Good morning!
Wheat and corn lower, soybeans higher... Wheat and corn continued to be pressured in overnight trade. Soybeans traded higher. As of 6:30 a.m. CT, wheat futures are trading mostly 13 to 15 cents lower, corn is 1 to 4 cents lower, and soybeans are 1 to 3 cents higher. Front-month U.S. crude oil futures are more than $1.50 higher, and the U.S. dollar index is around 300 points lower this morning.
Russia/Ukraine update... The first face-to-face talks in two weeks between Russia and Ukraine began Tuesday in Turkey, raising flickering hopes of progress to end a war that has ground into a bloody campaign of attrition. Ahead of the talks, Ukrainian President Volodymyr Zelenskyy has said his country is prepared to declare its neutrality, as Moscow has demanded, and is open to compromise on the fate of the Donbas, the contested region in the country’s east. Zelenskyy said late Monday that Russian forces are still attacking Kyiv. The situation remains tense in the northeast and the eastern Donbas region and the south around Mariupol. The International Atomic Energy Agency director-general arrived in Ukraine to talk with government officials to ensure the safety of Ukraine’s nuclear facilities. Germany’s foreign minister says her country is working toward a ‘de facto’ embargo of Russian oil because of the war in Ukraine.
HRW wheat crop ratings improve a little during March... When individual state crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500, with 500 being perfect), the HRW wheat crop showed modest improvement over the past month. Based on individual state ratings, the HRW CCI rating stands at 266.5 points, up 7.5 points from the end of February but down 58.0 points from USDA’s last national ratings last fall and 63.4 points below the five-year average for the beginning of April, when USDA starts issuing its national crop condition reports each spring.
Consultant expects fewer corn acres, more soybean plantings...
Ahead of Thursday’s Prospective Plantings Report, Crop Consultant Dr. Michael Cordonnier released his initial corn and soybean acreage projections. He expects corn acres to fall 1.8 million from last year to 91.5 million acres and soybean seedings to increase 1.4 million to 88.5 million acres.White House expects farmers to increase plantings... Cecilia Rouse, the chair of President Joe Biden’s Council of Economic Advisers, predicted that American farmers would adjust and increase their planting to take advantage of higher prices. “With the price of food rising, they will be responding by doing —making additional plantings and trying to take advantage of the increased price signal,” she said. “So, the market will work as the market will work.” She did not expect a food shortage in the U.S. since the country is a net exporter. However, she knew many regions were heavily dependent on wheat and other grains from Russia and Ukraine.
Ukraine farmers start sowing on 15-20% of planned area... Ukrainian farmers have started sowing on at least 15-20% of the planned areas for spring crops, UkrAgroConsult (UAC) said. “Spring has finally come to Ukraine; the soil has already frozen off enough to start sowing.” Other areas are still facing frosts at night. Farmers often are not receiving diesel fuel purchases as military forces are getting priority for fuel supplies. Seeds are available, while fertilizer supplies are worse.
Taiwan to extend tariff cut on wheat, soybean to end of June... Taiwan plans to extend the tariff cut on wheat, corn, soybean, butter, powdered milk for baking and imported beef to end-June to stabilize prices and ease inflationary pressure, according to a statement from the cabinet late Monday. The reduction of the commodity tax on gasoline and diesel oil will also be extended to end-of-June.
China’s grain supplies ample, prices to stay stable... China’s supplies of grains and other farming products key to daily life are secure and their prices can stay stable, Economic Daily reports, citing the agriculture ministry and its affiliated researchers. China’s grains are more than 95% locally produced, which has helped contain domestic price gains even as global prices rise faster this year. Cooking oil prices are expected to fall gradually as output is likely to rise this year, while pork price declines may ease as the government steps up support to farmers. Supplies of eggs, dairy products and vegetables are all ample.
