Good morning!
Soybeans lead overnight price pressure... Soybean futures posted sharp losses overnight, while corn and wheat traded mildly lower. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are 10 to 13 cents lower, winter wheat markets are 3 to 4 cents lower and spring wheat is steady to a penny lower. Front-month crude oil futures are trading just above unchanged and the U.S. dollar index is nearly 1,000 points higher.
EU plans to hit Russia, Belarus grain imports with tariffs... The European Commission proposed on Friday imposing tariffs of 95 euros ($102.76) per metric ton for grains and 50% for oilseeds on imports from Russia and Belarus in an attempt to prevent Moscow and its ally from distorting EU markets and placate farmers who have protested for months over cheap imports. The commission said the tariffs were also designed to limit Russia’s ability to fund its war in Ukraine and to curb its sales of grain stolen from Ukraine. The commission said that, with tariffs, transit of grain through the bloc to other countries would still be allowed as would financing, insurance, storage and transport of such shipments. The Kremlin emphasized the necessity for experts to assess whether Russia or the EU would suffer negative consequences from the proposed restrictions.
Border tensions... Mexico is cautioning a federal U.S. court about potential significant tensions between the two countries if a contentious Texas immigration law is allowed to take effect. Senate Bill 4, signed by Republican Gov. Greg Abbott, criminalizes illegal entry into Texas and grants state officials authority to order immigrants’ deportation, a realm typically under federal jurisdiction. Mexico’s legal representatives argue that enforcing SB 4 would infringe upon Mexico’s sovereignty, disrupt collaboration on migration and border management, and impede U.S./Mexico trade.
Upper Midwest shipping season opens... On March 17, a tow with 12 barges moved through Lock and Dam 2 in Hastings, Minnesota, opening the Upper Mississippi River to shipping after its cyclic winter shutdown. This year, the unusually warm weather prompted the U.S. Army Corps of Engineers to cancel the annual Lake Pepin survey in February. Despite the warm weather, the locks remained closed for winter maintenance, which was completed March 15.
Ag and biofuel sectors await update to GREET model for SAF credit... At Commodity Classic two weeks ago, EPA Administrator Michael Regan and USDA Secretary Tom Vilsack at Commodity Classic pulled back from a prior commitment to announce sustainable aviation fuel (SAF) tax credit details “by March 1.” Vilsack at that time said it would be “weeks, not months” before details were released. It’s been weeks. Vilsack made some comments on the topic yesterday during a House Ag Appropriations hearing. Vilsack said “there are two tax credits that are involved here at 40B and 45Z. Critically, we want to make sure the signals are properly sent on 40B, so first and foremost was getting an acknowledgment and appreciation for the use of the GREET model, which we’ve been able to accomplish. And now is making sure that the Treasury Department and others are fully aware of what steps farmers do in fact take to be more sustainable in the production of corn, soybeans as a feedstock for sustainable aviation fuel. I’m confident that there’s a recognition that no till cover crops, energy efficient fertilizer are the kinds of things that ought to be included as factors to calculate whether or not a particular sustainable aviation fuel meets the threshold of more than 50% improvement. So, I’m confident we’re going to send the right signal. And then I think there is an opportunity for a much broader conversation on 45Z, to see whether or not there are other aspects of climate smart agriculture or sustainable agriculture that ought to be considered. I think the right signal is going to be sent. I think there’s a recognition that farmers are going to play an integral role in the development of this fuel.” Click here to see other details from Vilsack’s comments regarding USDA’s fiscal year 2025 budget request.
Risks to energy transition a focus during CERAWeek... Inefficient infrastructure permitting the was the dominant theme during this week’s CERAWeek conference in Houston. From oil and biofuel pipelines to wind farms and critical metal mines, the country’s energy transition is at risk of stalling without a better permitting system.
Biden’s EV push faces political, legal and market hurdles... The Biden administration introduced new regulations aimed at accelerating the transition to electric vehicles (EVs) in the U.S., with plans for a majority of new cars and light trucks to be electric or hybrid by 2032. However, several challenges threaten to hinder the ambitious plan, the New York Times reports. Despite these obstacles, the article notes there are reasons for optimism. Carmakers are expected to introduce more affordable and high-performing EV models in the coming years, while efforts to standardize charging infrastructure and private investments in network expansion could improve accessibility. However, the success of the EPA rule hinges on overcoming these challenges and navigating potential legal and political opposition.
Big jump expected in February cattle placements... USDA’s Cattle on Feed Report this afternoon is expected to show the March 1 feedlot inventory up 0.9% from year-ago at 11.755 million head. That would be the sixth straight month of year-over-year increases in feedlot numbers. After a sharp drop in the number of calves moved into feedlots in January, placements last month are expected to have jumped 6.4% from last year. Marketings are expected to be up 3.8%. The extra day for leap year likely helped inflate both placements and marketings.
Cash cattle trade higher... Cash cattle trade was active in the $188.00 to $190.00 range in the Plains on Thursday, with the highest prices in the northern market. It appears this week’s cash cattle activity will top the all-time high of $188.75 posted in June 2023. Despite the cash strength, buyer interest was relatively limited in nearby live cattle futures on Thursday.
Cash hog index continues to rise... The CME lean hog index extended its seasonal climb, rising another 33 cents to $83.54 as of March 20. Despite the cash strength, traders continue to narrow the premium April lean hogs hold to the index with it dropping to $1.36 as of Thursday’s close.
Overnight demand news... Exporters reported no tenders or sales.
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. Chickens and Eggs — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC