Good morning!
Grains firmer overnight... Corn, soybeans and wheat rebounded from losses the two previous days during the overnight session. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents higher, soybeans are 2 to 5 cents higher and wheat futures are 10 to 13 cents higher. Front-month crude oil futures are around 60 cents higher and the U.S. dollar is about 175 points higher.
Exchange further cuts Argentine corn crop estimate... The Rosario Grain Exchange cut its Argentine corn crop estimate by 2.5 MMT to 47.5 MMT amid leafhopper damage that causes corn stunt disease. It said the disease has damaged around 20% of the country’s corn crop this year and under normal conditions, production should have topped 61 MMMT. The exchange left its Argentine soybean crop estimate at 50 MMT, though it noted rains have slowed harvest.
Argentine strike today... Argentina’s oilseed union SOEA will join a national one-day strike today alongside other unions who upset over proposed labor reforms backed by President Javier Milei.
Three Russian regions declare emergency from cold blast... Three of Russia’s key grain-producing regions declared a state of emergency, citing May frosts that have caused severe damage to crops. The central regions of Lipetsk, Voronezh and Tambov – part of Russia’s fertile Black Earth region – imposed emergency measures. In mid-April, Russia’s ag ministry forecast the 2024 grain crop may drop to 132 MMT from 144.9 MMT in 2023, with a further reduction now expected. Russia will provide “all necessary resources” for farmers in regions hit by killing frosts/freezes to re-sow crops, state news agency TASS quoted the agriculture ministry as saying.
Weekly Export Sales Report out this morning... For the week ended May 2, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 600,000-1,100,000 | 758,466 | 0-150,000 | 33,658 |
Wheat | (100,000)-100,000 | (20,298) | 200,000-600,000 | 406,911 |
Soybeans | 250,000-600,000 | 413,997 | 0-100,000 | 7,000 |
Soymeal | 100,000-300,000 | 131,012 | 0-100,000 | 3,448 |
Soyoil | (5,000)-12,000 | 7,195 | 0 | 0 |
China’s April soybean imports surge... China imported 8.57 MMT of soybeans in April, a record for the month. Imports jumped 54.7% from March and were 18.0% above year-ago, fueled by plentiful supplies from Brazil and improved demand from the hog sector. But China’s imports during the first four months of 2024 at 27.15 MMT fell 2.9% from the same period last year.
Upbeat Chinese April trade data signals demand recovery... China’s exports rose 1.5% from year-ago in April to a three-month high of $292.45 billion, rebounding from a 7.5% drop in March and signaling improved global demand. Imports climbed 8.4% to $220.10 billion, up sharply from the 1.9% drop in March, amid a rebound in domestic demand amid various support measures from Beijing. That left China with a $72.35 billion trade surplus, up from $58.55 billion in March. The trade surplus with the U.S. increased to $27.2 billion in April from $22.94 billion the previous month. For the first four months of the year, China registered a surplus of $255.66 billion, with exports advancing 1.5% to $1.1 trillion while imports rose 3.2% to $843.91 billion.
Embattled Chinese property developer to pay missed coupons by next week... Chinese property developer Country Garden said it was unable to pay two onshore coupons due today, but China Bond Insurance Co. would do so on its behalf if it missed paying within a grace period that ends next week. Such a move would be the first time the state-owned company has come to the rescue of an issuer under a Beijing-led program launched in 2022. Country Garden aims to make the payment and additional interest incurred by May 13, within the grace period of five working days.
BOE keeps interest rates unchanged... The Bank of England (BOE) kept its benchmark lending rate at 5.25%, saying it needed more evidence inflation will remain low before cutting rates. BOE said it will closely monitor upcoming data “to understand whether the risks of persistent inflation are diminishing.” In its updated economic projections, BOE projects a decline in inflation to 2.6% in a year and 1.9% in two years, down 0.2 point and 0.4 point, respectively, from prior forecasts. The economic growth forecast for the UK was revised up to 0.5% this year from 0.25% previously.
Farm bill update... House GOP farm bill papers will be released today or Friday. A meeting between Senate Ag Chair Debbie Stabenow (D-Mich.) and House Ag Chair Glenn “GT” Thompson (R-Pa.) was postponed as the House exited Washington early.
USDA requests info on development of H5N1 vaccine for use in cattle.... USDA’s Animal and Plant Health Inspection Service (APHIS) issued a request for information concerning the development of a vaccine against the H5N1 virus for use in cattle. This request seeks to gather insights from manufacturers about their ability to develop, license and manufacture a vaccine that meets U.S. standards for safety and efficacy. This represents a significant step in addressing the spread of H5N1, particularly concerning its potential impact on cattle. It also underscores ongoing efforts to broaden preventive measures against the virus beyond the traditional focus on poultry, acknowledging the complex interconnections within animal health and public safety.
China’s meat imports drop in April... China imported 544,000 MT of meat in April, down 5.9% from the previous month and 8.5% less than last year. Through the first four months of this year, China imported 2.22 MMT of meat, down 12.6% from the same period last year.
Slow developing cash cattle trade... Packers have bought a limited amount of cash cattle at mostly steady prices, though they haven’t been aggressive with bids and feedlots are in no hurry to move cattle unless prices rise from week-ago. Unless there’s a shift from either side in cash negotiations, it appears active trade won’t likely develop until Friday.
Cash hog fundamentals strengthen... The CME lean hog index is up 25 cents to $91.28 as of May 7 as it continues to hold just under the short-term top posted in late April. The pork cutout value firmed $2.20 on Wednesday, fueled by a $6.42 rise in bellies and a $4.67 gain in loins. Those two cuts continue to be volatile and the primary drivers of daily price moves for the cutout.
Overnight demand news... South Korea purchased 65,000 MT of corn to be sourced from the U.S., South America or South Africa. Japan purchased 114,077 MT of milling wheat via its weekly tender, including 46,592 MT from the U.S., 35,090 MT from Canada and 32,395 MT from Australia. Egypt purchased 420,000 MT of wheat – 360,000 MT from Russia and 60,000 MT from Romania.
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. Weekly Export Sales — FAS