Good morning!
Firm price tone overnight... Corn, soybeans and wheat were supported by corrective buying and outside markets overnight. As of 6:30 a.m. CT, corn futures are trading 1 to 4 cents higher, soybeans are 3 to 4 cents higher, SRW wheat is 2 to 4 cents higher, HRW wheat is 4 to 5 cents higher and HRS wheat is 4 to 8 cents higher. Front-month crude oil futures are modestly firmer and the U.S. dollar index is around 150 points lower.
Exchange again slashes Argentine crop estimates... The Buenos Aires Grain Exchange slashed its Argentine soybean crop estimate another 4 MMT to 25 MMT. The exchange cut its Argentine corn crop estimate by 1.5 MMT to 36 MMT. The exchange rated the Argentine soybean crop 2% good/excellent (unchanged from the previous week), 23% fair (down four points) and 75% poor/very poor (up four points). It rated the country’s corn crop 7% good/excellent (up two points), 33% fair (down one point) and 60% poor/very poor (up one point).
Length of Black Sea grain deal extension remains unsettled... The United Nations backed Turkey and Ukraine by calling for a 120-day extension of the Black Sea grain export deal. “For us, the text in the agreement is clear and it calls for a 120-day rollover,” UN spokesman Stephane Dujarric told Reuters. But Russian officials say the deal will be extended for 60 days. Alessandra Vellucci, director of the UN Information Service, said negotiations on an extension were continuing.
Russia slightly lowers wheat export tax... Russia’s wheat export tax for March 22-28 will be 5,327.9 rubles ($69.46) per metric ton based on an indicative price of $298.90. That’s down from a rate of 5,344.0 rubles per metric ton the previous week.
Yellen says U.S. banking system ‘sound’... Treasury Secretary Janet Yellen told the Senate Banking panel on Thursday: “I can reassure the members of the committee that our banking system remains sound and that Americans can feel confident that their deposits will be there when they need them. This week’s actions demonstrate our resolute commitment to ensure that depositors’ savings remain safe.” Sen. Mike Crapo (R-Idaho), told Yellen he was concerned about the “precedent of guaranteeing all deposits and market expectations moving forward.” Crapo said he was referring to the U.S. government’s moves over the weekend to back all uninsured deposits at SVB and Signature, citing the dangers of “systemic risk.” Yellen acknowledged that authorities stepped in to backstop even uninsured deposits at insolvent Silicon Valley Bank (SVB) and Signature Bank due to the threat of “systemic risk” — the possibility of unstoppable contagion and panic — that merited exceptions to the FDIC’s $250,000 cap on federally insured deposits. A reported 94% of SVB’s deposit accounts were above the FDIC limit.
China cuts RRR to support economy... China’s central bank said on Friday it would cut the amount of cash banks must hold as reserves for the first time this year to help keep liquidity ample and support an economic recovery. The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points (bps), effective March 27.
Euro zone inflation eases but core prices rise... Consumer price inflation in the 20-country euro zone eased to 8.5% in February from 8.6% a month earlier as a big drop in energy costs was offset by a price surge in nearly all other areas. Core inflation, excluding energy and unprocessed food costs, rose 7.4% annually, up from 7.1% in January.
Indonesia pledges policy transparency with new palm oil exchange... Indonesia’s plan to channel crude palm oil (CPO) exports via a futures exchange would improve policymaking in the top producer and avoid a need for the type of export ban that sent shockwaves through global markets last year, its chief regulator said. Authorities aim to require all CPO exports to go through a futures exchange starting in June in order to create Indonesia’s own benchmark price. “The main goal of having an exchange is transparency and good governance. When it is transparent, the government can utilize the data for policy-making,” Didid Noordiatmoko, head of commodity futures regulator Bappebti said.
ITC to proceed with review of CVD, antidumping duties on Canadian softwood lumber... The U.S. International Trade Commission (ITC) will proceed with full reviews on whether revoking the countervailing duty (CVD) and antidumping duty order on imports of softwood lumber products from Canada would likely lead to a continuation or a recurrence of material injury to the U.S. industry. ITC said in a notice in today’s Federal Register it based the decision on information from the U.S. and Canadian industries. A schedule for the reviews will follow.
Cattle on Feed Report out this afternoon... Traders expect USDA’s Cattle on Feed Report this afternoon will show the feedlot inventory down 4.5% from year-ago to 11.62 million head. That would be the smallest March 1 inventory since 2017 when supplies were building. February placements are expected to be down 6.0% with marketings 4.4% lower than year-ago levels.
Wholesale pork price continue to drop... The pork cutout value fell another $1.89 on Thursday to $84.49, the lowest level since the end of February. Movement improved to 352.2 load, but the recent price drop suggests packers are having to cut wholesale prices to attract retailer demand. Meanwhile, the cash hog index continues its slow-and-steady climb. The CME lean hog index is up 2 cents to $79.97 (as of March 15), the highest level since Dec. 30.
Overnight demand news... Egypt purchased 120,000 MT of Ukrainian 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
- 2:00 p.m. Cattle on Feed — NASS
- 2:00 p.m. Honey — NASS
- 2:00 p.m. Hop Stocks — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC