Good morning!
Wheat leads overnight price gains... Corn, soybeans and wheat rebounded from Tuesday’s losses during the overnight session, led by gains in wheat. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents higher, soybeans are 5 to 6 cents higher and wheat futures are 8 to 12 cents higher. The U.S. dollar index is around 150 points lower and front-month crude oil futures are down about 40 cents.
Day 1 HRW wheat tour results... On Day 1 of the Wheat Quality Council’s HRW wheat tour, scouts found an average yield of 49.9 bu. per acre on samples taken from central and northern Kansas, up from 29.8 bu. per acre along the same routes last year and the five-year (2018-23; no tour in 2020) average of 42.7 bu. per acre. Scouts reported varied conditions and yield potential from the fields sampled. There was a prevalence of stripe rust, but concerns over drought outweighed those worries. Scouts will sample fields in western and southern Kansas today on routes from Colby to Wichita.
SovEcon cuts Russian wheat crop estimate... Black Sea consulting firm SovEcon cut its Russian wheat crop estimate to 85.7 MMT, down 3.9 MMT from its prior outlook due to recent frost damage.
France inches up wheat planted area estimate but still sharply below year-ago... France’s ag ministry estimates farmers planted 4.40 million hectares of soft wheat, up from a prior forecast of 4.39 million hectares but still 7.5% below last year. The sharp decline in fall seedings due to wet conditions combined with adverse weather through winter and spring have analysts expecting the smallest French wheat crop since 2020.
Record April NOPA soy crush expected... The National Oilseed Processors Association (NOPA) is expected to report its members crushed 183.1 million bu. of soybeans during April. That would be down 6.8% from the all-time record of 196.4 million bu. in March and the smallest monthly figure since September. But it would be up 5.7% from year-ago and a record for the month. Soyoil stocks are expected to total 1.882 billion pounds.
Appeals court upholds 2020-22 RFS blending mandates... The U.S. Court of Appeals for the District of Columbia Circuit ruled EPA lawfully exercised its discretion in setting biofuels blending requirements for 2020 through 2022. In 2022, EPA set biofuel blending mandates for that year at 20.63 billion gallons, as well as retroactive volume mandates for 2021 at 18.84 billion gallons and for 2020 at 17.13 billion gallons. The agency denied oil refiners waivers to be exempt from the requirements but said it would allow extra time for small refiners to meet their 2020 blending obligations. Oil refiners challenged the rule, arguing the standards were too high. Meanwhile, producers of cellulosic biofuels also challenged the rule, saying the standards for cellulosic biofuels were too low.
Farm bill update... House Ag Committee Chair Glenn “GT” Thompson (R-Pa.) and Senate Ag Chair Debbie Stabenow (D-Mich.) met to discuss the upcoming farm bill, with a House committee markup scheduled for May 23. Thompson expressed a commitment to resolving differences between the House and Senate versions of the bill, emphasizing the need for significant funding beyond the $5 billion identified by Stabenow. Additionally, House Ag Committee Democrats are set to meet with Stabenow and House Minority Leader Hakeem Jeffries (D-N.Y.) to discuss the bill and potentially support the Senate’s version. If Democrats vote in unison against the House farm bill approach they will use their consistent arguments regarding food stamp/Thrifty Food Plan and conservation program funding.
Copper surges to record high... Copper futures hit a record high above $5.00 per pound overnight. Tighter global supplies, better world economic growth, smelter issues in China, as well as rampant market speculation, are driving copper prices sharply higher. The sharp price increase is causing traders in China to hastily arrange shipments to American warehouses.
China leaves key policy rate unchanged... The People’s Bank of China (PBOC) kept the rate on 125 billion yuan ($17.28 billion) in one-year MLF loans to some financial institutions unchanged at 2.50%. With the same amount in MLF loans set to expire this month, the operation resulted in zero fresh fund injection or withdrawal from the banking system. PBOC injected 2 billion yuan through a seven-day reverse repurchase operation, holding borrowing costs steady at 1.8%.
China considers home buys to boost ailing property sector... China is considering a proposal to have local governments across the country buy millions of unsold homes to boost the ailing property sector, Bloomberg reported, citing people familiar with the situation. The State Council is reportedly seeking feedback from several provinces and government entities on the preliminary plan. While China has already experimented with several pilot programs to clear excess housing inventory with the help of state funding, the latest plan would be much larger in scale. Local state-owned enterprises would be asked to help purchase unsold homes from distressed developers at steep discounts using loans provided by state banks, according to two of the people. Many of the properties would then be converted into affordable housing.
Euro zone economy grows in Q1... On a quarterly basis, the euro zone’s GDP expanded 0.3% in the first quarter, recovering from a mild recession after a 0.1% contraction in each of the previous two quarters. Compared to the previous year, first quarter GDP expanded 0.4%. Among the biggest euro zone economies, Spain was the strongest performer in the first quarter with 0.7% growth while Germany, France and Italy were all at or just below the euro zone average.
Wholesale beef market picking up steam... Wholesale beef prices jumped another $5.44 for Choice and $6.64 for Select on Tuesday, adding to Monday’s strong gains. Despite the surge in prices this week, spot movement has totaled 234 loads, including 121 yesterday. That suggests strong retailer demand is fueling the resurgent wholesale prices.
Cash hog fundamentals remain in neutral... The CME lean hog index is up 7 cents to $91.29 as of May 13, continuing to hold just below the seasonal peak to date in late April. The pork cutout value dropped 93 cents to $101.51 on Tuesday, as declines in bellies, loins and butts more than offset higher prices in the other cuts. The pork cutout is holding below its mid-April seasonal peak to date.
Overnight demand news... Thailand purchased 60,000 MT of optional origin feed wheat. Japan purchased 23,428 MT of feed wheat and 380 MT of feed barley. Jordan tendered to buy up to 120,000 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Monthly Soybean Crush — NOPA
- 11:00 a.m. Meat Price Spreads — ERS
- 11:00 a.m. Census of Agriculture - Congressional District Rankings — NASS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Turkey Hatchery — NASS