Good morning!
Active followthrough selling in grains overnight... Corn, soybeans and wheat actively extended Tuesday’s losses during overnight trade. As of 6:30 a.m. CT, corn futures are trading 7 to 10 cents lower, soybeans are 16 to 20 cents lower, winter wheat futures are 12 to 14 cents lower and spring wheat is mostly 9 cents lower. Front-month crude oil futures are more than $1.75 lower and the U.S. dollar index is about 275 points higher.
House leaders set to pass bill to suspend debt ceiling until after the 2024 elections... The bill cleared its first major hurdle by passing the House Rules Committee with a 7-6 vote Tuesday evening. The legislation is expected to be debated on the House floor today. Despite some bipartisan criticisms, both House Speaker Kevin McCarthy (R-Calif.) and President Joe Biden appear confident the bill will pass in both chambers of Congress and become law before June 5. This date is significant as the Treasury Department estimates the government will run out of money to pay its bills by then.
Corn CCI rating starts lower than last year... When USDA’s initial weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop starts the growing season with a 375.9 rating. That’s down 6.7 points from last year’s first rating, though it came one week later. Click here for more details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of May 28.
- Corn: 92% planted (84% average); 72% emerged (63% average); 69% good/excellent (71% average; 71% expected.
- Soybeans: 83% planted (65% average); 56% emerged (40% average).
- Cotton: 60% planted (62% average); 3% squaring (6% average); 48% good/excellent (44% last year).
- Spring wheat: 85% planted (86% average); 57% emerged (59% average).
- Winter wheat: 34% good/excellent (31% last week); 72% headed (73% five-year average).
Mexican official: Latest GMO corn decree avoids need for trade panel... The U.S. threat of taking Mexico to a U.S.-Mexico-Canada Agreement (USMCA) dispute settlement panel over the country’s plan to limit use of GMO corn is no longer a worry, Mexican Agriculture Minister Victor Villalobos said. In February, Mexico published a decree softening its stance. It still bans GMO corn for human consumption but permits yellow corn imports for livestock feed, which makes up most of what Mexico brings in from the United States. “The issue of agriculture in bilateral terms, with this new decree, no longer has any topic for discussion,” Villalobos said in an interview with Mexican newspaper Milenio. “That potential threat (from the panel) existed before the second decree came out.”
China trying to salvage damaged wheat... China’s ag ministry urged local authorities to speed up harvesting and drying of damaged grain, after heavy rain flooded fields of ripe wheat in Henan, the country’s largest growing region. Authorities should send emergency teams to drain water from fields, speed up access by harvesters and mobilize drying machinery to save as much of the crop as possible, the ministry said. It also urged buyers to purchase sprouted wheat that can still be used for feed or industrial purposes, while making sure it does not go to food.
Hungary wants Ukraine import curbs extended... Hungary asked the EU to extend import curbs on Ukrainian grains and oilseed crops for five eastern European states at least until the end of 2023, Ministry of Agriculture State Secretary Zsolt Feldman said. Hungary also asked Brussels to grant financial support to local farmers to facilitate the transport of grain stocks stuck in domestic storage before this year’s harvest. The EU restricted imports of Ukrainian wheat, corn, rapeseed and sunflower seeds until June 5 in Bulgaria, Hungary, Poland, Romania and Slovakia, but said that could be extended if oversupply situations in those countries still existed at that time.
China’s factory sector slumps to five-month low... China’s official manufacturing purchasing managers index unexpectedly fell to a five-month low of 48.8 in May, the second straight month of contraction in the factory sector. Output contracted for the first time in four months, while new orders, buying activity and export sales shrank faster.
ERP 2 payouts continue to rise... Payouts under Phase 2 of the Emergency Relief Program (ERP) increased to $823,626 as of May 29, benefiting a total of 424 recipients. In contrast, the totals for Phase 1 of ERP remained stable with total payments of $7.43 billion, including $7.43 billion for non-specialty crops and $1.13 billion for specialty crops. Payments under the Coronavirus Food Assistance Program (CFAP) remained mostly unchanged in the recent week.
Cattle futures remain well below cash market... The average cash cattle price firmed $2.79 to $177.94 last week, the third highest weekly tally behind two weeks in April earlier this year. June live cattle futures finished Tuesday $9.065 below last week’s average cash price. While that suggests there’s plenty of room for futures to run to the upside, we expect traders to remain conservative and keep the lead contract at a sizable discount to cash.
June hog futures back above cash index... The CME lean hog index dropped 40 cents to $80.08 (as of May 29), the second straight daily decline after the recent string of gains. After Tuesday’s strong corrective gains, June hog futures moved to a 74.5-cent premium to today’s cash quote, though the July and August contracts remained at discounts.
Overnight demand news... South Korea purchased 55,000 MT of optional origin feed 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. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Outlook for U.S. Agricultural Trade: May 2023 — ERS
- 2:00 p.m. Agricultural Prices — NASS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Egg Products — NASS