Good morning!
Grains solidly higher overnight... Corn and soybean futures built on Wednesday’s gains during the overnight session while wheat futures rebounded. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents higher, soybeans are 9 to 11 cents higher, winter wheat markets are 7 to 10 cents higher and spring wheat is mostly 4 cents higher. Front-month crude oil futures are around 50 cents higher and the U.S. dollar index is trading just below unchanged.
USDA: Ground beef free of H5N1, ‘safe’... USDA said late Wednesday all of the ground beef samples sent to the National Veterinary Services Laboratories (NVSL) for PCR testing came back negative for H5N1 virus. USDA’s Food Safety and Inspection Service (FSIS) collected samples of ground beef from retail outlets in the states with dairy cattle herds that had tested positive for H5N1. USDA said, “These results affirm the meat supply is safe.” FSIS is extending tests to muscle tissues from culled dairy cattle that were condemned due to systemic pathologies. The results of these tests are yet to be published but are expected soon.
Weekly Export Sales Report out this morning... For the week ended April 25, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 650,000-1,300,000 | 1,299,943 | 0-300,000 | 262,282 |
Wheat | (100,000)-100,000 | 82,035 | 200,000-600,000 | 371,858 |
Soybeans | 100,000-700,000 | 210,899 | 0-200,000 | 120,060 |
Soymeal | 150,000-350,000 | 307,859 | 0-50,000 | 35,104 |
Soyoil | (5,000)-10,000 | 16,231 | 0 | (7) |
Ukraine corn, wheat exports to fall sharply in 2024-25... Ukrainian exports of wheat and corn are likely to fall by nearly 25% in 2024-25 due to expected smaller production due to reduced plantings, the first deputy agriculture minister told Reuters. Taras Vysotskiy said wheat exports could fall to 14 MMT from 18 MMT in the current marketing year, while corn shipments may decline to the 20 MMT to 21 MMT range from 27 MMT this year. Barley exports are expected to hold steady at around 3 MMT. Vysotskiy said that so far crops are in good condition and the ministry “has yet to see any negative factors that would affect the harvest.”
Global rice market stable but weather risk remains... Global rice supplies have stabilized, although the market remains vulnerable to risks from dry weather caused by El Niño, a senior executive at commodity merchant Louis Dreyfus Co (LDC) said. “It does seem like we went through a very tight situation. You had the export ban in India and Indonesia came to buy a very large volume of rice,” said Rubens Marques, LDC’s chief executive for South and Southeast Asia. “The combination of these two factors, I think, was too much for the market to handle, which ended up pushing prices up. It does seem like the supply and prices have stabilized. We cannot deny that climate change has had an impact and may still have an impact in terms of having this El Niño and having drier than expected weather,” he said.
Yen surges on suspected intervention... The yen surged against the U.S. dollar early in the Asian trading session on what traders suspected was another round of intervention by Japanese authorities to stop the sharp slide in the currency, though it has pared some of those gains this early this morning. Tokyo’s latest entry into the market was likely around 3.5 trillion yen ($22.5 billion), based on a comparison of Bank of Japan (BOJ) accounts and money broker forecasts, Bloomberg reported. This is the second suspected intervention by BOJ on Monday. Central bank accounts suggested Monday’s move was likely an intervention by Tokyo worth around 5.5 trillion yen, close to the daily record of 5.6 trillion yen set in October 2022.
OECD raises global economic growth forecast on U.S. strength... The global economy is growing faster than expected thanks to resilient U.S. activity while inflation is converging more quickly than expected with central banks’ targets, the Organization for Economic Cooperation and Development (OECD) said. OECD forecasts global economic growth of 3.1% for this year and 3.2% in 2025, up 0.2 point for both years from its prior outlook. But the speed of recoveries diverged widely, as lingering sluggishness in Europe and Japan was being offset by the U.S., whose growth forecast was hiked to 2.6% this year from a previous estimate of 2.1%. China’s economy is expected to grow 4.9% this year, up from the previous forecast of 4.7%. A faster-than-expected decline in inflation sets the stage for major central banks to begin rate cuts in the second half of the year while also boosting consumers’ incomes, OECD said.
Euro zone factory activity slows in April... HCOB’s final euro zone manufacturing purchasing managers index (PMI) compiled by S&P Global fell to 45.7 in April from March’s 46.1. That was the 22nd straight month of contraction in the bloc’s manufacturing sector. The latest reading signaled a slightly faster rate of deterioration in euro zone manufacturing business conditions, as the inflow of new orders declined at a steeper pace, though output contraction eased for a second consecutive month to the slowest pace in a year.
Cattle futures, wholesale beef prices struggling to gain footing... Cattle futures faced heavy selling pressure on Wednesday amid concerns with beef demand. Wholesale beef prices fell 83 cents for Choice and $1.88 for Select yesterday, though movement surged to 186 loads. The heavy movement tally signals strong underlying retailer demand, which should help alleviate some demand concerns, especially with USDA’s announcement that ground beef is free of the H5N1 virus.
Cash hog slide halts... The CME lean hog index is up 34 cents to $90.60 as of April 30, ending a four-day slide. After sharp losses on Wednesday, the premium in May lean hog futures narrowed to $2.425 while June hogs finished $9.825 above today’s cash quote.
Overnight demand news... Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Mauritius tendered to buy 4,000 MT of optional origin long grain white rice.
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
- 7:30 a.m. Weekly Export Sales — FAS