Good morning!
Mostly weaker tone this morning... After trading higher earlier in the overnight session, corn, soybeans and wheat have turned mostly lower early this morning. As of 6:30 a.m. CT, corn futures are trading steady to 2 cents lower, soybeans are 6 to 8 cents lower, winter wheat futures are 1 to 3 cents lower and spring wheat is fractionally to 6 cents higher. Front-month crude oil futures are around $1 lower and the U.S. dollar index is nearly 1,000 points higher.
Banking concerns spread to Europe... There are concerns the banking turmoil that started in the U.S. is spreading in Europe. European banking stocks are taking a hit today, led by Credit Suisse and worries about its financial health. Credit Suisse shares dropped by as much as 10.5% to a new record low, as its largest investor said it couldn’t give the Swiss bank more financial assistance. Meanwhile, multiple U.S. officials and agencies are investigating Silicon Valley Bank’s collapse.
Russia/U.S. flap... A Russian fighter jet hit a U.S. surveillance drone in international airspace above the Black Sea, forcing the device to crash, the U.S. said. The Su-27 struck the propeller of the MQ-9 Reaper drone in an “unsafe and unprofessional” intercept. Russia’s Defense Ministry denied the claim, saying the drone’s transponders were off, and it flew out of control and crashed. Russia’s ambassador to America called for the end of “hostile” flights near his country’s border.
NOPA crush expected to decline from January but rise from year-ago... Members of the National Oilseed Processors Association (NOPA) are expected to report soybean crush totaled 166.1 million bu. in February. That would be down from 179.0 million bu. in January but up from 165.1 million bu. in February 2022. Soyoil stocks are expected to be reported at 1.829 billion pounds.
China’s economy showing signs of recovery... China’s economic activity picked up in the first two months of 2023 as industrial output and retail sales strengthened. Industrial output in the January-February period was 2.4% higher than a year earlier, up from a 1.3% rise in December. Retail sales in the first two months jumped 3.5% from a year before, reversing a 1.8% annual fall seen in December. Also, fixed asset investment in the first two months was 5.5% higher than a year before, growing a little faster than the 5.1% annual rise for all of 2022. But two of its components moved in opposite directions. Infrastructure investment in the two months surged 9.0% from a year before, driven by government spending aimed at supporting the economy. But property investment was still down 5.7%, reflecting the caution of home buyers and developers.
PBOC ramps up fund injections into banking system... The People’s Bank of China (PBOC) injected 481 billion yuan ($69.7 billion) via a one-year medium-term lending facility (MLF) to some financial institutions and left the interest rate unchanged at 2.75%. With 200 billion yuan of MLF loans set to expire this month, the operation resulted in a net 281 billion yuan of fresh fund injection into the banking system. The central bank also pumped 104 billion yuan through seven-day reverse repos while keeping borrowing cost unchanged at 2%.
China to continue wheat sales... China will auction another 140,000 MT of state-owned wheat reserves on March 22. China has regularly been selling state-owned wheat reserves into the domestic market since last October.
Malaysian groups file petition opposing EU deforestation law... A group of Malaysian palm oil farmers and rubber smallholders on Wednesday filed a petition to the European Union to protest against a new law preventing imports into the bloc of commodities linked to deforestation risks. “The regulation’s unilateral and unrealistic demands on traceability and geolocation will prevent small farmers from accessing the European market,” a group of six associations said in a joint statement. The groups submitted the petition to the EU delegation in Kuala Lumpur, calling on its leaders to review the deforestation regulation and “recognize the harm” it would cause farmers.
China battling new surge in ASF... A surge in African swine fever (ASF) infections in China is set to reduce hog output later this year, farm managers and analysts said. Infections this year began to surge around the Lunar New Year holiday, three managers at pig farming companies and analysts told Reuters. “Data from swine fever virus testing companies show that the number of positive detections exploded after the new year holiday. The order of magnitude in a single month has reached the level of the whole year of 2022,” said analysts at Huachuang Securities in a report on Monday. “We guess that the current swine fever infection area in northern production areas may be reaching 50%,” it added. The disease outbreaks, as well as the prior herd reductions, will lead to fewer hogs reaching market when demand improves in the second half of the year, said the Huachuang report.
Tyson to shutter two poultry plants... Tyson Foods Inc. plans to shut down two of its poultry plants and lay off nearly 1,700 workers as it tries to improve its chicken operations. The company produces about one-fifth of the U.S. poultry meat supply.
Wholesale beef prices strengthen... Wholesale beef prices firmed on Tuesday, with Choice up $1.05 and Select 94 cents higher. While movement totaled only 91 loads on the day, the price strength is important as it will keep packer margins solidly in the black despite the continued rise in cash prices. That gives packers incentive to keep actively competing for tightening market-ready supplies.
Wholesale pork prices slip but movement improves... The pork cutout value dropped 43 cents on Tuesday as losses in loins, butts and hams more than offset gains in ribs, bellies and picnics. But movement improved to 337.3 loads amid the lower prices, signaling there’s still solid retailer buyer interest under the market.
Overnight demand news... Jordan tendered to buy up to 120,000 MT of option 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
- 11:00 a.m. Monthly Soy Crush — NOPA
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Turkey Hatchery — NASS