Good morning!
Modest price strength overnight... Soybeans extended gains from the past two days during overnight trade, while corn and wheat firmed amid mild corrective buying. As of 6:00 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are mostly 7 to 11 cents higher and wheat futures are 1 to 3 cents higher. Front-month crude oil futures are modestly weaker and the U.S. dollar index is more than 100 points higher this morning.
Black Sea grain deal talks slated for Wednesday... All sides involved in the Black Sea grain deal are scheduled to meet Wednesday, a senior Ukrainian source told Reuters, who said, “hopefully there will be results.” Russian officials reiterated there had been no progress in removing what Moscow says are obstacles to its grain and fertilizer exports.
Ukraine expects 2023-24 grain exports to plunge... Ukraine’s grain exports could plunge to around 26 MMT in 2023-24, a senior ag ministry official told Reuters, as production is sharply reduced due to the war. Ukraine has exported 41.6 MMT of grain to date in the current marketing year, and shipments are expected to exceed 50 MMT by June 30. The official expects new-crop exports to total around 9 MMT of wheat and 15 MMT of corn.
Winter wheat CCI ratings decline despite rise in USDA’s ratings... When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped another 1.8 points to a historically low 242.8. While the wheat crops in Oklahoma, Colorado and Montana showed modest improvement, the other states declined. The SRW crop slipped 2.2 points but remained above average with a CCI rating of 374.2. Click here for more details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of April 30.
- Winter wheat: 28% good/excellent (26% last week); 25% headed (23% five-year average).
- Corn: 26% planted (26% average); 6% emerged (5% average).
- Soybeans: 19% planted (11% average).
- Cotton: 15% planted (14% average).
- Spring wheat: 12% planted (22% average); 2% emerged (6% average).
Consultant leaves U.S. crop estimates unchanged... Crop consultant Dr. Michael Cordonnier kept his U.S. corn and soybean production estimates at 15.03 billion bu. and 4.53 billion bu., respectively. He has a neutral to lower bias for both corn acreage and yield, noting flooding, saturated soils and slow planting in the northwestern Corn Belt. He has a neutral to higher bias for soybean acreage, saying soybeans could pick up some originally intended corn acres in the northwestern Corn Belt.
No changes to South American estimates, either... Cordonnier kept his Brazilian and Argentine soybean and corn crop estimates unchanged. In Brazil, he forecasts production at 153 MMT for soybeans and 123 MMT for corn. Soybean harvest is nearing completion, so focus will be on weather for the safrinha corn crop, which has been favorable to date. For Argentina, Cordonnier estimates production at 23 MMT for soybeans and 36 MMT for corn. He has a neutral to lower bias toward both crops.
Things finally happening on the debt-limit front... President Joe Biden called House Speaker Kevin McCarthy (R-Calif.) and other congressional leaders Monday, asking them to meet about the looming debt-limit deadline. McCarthy, traveling in Jerusalem, said he would meet with Biden. The two have been quarreling over the debt limit for months. McCarthy asked Biden to negotiate. Biden wanted McCarthy’s House to pass a budget. Meanwhile, Treasury Secretary Janet Yellen wrote a letter to congressional leadership Monday saying the U.S. could default on its debt by as early as June 1.
U.S. & Canada to meet... U.S. Trade Representative Katherine Tai will meet with Canada’s Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng today. A key topic will be any updates regarding Canada’s implementation of their dairy tariff rate quotas (TRQs), which the U.S. complains are being implemented in a way that limits access for U.S. dairy products to the Canadian market.
Euro zone inflation rises, but core prices unexpectedly drop... Euro zone consumer inflation increased 7.0% from year-ago in April, up from a 6.9% rise in March. Excluding volatile food and fuel prices, core inflation slowed to 7.3% from 7.5%, while an even narrower measure, which excludes alcohol and tobacco, declined to 5.6% from 5.7% previously.
IMF raises Asia’s economic forecast amid China rebound, but warns of risks... The International Monetary Fund (IMF) raised its economic forecast for Asia as China’s recovery underpinned growth. Collectively, Asia’s economy is expected to expand 4.6% this year after a 3.8% increase in 2022, contributing around 70% of global growth, IMF said, upgrading its forecast by 0.3 point from October. China and India will be key drivers with an expansion of 5.2% and 5.9%, respectively, though growth in the rest of Asia is also expected to bottom out this year, the report said. IMF cut next year’s Asian growth forecast by 0.2 point to 4.4% and warned of risks to the outlook such as stickier-than-expected inflation, slowing global demand as well as the impact of U.S. and European banking-sector stress.
Retailers resisting high beef prices... Choice boxed beef prices fell $1.42 on Monday, but with prices still above $310.00, packers moved only 78 loads on the day. With beef production down amid tight market-ready supplies and falling carcass weights, retail prices aren’t likely to fall sharply. Retailers may have to decide whether to bite the proverbial bullet and buy beef despite high prices or feature something else during the next couple months, which have historically been strong for beef demand.
Hog premiums narrow but still wide... The combination of losses in hog futures on Monday and a 61-cent gain in the CME lean hog index today (as of April 28) has narrowed premiums to the cash market. Still, May hog futures finished Monday $7.20 above today’s cash quote, while the June contract held a $17.60 premium.
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
- No reports scheduled.