First Thing Today | May 3, 2024

Corn, soybeans and wheat extended Thursday’s gains during the overnight session.

Pro Farmer's First Thing Today
Pro Farmer’s First Thing Today
(Pro Farmer)

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Followthrough buying overnight... Corn, soybeans and wheat extended Thursday’s gains during the overnight session. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents higher, soybeans are 6 to 8 cents higher, winter wheat markets are 12 to 15 cents higher and spring wheat is mostly 7 cents higher. Front-month crude oil futures are modestly higher and the U.S. dollar index is about 140 points lower.

Brazilian crops facing both flooding and moisture stress... Torrential rains and flooding are disrupting the final stages of harvest in Rio Grande do Sul, Brazil. “Crops are under a foot of water, Rabobank analyst Vitor Pistoia told Reuters. We don’t know the extent of the damage because it’s still wet and the forecast is for further rain. The state could easily lose 1 million tons.” Meanwhile, hot and dry weather in central Brazil is damaging safrinha corn, Pistoia said.

Slower jobs growth expected... Economists polled by Reuters expect the Labor Department to report non-farm payrolls increased 243,000 in April, which would be down from the 303,000 jobs added in March. However, payrolls growth has been outpacing expectations. The unemployment rate is expected to hold at 3.8%.

Stabenow’s farm bill proposal limits PLC to 20% of Effective Reference Price... PLC is designed to work when prices get low. Stabenow’s proposal would limit payments for program crops when they are needed the most. Example: Wheat fell to $3.89 during the 2016 recession. With a reference price of $5.50, that resulted in a payment rate of $1.61 per bu. ($5.50 minus $3.89). Stabenow’s proposal would have limited PLC to $1.10 per bu. ($5.50 x 20%). Wheat growers would have seen their support cut by 51 cents per bu. at a time when it was needed most.

IKAR cuts wheat crop, export forecasts... Russia’s IKAR agricultural consultancy cut its forecast for Russia’s wheat crop to 91 MMT from 93 MMT previously. The total grain production forecast was lowered 4 MMT to 142 MMT. IKAR now expects Russia to export 64.5 MMT of grain, including 50.5 MMT of wheat in 2024-25, down 3.5 MMT and 1.5 MMT, respectively.

French wheat crop ratings unchanged... France’s ag ministry rated the country’s wheat crop as 63% good or excellent as of April 29, unchanged from the previous week. That was the lowest rating for this date since 2020.

FAO food price index marginally higher in April... The UN Food and Agriculture Organization global food price index inched up 0.3% in April, as increases in the prices for meat, vegoils and cereal grains more than offset declines in sugar and dairy. The April index was still down 7.5% from last year. Compared to year-ago, prices declined 0.4% for meat, 4.3% for dairy, 18.3% for cereal grains and 14.6% for sugar, while vegoil prices rose 0.7%.

Florida bans lab-grown meat... The legislation banning lab-grown meat in Florida, driven by Governor Ron DeSantis citing the potential threat to the state’s beef cattle industry — a sector generating over $900 million annually — underscores the economic stakes involved. Florida is the ninth-largest beef cattle producer in the Unite State. “Florida is fighting back against the global elite’s plan to force the world to eat meat grown in a petri dish or bugs to achieve their authoritarian goals,” DeSantis said. “We will save our beef.” The legislation joins similar efforts from three other states — Alabama, Arizona and Tennessee — that have also looked to stop the sale of lab-grown meat.

Futures rally gives cash cattle a boost... The sharp price rebound in cattle futures Thursday triggered stronger cash cattle bids from packers, with some prices $1.00 to $2.00 higher than the previous week. With futures at big discounts to the cash market, the late-week strength in the cash market could trigger followthrough buying today.

Cash hog market strengthening again, pork cutout stalls... The CME lean hog index is up 32 cents to $90.92 as of May 1, the second consecutive day of gains after a four-day slump. The pork cutout value slipped 11 cents on Thursday as a $13.03 rise in primal bellies was more than offset by sharp declines in loins, butts, ribs and hams.

Overnight demand news... Algeria purchased between 210,000 and 300,000 MT of milling wheat, with most of it expected to be sourced from Russia and Ukraine.

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