Good morning!
Corrective rebound overnight... Corn, soybeans and wheat bounced back from recent losses in a round of corrective buying overnight that was triggered by outside markets. As of 6:30 a.m. CT, corn futures are trading around 4 cents higher, soybeans are mostly 13 cents higher and wheat futures are 9 to 11 cents higher. Front-month crude oil futures are around $1.40 higher and the U.S. dollar index is nearly 300 points lower this morning.
Labor Day schedule... Grain and livestock markets will observe normal trading hours today ahead of the extended holiday weekend. All markets and government offices are closed on Monday, Sept. 5 for Labor Day. As a result, there will be no Pro Farmer market reports and commentary. Grain markets reopen at 7:00 p.m. CT on Monday, Sept. 5 for overnight trade, while livestock markets will resume trade at 8:30 a.m. CT on Tuesday, Sept. 6. Have a safe and enjoyable holiday weekend.
China aggressively booking soybeans... Chinese firms have booked at least 40 cargoes of soybeans from the U.S., Brazil and Argentina in the past two weeks alone, Bloomberg reports, citing people familiar with the transactions. The purchases are to take advantage of improved processing margins, and to rebuild stockpiles ahead of Chinese festivals that run from the autumn through to the Lunar New Year, said the people. Most of the cargoes are for loading in September and October, although some have been booked for next year, they said.
StoneX cuts corn crop forecast, raises soybean estimate... Commodity brokerage firm StoneX lowered its U.S. corn production estimate to 14.168 billion bu. on a yield of 173.2 bu. per acre, down from 14.417 billion bu. and 176.0 bu. per acre in early August. StoneX raised its soybean crop estimate to 4.515 billion bu. on a yield of 51.8 bu. per acre, up from 4.490 billion bu. and 51.3 bu. per acre previously.
Slower jobs growth expected for August... Economists expect the Labor Department to report U.S. non-farm payrolls increased by around 325,000 during August. That would be down from a gain of 528,000 as originally reported for July. The unemployment rate is expected to remain at 3.5%.
Global food prices decline for fifth straight month... The UN Food and Agriculture Organization (FAO) global food price index dropped 1.9% in August – the fifth straight monthly decline but it was still 7.8% above year-ago. All five subindexes declined in August. Compared to year-ago, prices are up 8.2% for meat, 23.5% for dairy and 11.3% for cereal grains, while vegoils are down 1.6% and sugar is 8.4% lower.
FAO sharply cuts global cereal grain production... FAO slashed its 2022 global cereal grain production forecast by 17.2 MMT from last month to 2.774 billion MT amid “persistent drought conditions in northern hemisphere countries.” FAO now forecasts 2022 global cereal grain production down 38.9 MMT (1.4%) from last year.
Brazilian soybean exports slowed, corn shipments surged in August... Brazil exported 6.2 MMT of soybeans in August, according to official data published by the Brazilian government on Thursday, down from 7.5 MMT in July and 6.5 MMT last year. Brazilian corn exports jumped to 7.6 MMT last month, up from 4.1 MMT in July and 4.3 MMT in August 2021.
Russia again lowers wheat export tax... Russia’s wheat export tax for Sept. 7-13 will be 3,368.9 rubles ($55.89) per metric ton based on an indicative price of $329.30. That’s down from a rate of 4,053.8 rubles per metric ton the previous week.
Euro zone PPI surges to record-high... Eurozone producer price inflation continued to accelerate in July, with the producer price index (PPI) surging to a record 37.9% above year-ago levels. Energy costs again made the biggest upward move, surging 97.2% from year-ago. But excluding energy, producer prices still jumped 15.1% annually.
PBOC say it has room for monetary policy moves... China has room to adjust monetary policy as stimulus measures to support the pandemic-hit economy have been restrained and consumer inflation remains under control, a spokesperson for the People’s Bank of China (PBOC) said. China will continue to improve on and deploy its various monetary policy tools to support the economy and keep liquidity reasonably ample. China will pay close attention to inflation at home and abroad, avoid flood-like stimulus and keep consumer prices basically stable.
China on a mission to ensure food security... The strategy of holding its “rice bowl steady,” an urgent priority for Beijing, could be tested in IP lawyers’ offices. Click here to read the Financial Times story.
Xinjiang exports to U.S. hit two-year high despite Uygur Forced Labor Prevention Act... Industry observers are surprised by the leap in reported shipments for July, as many thought the number would plummet to near zero after law took effect in June. Click here for details via South China Morning Post.
China soybean auctions continue... China will auction another 500,000 MT of imported soybeans from state-owned reserves on Sept. 9. China continues to hold the weekly auctions to boost supplies on the domestic market.
Retailers shift beef focus as grilling season winds down... Labor Day weekend marks the unofficial end of the grilling season. Choice beef cutout values fell sharply this week, dipping below $260.00 for the first time since May. This seemingly reflects the usual late-summer grocer switch from a focus on steaks for grilling season to a fall/winter pattern featuring more roasts. But even with the drop in wholesale beef prices, packer margins remain in the black and market-ready supplies of Choice-graded beef are tight, which should limit any extended slide in cash cattle prices.
Cash hog prices continue to fall... The national direct cash hog price fell another $5.06 on Thursday, while the CME lean hog index is down another $1.36 to $106.26 (as of Aug. 31). Falling cash prices are limiting buyer interest in fall- and winter-month hog futures despite bigger-than-normal seasonal discounts already built into those contracts.
Overnight demand news... Exporters reported no tenders or sales.
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. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC