 13 will be released Friday morning.
BOE keeps rates unchanged... The Bank of England (BOE) kept its key rate at a 16-year high of 5.25%. Two members advocated for a decrease to 5% and some policymakers noted the decision not to cut was “finely balanced.” BOE maintained its forecast for inflation to be around 2.5% in the second half of 2024.
Shifts in China’s monetary policy framework could be coming... The People’s Bank of China left the 1-year loan prime rate (LPR), the benchmark for most corporate and household loans, at 3.45%. The 5-year LPR rate, a reference for property mortgages, was retained at 3.95%. Both rates are at record lows. Financial News, a central bank-backed newspaper, cited unnamed industry experts as saying the central bank should weaken the link between MLF — which represents banks’ financing costs — and the loan prime rate, a benchmark for lending rates to the real economy. Bloomberg reported Pan Gongsheng, a PBOC governor suggested the central bank is looking into trading government bonds in the secondary market as a way to regulate liquidity. Pan also hinted PBOC may consider moving to using a single short-term rate to guide markets and narrowing the corridor within which market rates are allowed to fluctuate to signal a clearer policy target. All these moves aim to refine the technical tools PBOC uses to manage interest rates and money. Many details remain vague, along with any timeline for change.
China may take provisional anti-dumping steps against EU pork imports... China may impose provisional anti-dumping measures on pork imports from the European Union as part of a year-long probe that began on June 17, its commerce ministry said. “If, after a preliminary investigation, it is determined that dumping has been established and has caused injury to domestic industry, provisional anti-dumping measures may be taken,” a commerce ministry spokesperson said, without giving specific details.
Former CDC Director predicts bird flu virus will cause next pandemic... Dr. Robert Redfield, former director of the Centers for Disease Control and Prevention (CDC), issued a grim prediction that the next major pandemic will be caused by bird flu. “It’s not a question of if, it’s more a question of when we will have a bird flu pandemic,” Dr. Redfield told NewsNation. He warned bird flu in humans has a “significant” mortality rate, “probably somewhere between 25% and 50%, so it’s going to be quite complicated.”
Packers actively seeking cattle in northern market... Packers reportedly actively raised cash cattle bids in the northern market in an attempt to obtain supplies, as cattle numbers are tight. So far, feedlots have passed, suggesting there could be another significant increase in the average cash price this week. Cattle supplies are more plentiful in the Southern Plains, so prices won’t be as strong there.
Pork cutout slips... The pork cutout dropped 37 cents on Wednesday, falling for a third straight day, led by a $5.88 decline in primal bellies. Belly prices fell nearly $19.00 over the past three days.
Holiday demand news... Japan purchased 84,667 MT of milling wheat via its weekly tender, including 29,617 U.S., 32,590 MT Canadian and 22,460 MT Australian. Thailand purchased 60,000 MT of Ukrainian feed 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. Extended Weather Outlook — NWS
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Cost-of-Production Forecast — ERS
- 2:00 p.m. Coffee: World Markets and Trade — FAS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Livestock Slaughter — NASS