Good morning!
Varied tone in quiet overnight grain trade... Soybeans mildly firmed overnight, while corn and wheat failed to stray far from unchanged in two-sided trade. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny lower, soybeans are 3 to 7 cents higher and wheat futures are within a penny of either side of unchanged. The U.S. dollar index is down more than 200 points and front-month crude oil futures are around 25 cents higher.
Wet weather continues across northern Corn Belt... Flooding resulted in some areas of the western and northern Corn Belt over the weekend due to excessive rains. An active jet stream with no potential for a blocking pattern is expected through the next 10 days and probably two weeks, according to World Weather Inc. That will bring more precip to saturated locations, but also allow some timely lighter rains to move into dry southern and eastern areas of the Corn Belt, Delta and Southeast. The Southern Plains will be mostly dry during the next 10 days. Russia’s New Lands and Southern Region will be cooler during the next 10 days, with some needed showers likely.
India mulls reducing wheat import duty to tame rising prices... India is considering cutting duties on wheat imports to keep prices in check as supplies tighten. Currently, India taxes wheat imports at a 40% rate. India has already imposed limits on wheat stocks held by wholesalers to 3,000 MT and 10 MT for retailers. These limits will remain in place until the end of March, and traders have been given 30 days to bring their stocks to permissible levels.
The week ahead in Washington... Thursday’s debate between President Joe Biden and former President Donald Trump is shaping up to be a pivotal moment in the 2024 presidential election. The House is in this week while the Senate is out. Both chambers are out next week for the July 4 holiday and return the week of July 8. The economic focus will be Thursday’s second estimate of first quarter GDP and Friday’s personal consumption expenditures price index, the Fed’s preferred inflation gauge. It’s a big week for agricultural reports, with USDA’s Hogs & Pigs Report on Thursday and the Acreage and Grain Stocks Reports on Friday.
House floor action on new farm bill could come in September... House GOP leaders have outlined an ambitious schedule for passing their version of the fiscal year (FY) 2025 spending bills. They aim to have all 12 annual bills out of the Appropriations Committee by mid-July and through the House by the start of the August recess. Three key bills — Defense, Homeland Security and State-Foreign Operations — are set to be marked up in the Rules Committee on Tuesday, with floor votes expected later in the week. GOP leaders are confident that all three bills will pass. If the House GOP schedule of action is realized, that sets up September as a possibility for House floor action on the House Ag Committee-passed farm bill.
China presses EU to scrap tariffs on EVs... Beijing wants the EU to scrap its plans for preliminary tariffs on Chinese electric vehicles (EVs) before they kick in July 4, China’s state-controlled Global Times reported, after both sides agreed to hold new trade talks. Provisional EU duties of up to 38.1% on imported Chinese-made EVs are set to start July 4 while the bloc investigates what it says are excessive and unfair subsidies. Beijing has repeatedly called on the EU to cancel its tariffs, expressing a willingness to negotiate.
China imposes more fertilizer export controls... China is further restricting fertilizer exports, as it seeks to contain domestic prices, cut farming costs and bolster grain security. Curbs imposed earlier this month apply to urea and phosphates, people familiar with the matter told Bloomberg. Exports of urea and phosphates had already slowed this year, to a trickle in the case of the former, after limits put in place at the end of 2023. Now, urea shipments have been halted entirely, the people said. For phosphates, customs is stepping up inspections on outbound cargoes, which could reduce sales even more. China’s total fertilizer exports actually climbed to a six-month high of nearly 2.5 MMT in May, as sales of ammonium sulfate offset the drop in the other products.
China’s fiscal income drops at quickest pace in more than a year... China’s fiscal revenue shrank at the fastest pace in more than a year, fueling expectations that the government could make another rare mid-year budget revision. Total revenues, which include the general public budget and the government funds budget, fell 4.1% during January-May from last year to 11.36 trillion yuan ($1.6 trillion). That’s the steepest drop since February 2023, according to Bloomberg calculations. The combined spending under the two accounts fell 2.2% from year-ago to 13.61 trillion yuan in the first five months. That left a fiscal shortfall of 2.25 trillion yuan, widening from January-May last year but below the level recorded during the same period in 2022.
More H5N1 cases in northwest Iowa dairies... The Iowa Department of Agriculture announced the detection of H5N1 in two more dairies in Sioux County, the 11th outbreaks in the state. Total cases in Sioux County now stand at nine, with singular outbreaks also found in O’Brien and Plymouth counties. Iowa Secretary of Agriculture Mike Naig has encouraged dairy farmers to test their cows if they suspect infection, especially if they observe reduced milk production or sick animals. He emphasized that increased testing would provide more information to the industry about the spread of the disease. USDA has emphasized the need for enhanced biosecurity practices among poultry producers and dairy farmers to protect their herds. A federal epidemiological team is currently conducting research in Iowa to determine the cause of the spread and aid in disease response efforts.
Cattle on Feed Report slightly negative compared to expectations... USDA estimated there were 11.583 million head of cattle in large feedlots (1,000-plus) as of June 1, down 7,000 head (0.1%) from year-ago but 152,000 head more than the average pre-report estimate implied. May placements topped year-ago by 4.3%, whereas traders expected a 1.5% decline. Marketings increased 0.2% from last year, slightly less than expected. The data is mildly negative compared to the pre-report estimates, but not enough to have a major market impact.
Cash hog index continues recent slide, pork cutout firms... The CME lean hog index is down 23 cents to $90.32 as of June 21, marking declines in five of the last six days totaling a net $1.26. The pork cutout firmed $1.18 on Friday to $99.03, despite sharp losses in ribs and bellies as all other cuts strengthened.
Weekend demand news... South Korea purchased 66,000 MT of corn expected to be sourced from South America or South Africa. Egypt tendered to buy 30,000 MT of soyoil from multiple origins.
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. Chickens and Eggs — NASS
- 2:00 p.m. Poultry Slaughter — NASS
- 3:00 p.m. Crop Progress — NASS