Good morning!
Grains mixed in quiet overnight trade... Corn, soybeans and wheat held in relatively tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are fractionally lower to 2 cents higher, winter wheat markets are unchanged to a penny lower in most contracts, while spring wheat is 2 to 4 cents higher. The U.S. dollar index is around 275 points higher and front-month crude oil futures are modestly firmer.
Argentina farmer soybean sales nearly double in May but still slow overall... Soybean sales in Argentina nearly doubled in May from the previous month, the government said, due to drier conditions and improving international prices. Sales reached 5.33 MMT in May, up 90% from April, according to Argentina’s bioeconomy secretariat. Year-to-date, however, producers have sold 39% of this year’s estimates 49.7 MMT production – the slowest pace in nine years.
Ukraine’s waterborne ag exports total 5.9 MMT in May... Ukraine’s overall waterborne ag exports totaled 5.9 MMT in May, including 5.1 MMT shipped through its Black Sea ports and 800,000 MT sent via the River Danube, according to Spike Brokers, which tracks and publishes export statistics. That would be down from maritime ag exports of 6.5 MMT in April, based on UGA traders union data. UGA noted in May Ukraine exports via seaports and land included 3.6 MMT of corn, 1.65 MMT of wheat, 624,000 MT of sunflower oil, 209,000 MT of barley and 107,000 MT of soybeans. Ukraine’s ag ministry said 2023-24 grain exports reached 47.4 MMT as of June 5, up from 45.6 MMT during the same period last year.
Sinograin to increase wheat stockpiles... China’s state-owned agricultural stockpiler Sinograin said it will increase domestic wheat purchases in major production areas as it looks to secure supplies amid recent weather-related damage to global producers. Beijing expanded its budget to stockpile grains and edible oils by 8.1% and implemented its first food security law aimed at achieving “absolute self-sufficiency” in staple grains. Sinograin in January said it would raise its purchases of domestic corn.
Global trade imbalances worsen as China’s surplus soars... China’s export boom extends beyond high-tech industries targeted by the West, creating potential backlash from countries previously neutral in trade conflicts, Bloomberg reports. China’s manufacturing trade surplus is nearing record highs, reflecting a broader surge in exports. This includes green-energy goods, steel, animal feed and more, as domestic demand weakens due to a real estate slump slowing the economy. Of note: Chinese solar firms are halting production at Southeast Asian factories as increased U.S. trade barriers create uncertainty for exports from the region.
China to establish carbon footprint management system by 2027... China aims to establish an initial carbon footprint management system by 2027 and to release calculation standards for around 200 major products by 2030. Beijing will prioritize the calculation standard releases for products including coal, steel, natural gas, aluminum, lithium battery and new energy vehicles, according to a plan issued by the environmental ministry.
Asia, Mideast dominate port performance rankings... Global container ports got a breather in 2023 as the pandemic’s hit to supply chains eased and trade volumes stabilized after a few turbulent years. But even in a so-called normal year, labor issues, extreme weather and attacks on vessels near Yemen complicated operations at marine gateways all over the world, Bloomberg reports. Developed by the World Bank and S&P Global Market Intelligence, the latest Container Port Performance Index ranked more than 400 cargo hubs based on vessel time in port. The top two spots held steady for a second year — China’s Yangshan Port in first followed by Oman’s Port of Salalah. Colombia’s Cartagena climbed to third place, Morocco’s Tanger-Med held onto fourth place and Malaysia’s Tanjung Pelepas wound up in fifth. The highest-ranking U.S. port was South Carolina’s Charleston at No. 53. Finishing near the end of the pack were the busiest ports in the U.S. — Long Beach and Los Angeles.
Euro zone PMI hits one-year high, producer prices continue to ease... The HCOB euro zone composite purchasing managers index (PMI) compiled by S&P Global was slightly revised down to 52.2 in May from the preliminary estimate of 52.3. However, that was up from 51.7 in April and the strongest figure since May 2023. Stronger demand boosted output and hiring, while business confidence improved for the seventh time in eight months. Meanwhile, producer prices in the euro zone declined 5.7% annually in April, the 12th straight month of annual producer deflation. Excluding energy, producer prices fell 1%.
Wholesale beef market remains strong... Wholesale beef prices extended recent gains with Choice firming $1.28 and Select up 77 cents on Tuesday. Despite strengthening prices, movement improved to 143 loads, signaling strong retailer demand. Given the wholesale beef strength, some packer margins have turned positive, which could limit expected pressure on cash cattle prices this week.
Hog premiums dwindle... The CME lean hog index is up 20 cents to $91.93 as of June 3. As of Tuesday’s close, the premium June lean hog futures held to today’s cash quote dwindled to 77 cents. July lean hog futures held only a $1.62 premium to the cash index.
Overnight demand news... Algeria purchased between 810,000 and 840,000 MT of optional origin milling wheat, with the majority expected to be sourced from Black Sea region countries. Egypt purchased 470,000 MT of wheat, including 180,000 MT Romanian, 120,000 MT French, 120,000 MT Ukrainian and 50,000 MT Bulgarian. Jordan tendered to buy 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Dairy Products — NASS