Good morning!
Grains firmer overnight... Corn, soybean and wheat futures showed price strength overnight and are trading near their session highs early this morning. As of 6:30 a.m. CT, corn futures are trading 4 to 10 cents higher, soybeans are 13 to 15 cents higher and wheat futures are 9 to 14 cents higher. Front-month crude oil futures are around 80 cents higher and the U.S. dollar index is more than 300 points lower this morning.
Memorial Day schedule... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Monday, May 29 for Memorial Day. As a result, there will be no Pro Farmer market updates next Monday. Grain markets resume trading at 7:00 p.m. CT on Monday, May 29 with the overnight session, while livestock markets reopen at 8:30 a.m. CT on Tuesday, May 30. Have a safe and happy holiday weekend.
Debt-limit update... The goal is to have an agreement announced late tonight or Saturday. That would give Congress just enough wiggle room to get the legislation written and give House members three days to peruse it. Lingering issues remain, but each negotiating session brings more compromise from both sides. If an accord is reached, a win-win outcome must be evident to get enough lawmakers from both political parties and chambers of Congress to get it cleared and signed into law before the “x-date” timeline is hit on debt default.
PCE data could sway odds of Fed’s next move... The CME FedWatch Tool yesterday put chances of a quarter-point interest rate rise next month at more than 50%. However, ahead of the personal consumption expenditures (PCE) price index – the Fed’s preferred inflation gauge – this morning, those probabilities declined to just 30% with nearly 70% odds the Fed will pause.
Russia again lowers wheat export tax... Russia’s wheat export tax for May 31-June 6 will be 4,525.4 rubles ($56.60) per metric ton based on an indicative price of $268.30. That’s down from a rate of 4,644.4 rubles per metric ton the previous week and the sixth straight weekly decline.
Slightly smaller German wheat crop expected... Germany’s 2023 wheat production is expected to slip 0.9% to 22.31 MMT, the country’s association of farm cooperatives forecasts. That’s up slightly from the association’s forecast last month of 22.15 MMT. Rains over the past month have been beneficial, though weather in June will be critical to crop development.
NOAA expects near-normal Atlantic hurricane season with ‘a lot of uncertainty’... The National Oceanic and Atmospheric Administration projected a “near-normal” Atlantic hurricane season, though officials cautioned unusually high sea-surface temperatures and likely transition to El Niño complicates the forecast. NOAA said the hurricane season, which runs from June 1 through Nov. 30, could bring between 12 and 17 named storms. Five to nine of those could become hurricanes, with one to four hitting Category 3 or higher.
Taiwan to fully open Canadian beef trade... Canadian beef exporters will have full access to the Taiwanese market in a few weeks, a Canadian government spokesperson said, after the countries’ top trade officials met at the Asia Pacific Economic Cooperation (APEC) meeting. Canadian Ag Minister Mary Ng met with Taiwan’s John Deng to discuss trade issues on Thursday.
France set to launch bird flu vaccination program... France confirmed its plan to launch a highly pathogenic avian influenza vaccination program in the fall after results from a series of tests on the vaccination of ducks showed “satisfactory effectiveness,” the country’s ag ministry said. France already launched a pre-order of 80 million vaccines last month, which needed to be confirmed based on final tests carried out by French health safety agency ANSES. The results of the tests demonstrated a good control of virus transmission in vaccinated mule ducks, a differentiation between infected and vaccinated animals, known as the DIVA principle, and a reduction in virus excretion by vaccinated birds, the test conclusions said.
Packers aggressively bought cattle this week... This week’s cash cattle traded volume will be one of the strongest in recent weeks as packers actively sought supplies despite next week’s shortened slaughter schedule. Given the sharp rise in cash prices, especially in the northern market where supplies are tighter, feedlots aggressively sold cattle. While this week’s trade volume could limit packers’ willingness to actively bid for cattle next week, it was important for feedlots to get ahead with their marketings after several weeks of lower-volume cash trade.
Hog traders turn even more bearish... Thursday’s sharp losses in hog futures and another rise in the CME lean hog index extended the discount nearby futures hold to the cash market. June hogs finished Thursday’s session $3.15 below today’s cash index quote of $80.80 (as of May 24). July and August futures also dropped to discounts to the cash index.
Overnight demand news... Taiwan purchased 56,000 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
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS
- 2:30 p.m. Commitments of Traders — CFTC