India wheat exports increasing... India, the second-largest grower, could export a record amount of grain in the coming year to help fill the gap left by halted Black Sea supply. India could ship 12 million tons of wheat to the world market in the 2022-23 year, the most on record, according to the median of five estimates in a Bloomberg survey of traders, millers and analysts. That compares with shipments of 8.5 million tons in 2021-22, USDA data show. India is in final talks to start wheat shipments to Egypt, the world’s top buyer, while discussions are in progress with countries such as China, Turkey, Bosnia, Sudan, Nigeria and Iran, the commerce ministry said this month. Wheat exports from India were already up more than fourfold to about 6 million tons in the 10 months through January from a year earlier.
Australia wheat is ‘pretty well’ sold out for the first half of the year... As buyers in the Middle East and Southeast Asia sought to replace Black Sea supplies cut off by the war in Ukraine, Australian wheat is ‘pretty well’ sold out for the first half of the year, according to CBH Group, the country’s biggest shipper. Most of the available capacity will be in the second half, Jason Craig, chief marketing and trading officer, told Bloomberg. Australia is looking to ship a record amount of wheat this year after a huge harvest. The country is set to export 27.5 million tons of wheat in 2021-22, behind Russia with 32 million tons and the European Union with 37.5 million tons, according to USDA. However, Russian shipments could be impacted as the war persists and sanctions take hold.
India makes Russian sunflower oil purchases at record high prices... India has purchased 45,000 MT of sunflower oil at record prices to be delivered in April, five industry officials told Reuters. Crude sunflower oil at a record price of $2,150 per MT, compared with $1,630 before Russia invaded Ukraine. India buyers halted Russian purchases for a month after the invasion but are now buying as banks offer letters of credit. More than 300,000 MT of Ukraine sunflower oil is stuck. India has also been trying to purchase sunflower oil from Argentina. However, the country will still likely need to import other vegetable oils to cover demand.
Fed pivots to higher rate hikes... Federal Reserve officials, rattled by persistent inflation and criticism that they’re behind the curve, have shifted toward an even more aggressive plan of interest-rate hikes than they signaled earlier this month to ensure price increases cool. In speech after speech, since they raised rates, officials stress that they want the central bank’s lead role in cooling price pressures to occupy a much more prominent part in the national conversation. That assessment seems to have pushed the center of gravity on the Federal Open Market Committee toward a half-point hike in May, with investors leaning into that bet in interest-rate futures markets and pricing around 2.1% percentage points of more tightening for the year as a whole -- the equivalent of about eight quarter-point hikes over six remaining meetings this year. Some on Wall Street expect the Fed to go even faster: Citigroup Inc. economists have penciled in four straight half-point hikes, followed by two quarter-point moves.
USDA confirms new HPAI cases... USDA’s Animal and Plant Health Inspection Service (APHIS) now shows 77 confirmed cases of highly pathogenic avian influenza (HPAI). Confirmed HPAI cases have now been found in 45 commercial operations. Cases were confirmed in commercial turkey flocks in South Dakota and Minnesota. A commercial pullet operation in Franklin County, Iowa, was also confirmed. Backyard flocks in Maine, Nebraska, Missouri and South Dakota were also confirmed.
Wholesale beef prices firm, but movement slows... Packers raised wholesale beef prices $1.23 for Choice boxes and $4.18 for Select, though they moved only 71 loads of product at the sharply higher values. Retailers continue to be selective buyers, likely fearing they could get stuck with too much supply amid consumer resistance to strong retail prices.
Plenty of cash optimism built into April hogs... April lean hog futures finished Monday $4.645 above today’s cash index quote (as of March 25) of $102.93, which is up 68 cents from yesterday. That signals traders expect the cash index to continue to rise, though the premium may limit further gains in April futures unless cash prices surge.
Overnight demand news... Turkey reduced its purchases of optional origin corn to 100,000 MT from the initial volume of 300,000 MT. Algeria tendered to buy a nominal 50,000 MT of optional 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
- 11:00 a.m. State Stories — NASS
- 2:00 p.m. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Egg Products — NASS