First Thing Today | May 16, 2024

Wheat rebounded from yesterday’s losses overnight, pulling corn and soybean futures modestly higher.

Pro Farmer's First Thing Today
Pro Farmer’s First Thing Today
(Pro Farmer)

Good morning!

Wheat leads overnight price gains... Wheat rebounded from yesterday’s losses overnight, pulling corn and soybean futures modestly higher. As of 6:30 a.m. CT, corn futures are trading mostly a penny higher, soybeans are fractionally to a penny higher and wheat futures are 10 to 14 cents higher. The U.S. dollar index is around 150 points higher and front-month crude oil futures are near unchanged.

Weekly Export Sales Report out this morning... For the week ended May 9, traders expect:

2023-24 expectations (in MT)

2023-24

last week

2024-25

expectations (in MT)

2024-25

last week

Corn

700,000-1,050,000

889,185

0-150,000

49,130

Wheat

(100,000)-100,000

41,073

300,000-600,000

405,959

Soybeans

300,000-550,000

428,898

0-100,000

4,580

Soymeal

100,000-500,000

209,266

0-75,000

19,209

Soyoil

0-12,000

11,581

0-10,000

4,582

Groups urge Treasury to promptly complete 45Z credit guidance... Some 25 trade associations from diverse sectors of the economy — including aviation, agriculture, rail, manufacturing and biofuels — sent a letter to the Treasury Department on its highly anticipated guidance for the new clean fuel production credit, which applies to both sustainable aviation fuel and vehicle fuels. The letter warns, “Any extended delays in publication of guidance for the Sec. 45Z credit may disrupt project timelines, impede capital flows and threaten existing production and demand for low carbon renewable fuels.” Signers of the letter included the Advanced Biofuels Business Council, Airlines for America, American Soybean Association, Growth Energy, National Corn Growers Association, National Oilseed Processors Association and the Renewable Fuel Association, among others.

Democrats issue joint statement opposing House farm bill... Senate Ag Committee Chair Debbie Stabenow (D-Mich.) and Rep. David Scott (D-Ga.) issued a joint statement regarding the farm bill after meeting with House Ag Committee Democrats and Rep. Hakeem Jeffries (D-N.Y.), the Democratic leader in the House. They emphasized the commitment of House and Senate Democrats to passing a strong, bipartisan farm bill that supports farm and family safety nets and invests in rural communities. Stabenow and Scott criticized House Republicans for proposing policies they believe undermine the bipartisan coalition necessary for a successful farm bill. They stressed the need for a bill that unites this coalition and maintains the tradition of providing food assistance to vulnerable Americans while supporting farmers facing the climate crisis. They expressed readiness to work with Republicans on a bipartisan bill that supports farmers, feeds families and strengthens rural communities. The joint statement appears to address policies in the House GOP farm bill proposal that would halt the use of the Thrifty Food Plan, a USDA analysis used to increase benefits under SNAP/food stamps.

Vilsack alleges House farm bill focused on ‘existing production system’... USDA Secretary Tom Vilsack says the farm bill proposed by House Ag Committee Chair Glenn “GT” Thompson (R-Pa.) focuses on maintaining the current production system rather than looking toward future advancements. Vilsack admitted he hadn’t fully studied Thompson’s proposal yet but praised Stabenow’s proposal, emphasizing the importance of the climate-smart measures she advocates for in the Inflation Reduction Act conservation programs.

Key funding questions surface regarding Stabenow’s farm bill proposals... Whenever the Congressional Budget Office (CBO) releases new farm bill scoring of both the House and Senate farm bill proposals, it will show total farm bill spending and levels for specific programs. Sources say unlike the House farm bill version, Stabenow’s bill is not spending neutral but goes considerably above the $1.51 trillion farm bill baseline over 10 years. Stabenow previously said she garnered $5 billion additional farm bill funding from Senate Majority Leader Chuck Schumer (D-NY), but details on that have never been released. Sources say the additional funding level goes considerably above $5 billion. The ag sector wants to know how much if any funding goes to Title I farmer safety net programs.

Day 2 HRW tour results... On Day 2 of the Wheat Quality Council’s HRW wheat tour, scouts found an average yield of 42.4 bu. per acre on samples taken from western and south-central Kansas. That was up sharply from an average yield of 27.6 bu. per acre in the same areas last year and the five-year average (2018-23; no tour in 2020) average of 40.8 bu. per acre. While conditions are much better than last year’s drought, scouts found varied wheat crops across areas sampled. Scouts will sample fields in southeastern and eastern Kansas today on routes from Wichita to Manhattan. A final tour yield estimate along with a scout guesstimate of Kansas crop size will be released this afternoon.

Strategie Grains raises EU wheat crop forecast... Strategie Grain raised its 2023-24 EU wheat production forecast by 1.7 MMT to 123.5 MMT given favorable crop prospects in Spain. That would still be down 2.6 MMT from last year. The firm increased its EU barley production forecast by 500,000 MT to 53 MMT, which would be up nearly 12% from last year.

France makes modest adjustments to wheat export forecasts... France’s ag ministry increased the country’s 2023-24 wheat export forecast outside the EU by 50,000 MT to 10.05 MMT. The export forecast within the bloc was trimmed 30,000 MT to 6.25 MMT.

Barge hits bridge in Galveston Bay... A barge crashed into a bridge near Galveston, Texas on Wednesday, spilling an unknown volume of “vacuum gas oil” into the water. The City of Galveston said in a written statement that “the U.S. Coast Guard is responding and will determine the extent of the spill, as well as initiate the containment and cleanup processes.” An investigation is underway and officials have not yet said what may have caused the accident.

China to discuss property aid with banks on Friday... China’s government plans to hold a meeting with key officials on Friday morning to discuss the property market, including a proposal to clear excess housing inventory, people with knowledge of the situation told Bloomberg. Senior officials from the housing ministry, financial regulators, local governments and state banks will attend the State Council meeting. Beijing is reportedly considering a proposal to have local governments buy millions of unsold homes to boost the slumping property sector.

Peru, China to discuss beef exports... Peru’s President Dina Boluarte will travel to China in June to meet with her counterpart Xi Jinping, with beef exports to China among the topics likely to be discussed. Peru’s ag minister says beef shipments to China could provide a $3 billion to $4 billion boost to its economy.

Wholesale beef continues to strengthen... Choice boxed beef prices firmed another $2.38 to $306.77 on Wednesday, while Select rose 49 cents. Wholesale beef prices have surged, led by a $10.10 jump in Choice values over the past week, significantly improving packer margins, though they remain slightly negative. Surging wholesale prices may encourage packers to raise cash cattle bids for a fourth straight week.

Cash hog index ready to run again?... The CME lean hog index is up 47 cents to $91.76 as of May 14, marking a new high for the year. After a three-week pause, the cash index may be ready to continue its climb to a seasonal high in summer. After yesterday’s losses, the premium June lean hog futures hold to the cash index dropped to $5.74.

Overnight demand news... Japan purchased 121,516 MT of milling wheat via its weekly tender, including 23,900 MT U.S., 67,806 MT Canadian and 29,810 MT Australian.

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