Good morning!
Wheat leads overnight price declines... Winter wheat futures faced moderate to heavy selling pressure overnight, while milder losses were posted in corn, soybeans and spring wheat. As of 6:30 a.m. CT, corn futures are trading a penny lower, soybeans are 4 to 7 cents lower, SRW wheat is mostly 8 to 11 cents lower, HRW wheat is 12 to 14 cents lower and HRS wheat is mostly a nickel lower. The U.S. dollar index is trading just below unchanged and front-month crude oil futures are around 50 cents higher.
China’s May soybean imports drop sharply from year-ago... China imported 10.22 MMT of soybeans during May, up 19.3% from April but down 15.0% from last year’s record of 12.02 MMT. Through the first five months of this year, China imported 37.37 MMT of soybeans, down 5.4% from the same period last year.
China to remain reliant on U.S. soybeans and sorghum despite self-sufficiency push... State-run China Daily reports despite ambitions for enhanced food self-sufficiency, China is projected to continue relying heavily on U.S. imports of soybeans and sorghum for decades to come. The Chinese Academy of Agricultural Sciences (CAAS) forecasts that by 2050, China will still depend on the U.S. for approximately 39% of its soybeans and 60% of its sorghum. To meet the evolving demands of its population, CAAS projects China will need to significantly increase production of key food groups. By 2035, production is expected to rise by 29.64 MMT for meat, 6.13 MMT for eggs, 9.58 MMT for dairy products and 19 MMT for aquatic products. These figures are expected to climb further by 2050. This projected growth will increase animal feed demand.
Mixed China trade data... China’s export rose 7.6% from year-ago to $302.35 billion in May, up sharply from a 1.5% increase the previous month and the strongest pace in four months. Imports increased 1.8% to $219.73 billion in May, though that was down sharply from April’s 8.4% rise. While favorable global demand is likely to sustain export growth, it may not fully compensate for weak domestic demand, as highlighted by lower-than-expected import figure. China had a trade surplus of $82.62 billion in May, up from $72.35 billion the previous month. For the first five months of the year, the country recorded a surplus of $337.21 billion, with exports rising 2.7% to $1.40 trillion while imports advanced 2.9% to $1.06 trillion. The trade surplus with the U.S. climbed to $30.81 billion in May and stood at $128.2 billion through the first five months of this year.
Turkey halts wheat imports until mid-October... Turkey will halt wheat imports from June 21 until at least Oct. 15 to protect producers from price fluctuations, ensure domestic procurement and create a favorable market for producers, the country’s ag ministry said. The import ban could be extended beyond Oct. 15 depending on “market conditions on that date,” the ministry added. Turkey imports virtually no U.S. wheat, but this will impact trade flows around the world.
Russia starts wheat shipments to Brazil from Baltic terminal... Russia has started wheat shipments to Brazil from Vysotsky Port on the Baltic Sea, the quality inspection arm of Russia’s agricultural watchdog said. Shipments from the Baltic are intended to relieve pressure on grain terminals on the Azov and Black Seas, which are operating at maximum capacity amid record exports this season. The planned capacity of the grain terminal at Vysotsky Port is 4 MMT per year.
French wheat crop ratings inch up... France’s ag ministry rated the country’s soft wheat crop as 62% good or excellent as of June 3, up one percentage point from the previous week. That was still the lowest rating for the date since 2020.
FAO food price index rises in May... The UN Food and Agriculture Organization global food price index inched up 0.9% in May, the third straight monthly rise, as increases in the prices of cereal grains and dairy products more than offset declines in sugar and vegoils while meat prices were nearly unchanged. The May index was still down 3.4% from last year. Compared to year-ago, prices declined 1.3% for meat, 8.2% for cereal grains and 25.5% for sugar, while dairy prices rose 3.5% and vegoils increased 7.7%.
Slight uptick in non-farm payrolls expected... Economists polled by Reuters expect the Labor Department to report non-farm payrolls increased 185,000 in May, which would be up from 175,000 jobs added the previous month. The unemployment rate is expected to hold at 3.9%.
Euro zone Q1 GDP grows marginally... Economic growth in the euro zone in the first quarter expanded 0.3% on a quarterly basis and 0.4% from year-ago, gaining traction following two quarters of 0.2% annual growth. The quarterly increase was the strongest since the third quarter of 2022, with net trade making the largest upward contribution.
China’s meat imports increase in May... China imported 557,000 MT of meat in May, up 2.4% from April but down 6.7% from last year. Through the first five months of this year, China imported 2.78 MMT of meat, down 11.5% from the same period last year.
Still waiting for active cash cattle trade... Cash cattle negotiations remained in a standoff Thursday, as packers worked to buy cattle at lower prices while feedlots still had hopes of steady bids. With nearby live cattle futures trading sharply below the cash market, the eventual outcome of this week’s cash battle won’t likely have much impact unless prices surprisingly rise.
Cash hog index, pork cutout remain near recent levels... The CME lean hog index is down 14 cents to $91.92 as of June 5, remaining in the recent low-$90.00 range. The pork cutout value firmed 38 cents on Thursday, remaining tethered near $100.00.
Overnight demand news... South Korea purchased 68,000 MT of corn expected to be sourced from South America or South Africa.
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. Livestock and Meat International Trade Data — ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC