Good morning!
Grains mildly firmer overnight... Corn, soybeans and wheat posted mild corrective gains overnight amid light short-covering ahead of USDA’s reports later this morning. As of 6:30 a.m. CT, corn futures are trading mostly a penny higher, soybeans are 5 to 6 cents higher and wheat futures are 3 to 6 cents higher. The U.S. dollar index and front-month crude oil futures are both modestly firmer this morning.
Key acreage, grain stocks data out this morning... USDA will release its Acreage and Grains Stocks Reports at 11:00 a.m. CT. The Acreage Report will feature planted and harvested acreage estimates for principal crops, with markets primarily focused on corn, soybeans, wheat and cotton. Because of the timing of NASS’ survey work, the data won’t account for recent flooding in areas of the northwestern Corn Belt. While the acreage estimates will draw a lot of attention, quarterly stocks data has a history of producing major surprises, especially for corn, leading to big post-report price moves. Click here to view the pre-report estimates.
Argentine oilseed union strikes over labor reform bill... Argentine oilseed crushers workers union SOEA started striking Thursday in protest of President Javier Milei’s proposed economic and labor reform bill that was being voted on and eventually passed Argentina’s Congress. It is uncertain how long the strike will last. The CIARA-CEC chamber of oilseed producers and grain exporters questioned the legality of what it called an “unplanned” strike.
Ukraine’s grain exports top 50 MMT... With just two days left in the 2023-24 marketing year, Ukraine’s grain exports reached 50.6 MMT as of June 28, according to ag ministry data, up from around 49 MMT last year. That included 29.2 MMT of corn, 18.3 MMT of wheat and 2.5 MMT of barley.
France’s wheat crop ratings decline... France’s ag ministry rated the country’s wheat crop as 60% good or excellent as of June 24, down two percentage points from the previous week. That remains the lowest rating for the date since 2020.
China passes rural collective law to protect farmers’ land rights... China passed a law on Friday to better protect farmers’ land rights and support the development of village collectives, aiming to bolster the country’s ailing rural economy and achieve food security, state media reported. The new Rural Collective Economic Organizations Law, which will take effect on May 1, 2025, defines the role of rural collectives and will give farmers oversight of them. It aims to safeguard the rights of the collective and its members and encourages fiscal and taxation measures to strengthen the development of the rural collective economy, Xinhua reported. Currently, farm villagers can in theory decide to apply to sell or develop land, but in practice, state officials usually decide as all farmland in China is state-owned.
UK economy expands in Q1... The British economy grew 0.7% from the previous quarter during the first three months of 2024 and 0.3% annually – both slightly higher than initial estimates. The quarterly growth was the strongest expansion in more than two years, ending a brief recession during the second half of 2023.
Yen keeps falling, Japan on intervention watch... The yen weakened to more than 161 per dollar for the first time since 1986, raising speculation Japanese officials would soon intervene to support the ailing currency. Japan’s Finance Minister Shunichi Suzuki said he was deeply concerned about the impact of rapid and one-sided currency moves on the economy, and that the government was watching market developments with a high sense of urgency. Japan spent a record ¥9.8 trillion ($61 billion) during its last round of interventions, which appear to have taken place on April 29 and May 1. Japan spent 0 yen on currency intervention between May 30 and June 26, the Ministry of Finance announced.
Iowa reports two more H5N1 cases in dairy herds... Iowa’s Department of Agriculture said two more dairy farms in Sioux County have confirmed cases of the H5N1 virus. To date, Iowa has confirmed 13 cases of the virus in dairy herds.
Negative H&P Report... USDA’s Hogs & Pigs Report estimated the June 1 U.S. hog herd at 74.486 million head, up 935,000 head (1.3%) from year-ago and 347,000 head than the average pre-report estimate implied. The breeding herd declined 198,000 head (3.2%) to 6.008 million head, but the market hog inventory increased 1.134 million head (1.7%) to 68.479 million head. The report data was negative compared to pre-report expectations, especially the market hog inventories. That will likely pressure lean hog futures, though they have been beaten down, so some (most) of that could already be factored into the market.
Bullish cash cattle momentum building... Cash cattle trade remained limited Thursday, though packer interest built, suggesting higher cash prices could be seen again this week. So far, limited cash trade has occurred at steady/firmer levels within a wide price range.
Cash hog fundamentals weaken... The uptick in the CME lean hog index and pork cutout proved to be temporary, as both resumed their recent downturns after one day of gains. The CME lean hog is down 17 cents to $89.75 as of June 26, the lowest level since April 9. The pork cutout fell 62 cents on Thursday to $94.90, the lowest since March 29.
Overnight demand news... Exporters reported no tenders or sales.
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
- 11:00 a.m. Acreage — NASS
- 11:00 a.m. Grain Stocks — NASS
- 11:00 a.m. Rice Stocks — NASS
- 2:00 p.m. Agricultural Prices — NASS
- 2:00 p.m. Agriculture Census Operators by Race — NASS
- 2:00 p.m. Egg Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC