Good morning!
Firmer price tone overnight... Corn, soybeans and wheat firmed amid corrective buying during overnight trade. As of 6:30 a.m. CT, corn futures are trading 2 to 4 cents higher, soybeans are 3 to 10 cents higher, SRW wheat futures are 3 to 4 cents higher, HRW wheat is 6 to 8 cents higher and HRS wheat is 7 to 9 cents higher. Front-month crude oil futures are nearly $2.00 higher and the U.S. dollar index is modestly lower.
China imports first corn from South Africa... China received its first cargo of corn from South Africa this week, Xinhua News reported. A 53,000-MT cargo was purchased by state-owned grain trader COFCO and will be sold to domestic feed makers. Between March 25 and April 14, 108,104 MT of corn shipments left South African ports destined for China.
Ukrainian grain shipments slowing amid uncertainty of deal extension... The pace of shipments from Ukraine via the Black Sea grain deal has slowed amid concerns ships could be stalled if a deal is not renewed, Reuters reported, citing to sources and shipping data. The number of ships coming in to pick up cargoes has dropped this week to two vessels per day from three to four ships on average daily in the past three weeks, data from the joint coordination center showed. Danish shipping group NORDEN, which is active in transporting grains, is among companies not sending ships into the region. “We are not participating in that trade at the moment... It is a risky area – it is very hard to predict what will happen,” NORDEN’s Chief Executive Jan Rindbo told Reuters. There are currently 107 forward grain orders for ships in the market, with 94 for May and only a few orders for the forward months, Shipfix data showed. Insurance for ships going into the grain corridor has remained stable for now.
Global food prices end year-long decline... The UN Food and Agriculture Organization global food price index inched up 0.8% in April, ending a 12-month string of declines, but was 19.7% below year-ago. The slight monthly increase was led by a strong increase in sugar prices, along with smaller gains in meats, while cereal grains, dairy and vegoils continued to drop. Compared to year-ago, prices were down 6.1% for meat, 15.1% for dairy, 19.8% for cereal grains and 45.3% for sugar, while vegoils dropped 23.0%.
Sugar prices expected to continue rising... The jump in sugar prices is expected to continue amid a tightening in global supply. Packaged-food makers that use sugar as a main ingredient might need to implement price hikes to offset high-input costs and alleviate margin pressure, Bloomberg Intelligence says.
Slowdown in jobs growth expected... Economists polled by Reuters expect the Labor Department to report non-farm payroll increased 180,000 in April, which would be the smallest jobs creation since January 2021. The unemployment rate is expected to tick up to 3.6%.
Debt-limit update... The prospect of a short-term fix to head off the crisis of a default on federal debt is on the table, the White House said ahead of President Joe Biden’s meeting with congressional leaders next week. Biden, who meets Tuesday with Speaker Kevin McCarthy (R-Calif.) and other leaders of both parties, said he wants a clean increase in the federal debt limit, and won’t negotiate that point with Republicans. But White House Office of Management and Budget Director Shalanda Young said that doesn’t mean a short-term fix couldn’t be discussed if Republicans first take the threat of default off the table. Besides McCarthy, Biden is set to meet with House Minority Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.) for the first time amid GOP demands for deep cuts in domestic spending programs in exchange for a debt limit increase. Biden continues to say he will only discuss spending cuts once a crisis is averted.
Manchin applauds speedier FERC permits to boost grid reliability... The Federal Energy Regulatory Commission (FERC) will continue to move faster to rule on natural gas projects and revamp electric grid planning, acting chair Willie Phillips told lawmakers at a Senate hearing. That drew praise from Sen. Joe Manchin (D-W.Va.). Meanwhile, Senate Republicans are proposing two energy permitting bills and hoping to get their Democratic colleagues on board. The legislation from Sens. Shelley Moore Capito (R-W.Va.) and John Barrasso (R-Wyo.) would truncate deadlines for environmental reviews, accelerate permitting for infrastructure and transportation projects, and authorize a long-delayed natural gas pipeline in West Virginia.
China considering pork purchases to support prices... China’s state planner will hold discussions with other departments about a new round of pork purchases for state reserves in an effort to support hog prices, it said on Friday. Prices were below 15 yuan ($2.17) per kilogram last month, data from Shanghai JC Intelligence Co. shows, pressured by excess supply. In Cangzhou, Hebei, one of the main hog-trading locations in northern China, hog prices have slumped 44% since last October.
Wholesale beef holding up... Choice boxed beef prices firmed 43 cents on Thursday while Select rose 37 cents and movement picked up to 129 loads. Though Choice beef has slipped $1.92 from its recent high, the market is holding up well considering the Choice beef/pork cutout ratio remains high at 3.9.
Cash hogs climbing, pork cutout struggling... The CME lean hog index rose another 46 cents, marking gains in six of the last eight days. Today’s quote of $74.24 (as of May 3) is $3.06 off the April low and the highest since the first trading day last month. The pork cutout value firmed a nickel on Thursday, but prices are struggling to pull away from the low-$80 range despite being cheap compared to beef.
Overnight demand news... Taiwan purchased 52,225 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
- 7:30 a.m. Employment Data — BLS
- 10:00 a.m. Livestock and Meat International Trade Data — ERS
- 2:00 p.m. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC