Good morning!
Quiet trade overnight... Corn, soybeans and wheat held in relatively tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are narrowly mixed, SRW wheat is mostly 6 to 7 cents lower, while HRW and HRS wheat are mostly a penny higher. The U.S. dollar index is more than 200 points lower and front-month crude oil futures are trading just below unchanged.
Memorial Day schedule... Grain and livestock markets will trade normal hours today. All markets and government offices are closed Monday, May 27, for Memorial Day. There will be no Pro Farmer reports or market commentary on Monday. Grain markets will reopen with the overnight session at 7:00 p.m. CT on Monday, May 27. Livestock markets will resume trading at 8:30 a.m. CT on Tuesday, May 28. Pro Farmer salutes all who gave their lives serving our great country. Happy Memorial Day.
House completes farm bill markup... A contentious House Ag Committee markup of a new $1.51 trillion farm bill began on Thursday and ended early Friday with four Democrats joining all 29 panel Republicans in voting for the measure, bringing the final tally to 33-21. Ag Committee Republicans blocked attempts by Democrats to amend the bill. Focus now turns to the House floor strategy for bringing the measure to a full chamber vote. Other keys moving forward include:
- How many total Democrats will vote for the bill if and when it gets a House floor vote?
- How many Republicans will vote against the measure on the House floor?
- Will the House Rules Committee be a problem in clearing the bill?
- How many and which amendments will be ruled in order in House floor action?
- Will this help push Senate Ag Chairwoman Debbie Stabenow (D-Mich.) to officially release text of her bill?
- What will ranking Senate Ag member John Boozman’s (R-Ark.) alternative farm bill contain when its released likely in June?
Click here to see our full special report on the matter.
Crop Index turns higher for the year, rekindling food inflation worries... The Bloomberg Agriculture Spot Index, which gauges prices of nine major crops, turned higher on the year and is headed for the largest weekly gain since July. Bloomberg notes, “Droughts to frosts and heavy rain are popping up across key growers, risking tighter supplies and lifting the cost of agricultural staples.” While the measure remains far from its 2022 peak, the gains could eventually spell higher consumer prices. USDA will update its food price outlook this morning.
USDA announces domestic fertilizer projects using CCC funds... As the House Ag Committee considered restricting the Agriculture Department’s use of the Commodity Credit Corporation (CCC), USDA Secretary Tom Vilsack announced new projects to increase domestic fertilizer production using CCC funds. Vilsack announced $83 million in awards for projects in 12 states through the Fertilizer Production Expansion Program (FPEP). Projects are in California, Florida, Hawaii, Iowa, Illinois, Kansas, Kentucky, Minnesota, North Carolina, North Dakota, Oregon and Washington. To date, USDA has invested $251 million in 57 projects across 29 states through FPEP, which was created to address rising fertilizer prices that more than doubled between 2021 and 2022 due to factors like the war in Ukraine and a lack of competition in the fertilizer industry.
French wheat crop ratings decline... France’s ag ministry rated the country’s wheat crop as 63% good or excellent as of May 20, down one percentage point from the previous week and the lowest for the date since 2020. There are concerns persisting wet conditions damage maturing wheat.
New China trade war?... Group of Seven (G7) trade ministers are debating China’s industrial overcapacity, which U.S. Treasury Secretary Janet Yellen says is pumping cheap exports onto the global market. Other G7 members joining the call for China to rein in overcapacity, with France’s finance minister said there needs to be a clear assessment of overcapacity in China and of the “most efficient tools” to address the issue. He said the International Monetary Fund could be involved in the analysis.
China’s FDI continues to slump... Foreign direct investment (FDI) into China slowed for a fourth straight month in April, underscoring Beijing’s struggle to attract more overseas funds to boost its flagging economic growth. New actually utilized foreign investment into China was 58.5 billion yuan ($8.1 billion) last month, according to calculations based on figures provided by China’s commerce ministry. That was down 36% from year-ago and was the second-lowest total for any month since late 2019. FDI into China totaled 360.2 billion yuan ($49.73 billion) in January-April, down 27.9% from the same period last year.
Chinese developer able to delay debt payments... China Vanke Co. has swapped some of its privately issued debt held by insurers into asset-backed securities, as the builder works to further push back already deferred payments, people familiar with the matter told Bloomberg. China’s second-largest builder by sales, had been negotiating with insurers after it deferred payments twice since December 2023, when the lenders first asked for early payment. The swap will allow Vanke to move payments to 2027 at the earliest, according to one of the people.
Feedlot inventory expected to be below year-ago... Analysts expect USDA’s Cattle on Feed Report this afternoon to show the large feedlot (1,000-plus head) inventory under year-ago levels for the first time in eight months. Based on a Reuters poll, USDA is expected to report the May 1 feedlot inventory down 0.8% from last year, while April placements are seen falling 6.1% and marketings rising 9.8%.
Cold Storage Report also out this afternoon... USDA will detail frozen meat stocks at the end of April. The five-year average is a 21.6-million-lb. decline in beef stocks and a 18.8-million-lb. rise in pork stocks during the month.
Additional cash cattle trade at higher prices... Cash cattle activity picked up on Thursday, with feedlots in the Southern Plains moving supplies at $1.00 higher prices. Activity was quieter in the northern market, where most feedlots passed on $1.00 higher prices in hopes of even stronger bids.
Cash hog fundamentals extend slide... The CME lean hog index is down another nickel to $91.77 as of May 22, the fourth straight daily decline. The pork cutout value dropped another $1.38 on Thursday to $98.69, as all cuts except loins and butts weakened, marking the third consecutive decline
Overnight demand news... South Korea purchased 137,000 MT of corn to be sourced from the U.S., South America or South Africa. Taiwan tendered to buy 96,850 MT of U.S. 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
- 8:00 a.m. Food Price Outlook — ERS
- 2:00 p.m. Cattle on Feed — NASS
- 2:00 p.m. Chickens and Eggs — NASS
- 2:00 p.m. Cold Storage — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC