Good morning!
Corn weaker, beans mixed and wheat mostly firmer this morning... Corn faced mild followthrough selling overnight, while soybeans traded on both sides of unchanged and wheat firmed after earlier pressure. As of 6:30 a.m. CT, corn futures are trading 1 to 4 cents lower, soybeans are 3 cents lower to 2 cents higher, SRW wheat futures are 4 to 5 cents higher, HRW wheat is 6 to 7 cents higher and spring wheat is 4 to 10 cents higher. Front-month crude oil futures are around 60 cents higher and the U.S. dollar index is nearly 300 points lower this morning.
Weekly Export Sales Report out this morning... For the week ended June 1, traders expect:
| 2022-23 expectations (in MT) | 2022-23 last week | 2023-24 expectations (in MT) | 2023-24 last week |
Corn | (100,000)-600,000 | 186,695 | 100,000-400,000 | 312,648 |
Wheat | (150,000)-50,000 | (210,472) | 200,000-550,000 | 466,537 |
Soybeans | (100,000)-300,000 | 123,396 | 50,000-400,000 | 301,000 |
Soymeal | 150,000-500,000 | 405,358 | 0-100,000 | 61,902 |
Soyoil | 0-10,000 | 1,729 | 0-10,000 | 3,200 |
Kremlin: Ammonia pipeline blast a negative for Black Sea grain deal... The Kremlin said a blast on the Togliatti-Odesa ammonia pipeline was a complicating factor that could “only have a negative impact.” Kremlin spokesperson Dmitry Peskov reiterated Russia’s position that a resumption of the pipeline was an integral part of the Black Sea grain deal. Russia’s foreign ministry on Wednesday it likely would take between one and three months to repair the damaged section of the pipeline, though Russian officials say they do not have access to that area and don’t expect that to change.
Euro zone slips into recession in Q1... Euro zone gross domestic product (GDP) contracted 0.1% in the first quarter, down from an initial estimate of 0.1 growth, due mostly to a downward adjustment to Germany’s economy. Euro zone GDP for the fourth quarter of 2022 was also cut to -0.1% from a previous reading of zero. The revisions confirmed the euro zone was in a technical recession with consecutive quarters of negative growth.
China’s big banks make more cuts to deposit rates... China’s “big four” state-run banks lowered interest rates on yuan deposits, in actions that could ease pressure on profit margins and reduce lending costs, providing some relief for the financial sector and wider economy. The banks cut rates on demand deposits by 5 basis points and three-year and five-year time deposits by 15 basis points. On Tuesday, the banks cut U.S. dollar deposit rates.
Indonesia, Malaysia to fight ‘discrimination’ against palm oil... Indonesian President Joko Widodo called for better collaboration with Malaysia to fight what he called “discrimination” against their palm oil products, as a new European Union law threatens to dent exports of the commodity. The EU passed a law this year banning imports of commodities linked to deforestation, a move that is expected to hurt palm oil. In a joint statement, the leaders of the two countries vowed to cooperate closely to address the EU’s “highly detrimental discriminatory measures against palm oil.” They said the EU needs to promptly work towards a fair and equitable resolution. Both countries also have agreed to establish a framework for protecting migrant workers’ rights.
Former RMA administrator says agency needs more funding... In a Senate Budget Committee hearing titled “Cultivating Stewardship: Examining the Changing Agricultural Landscape,” Brandon Willis, a former administrator of the USDA’s Risk Management Agency (RMA), advocated for increased funding for the agency. Willis, who is currently an assistant professor at Utah State University and runs an insurance agency, highlighted the importance of hiring and retaining skilled staff to manage the complex insurance products offered by the Federal Crop Insurance Program, now USDA’s second-largest program. Willis praised the team overseeing the program but emphasized that stagnant funding might make it difficult for RMA to ensure proper oversight and adapt to climate-related challenges. He argued that investing more in the agency would be a wiser decision, as it could help prevent the need for ad hoc disaster interventions by Congress, ultimately saving both time and money.
NPPC lays out priorities for pork industry... The National Pork Producers Council (NPPC) held a policy panel at the 2023 World Pork Expo to discuss critical priorities for the pork industry, which include advocating for public policy, expanding exports and protecting animals from foreign diseases. Key topics discussed were the prevention of foreign animal diseases, addressing the agricultural labor shortage, and increasing pork exports. NPPC emphasized the importance of renewing farm bill programs to manage foreign animal disease risks and protect the U.S. pig herd. Dr. Anna Forseth talked about progress on six priorities for foreign animal disease preparedness, including state and federal response coordination and international trade.
Cattle futures fall despite sharply higher cash trade... Cash cattle traded $4 to $10 higher so far this week, marking new all-time highs. Despite the bullish cash trade and discounts to the cash market, futures faced corrective selling on Wednesday. That suggests a top in the market, though how deep the pullback will be could depend largely on price action the remainder of the week. Until the cash market signals it has topped, the downside should be relatively limited for futures.
Seasonal cash hog rally gaining steam... The CME lean hog index jumped $1.18 to $83.04 (as of June 6). That’s the biggest daily increase since late December. June lean hog futures, which expire on June 14 and will be cash settled two days later, finished yesterday $4.66 above today’s cash quote. July hogs finished $3.885 above the cash index.
Overnight demand news... South Korea purchased a total of 198,000 MT of corn – 132,000 MT to be sourced from South America and 66,000 MT expected to be sourced from South America or South Africa. Japan purchased 86,922 MT of milling wheat, 55,159 Canadian and 31,763 MT Australian. Tunisia tendered to buy 100,000 MT of optional origin soft 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
- 7:30 a.m. Weekly Export Sales — FAS
- 10:00 a.m. Livestock and Meat International Trade Data — ERS