Good morning!
Grains firmer overnight... Soybeans firmed to near their weekly highs overnight, while corn and wheat recouped some of their declines from the three previous days. As of 6:30 a.m. CT, corn futures are trading fractionally higher, soybeans are 7 to 8 cents higher and wheat is 5 to 8 cents higher. The U.S. dollar index is more than 300 points higher and front-month crude oil futures are trading just below unchanged this morning.
House farm bill update... House Ag Chair Glenn “GT” Thompson (R-Pa). continues to follow through on getting info out on the proposed House farm bill. Later this morning, House farm bill text will be officially released. Included are variable farmer-friendly boosts in Reference Prices and two key pay cap provisions. Opportunities to increase base acres are also in the bill. We’ll have details in “Evening Report” and on profarmer.com.
CRA resolution filed to overturn Biden’s EV tax credit rules... A Congressional Review Act (CRA) resolution has been filed in both the House and Senate to overturn the Biden administration’s rules on electric vehicle (EV) tax credits. The resolution was introduced by Reps. Carol Miller (R-W.Va.) and Jared Golden (D-Maine) in the House, and by Sens. Joe Manchin (D-W.Va.) and Deb Fischer (R-Neb.) in the Senate. The Biden administration’s rules, released earlier this month, provide automakers with two additional years to source certain battery minerals domestically. Lawmakers argue the administration should be more aggressive in reducing dependency on battery minerals from China. While the CRA resolutions are expected to pass in both chambers, President Joe Biden is likely to veto them. Overriding this veto would require a two-thirds majority in both chambers, which is unlikely to be achieved.
HRW wheat tour calculates highest Kansas yield since 2021... The Wheat Quality Council HRW wheat tour estimated the Kansas wheat yield at 46.5 bu. per acre, the highest since 2021 and above the five-year average (2018-23; no tour in 2020) of 42.4 bu. per acre. Crop quality varied drastically across the state, with wheat in the drier south-central and southwestern portions of Kansas in the poorest condition. Other areas had green, lush fields. Scouts noted stripe rust in some areas of the state. Tour scouts guesstimated the Kansas wheat crop at 290.4 million bushels.
French wheat crop ratings stable at four-year low... France’s ag ministry rated the country’s wheat crop as 64% good or excellent as of May 13, unchanged from the previous week. That remained the lowest rating for the date since 2020.
German winter wheat seedings decline... German farmers planted 2.6 million hectares of winter wheat for this year’s harvest, down 8.3% from year-ago, according to the country’s national statistics agency. Winter rapeseed plantings dropped 5.8% to 1.1 million hectares. Sowing of winter barley, largely used for animal feed, increased by 2.5% to 1.3 million hectares, the agency said. Sowing of spring grains including wheat and barley increased by 19.6% to 1.1 million hectares, it said.
Argentina to plant more wheat for 2025 harvest... Argentina’s government estimated wheat planted area for 2024-25 at 6.15 million hectares, up 4% from this year. The report said economic conditions, soil moisture and the high probability of La Niña could affect planted area.
Chinese firms investing heavily in SAF... Biofuels firms are pouring more than $1 billion into building China’s first plants to turn waste cooking oil into sustainable aviation fuel (SAF) for export and to meet domestic demand once Beijing mandates the fuel’s use on airplanes to cut emissions. China is expected to unveil this year its policy on SAF use for 2030 that could spur billions of dollars of investment, industry executives told Reuters. Companies such as Junheng Industry Group Biotech, Zhejiang Jiaao Enprotech and Tianzhou New Energy plan to start up plants over the next 18 months to produce more than one million metric tons per year of SAF combined, six SAF investors told Reuters. Once online, the projects would use supplies of used cooking oil (UCO) that China currently exports. Last year, China exported a record 2.05 million tons of UCO, mostly to the U.S. and Singapore.
China’s factory activity builds but retail sales slump... China’s industrial production grew 6.7% from year-ago in April, accelerating from the 4.5% pace seen in March. For the first four months of the year, industrial output grew by 6.3% from the same period last year. China’s retail sales rose 2.3% from last year in April, slowing from 3.1% in March. That was the 15th straight month of year-over-year gains in retail sales, though the weakest gain during that span. For the first four months of the year, retail sales grew 4.1% from year-ago.
China unveils broad property rescue package... The People’s Bank of China will facilitate 1 trillion yuan ($138 billion) in extra funding to shore up the beleaguered property market. China effectively scrapped the nationwide minimum mortgage interest rate while cutting the minimum down-payment ratio to 15% for first-time buyers and 25% for second homes. Beijing also said local governments should acquire homes at “reasonable” prices and turn them into affordable housing. Policymakers have increased urgency to rescue the housing sector as China’s new home prices declined 3.1% in April, the 10th straight monthly decline and the fastest fall since July 2015.
Euro zone inflation rises 2.4%... Consumer inflation in the euro zone increased 2.4% from year-ago in April, the same as the flash data indicated. That matched March and November 2023 for the lowest level since July 2021. Core inflation, excluding energy, food, alcohol and tobacco, fell for a ninth straight month to 2.7%, the lowest since the same level in February 2022.
Wholesale beef market continues to strengthen... Wholesale beef prices firmed another $3.38 for Choice and $2.20 for Select on Thursday, while movement stayed solid at 115 loads. Some plants are now cutting in the black after an extended period of red ink. The rapidly rising wholesale beef prices have feedlots expecting higher cash cattle prices for a fourth consecutive week.
Cash hog index rising... After three weeks of treading water, the CME lean hog index marked a for-the-move high for a second straight day. Today’s cash quote is up 37 cents to $92.13 as of May 15. June lean hog futures built their premium to the cash index to $6.245 after yesterday’s gains.
Overnight demand news... South Korea made no purchase in a tender to buy up to 69,0000 MT of corn from South America or South Africa.
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. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC