Good morning!
Varied price tone in grains overnight... Wheat futures firmed amid followthrough buying overnight, while soybeans pulled back and corn was caught in the middle. As of 6:30 a.m. CT, corn futures are trading near unchanged, soybeans are mostly a nickel lower and wheat futures are 3 to 4 cents higher. The U.S. dollar index is around 170 points lower and front-month crude oil futures are around 40 cents higher.
Corn, soybean CCI ratings continue late-season slip... USDA rated 65% of the corn crop as “good” to “excellent” and 12% “poor” to “very poor.” The soybean crop was rated 65% “good” to “excellent” and 10% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 1.4 points to 366.8. The soybean crop slipped 1.2 points to 361.8. Both crops remain rated well above year-ago and average for the beginning of September. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of Sept. 1:
· Corn: 65% good/excellent (65% last week); 90% dough (90% average); 60% dented (58% average); 19% mature (13% average).
· Soybeans: 65% good/excellent (67% last week); 94% setting pods (93% average); 13% dropping leaves (10% average).
· Spring wheat: 70% harvested (70% average).
· Cotton: 44% good/excellent (40% last week); 95% setting bolls (94% average); 37% bolls opening (31% average).
ENSO-neutral conditions to continue for now but La Niña building... Sea surface temperatures (SSTs) in the central equatorial Pacific Ocean are ENSO-neutral. The Australian Bureau of Meteorology says three of seven climate models suggest SSTs in the tropical Pacific will exceed the La Niña threshold from October, while the remaining four signal SSTs are likely to remain at ENSO-neutral through the southern hemisphere spring (northern hemisphere fall).
Indonesia considers lowering palm oil export levy... Indonesia is planning to reduce its palm oil export levy to enhance competitiveness amid growing pressure from large global supplies of soybean and sunflower oils, which have become more price competitive. Dida Gardera, a senior official at the Coordinating Ministry of Economic Affairs, said the move aims to improve smallholders’ welfare and palm oil’s price advantage. Currently, the export tax ranges from $55 to $240 per metric ton, with the government considering simpler price brackets for the levy system.
East, Gulf coast dockworkers begin wage talks today amid strike threat... The union representing East and Gulf Coast dockworkers is meeting in New Jersey for two days of wage negotiations with port employers, under the looming threat of a strike that could disrupt trade from Houston to Boston. Talks between the International Longshoremen’s Association and the United States Maritime Alliance have stalled since June, affecting nearly 45,000 workers. The union is seeking an 80% wage increase over six years, significantly higher than what West Coast dockworkers received. With the Sept. 30 deadline approaching, U.S. retailers are urging the White House to intervene to avoid a potential economic fallout.
White House seeks Ukraine aid, transition funds in stopgap spending bill... The Biden administration is urging Congress to include several key provisions in a stopgap funding bill to avoid a government shutdown on Oct. 1. The requests include additional funds for Navy shipbuilding, preparation for the presidential transition and extended benefits for Ukrainian refugees. The White House also seeks to prevent doubling rescissions of unspent funds from previous legislation and calls for nearly $8 billion in presidential authority to support Ukraine and Israel. Of note: The request says “Language is needed to extend authorities for the Livestock Mandatory Reporting program, which expires on Sept. 30, 2024. Without the anomaly, livestock market participants would no longer be required to report price and supply information, which facilitates market competition through open and transparent price discovery.” Meanwhile, some farm-state lawmakers want to attach a one-year extension of the 2018 Farm Bill to the stopgap measure, but others oppose that move, saying the “real” deadline is at the end of this Congress.
China weighs cutting mortgage rates to shield banks... China is considering cutting interest rates on as much as $5.3 trillion of mortgages in two steps to lower borrowing costs for millions of families while mitigating the profit squeeze on its banking system. Financial regulators have proposed reducing rates on outstanding mortgages nationwide by a total of about 80 basis points, part of a package that includes an accelerated timeline for when mortgages become eligible for refinancing, people familiar with the matter told Bloomberg. The first cut may come in the next few weeks while the second move would take effect at the beginning of next year, said the people.
Euro zone business activity gets Olympic boost... Euro zone business activity received a boost from France hosting the Olympic Games last month but the malaise in the bloc is likely to return once the Paralympics wraps up as demand remains weak. HCOB’s composite purchasing managers index (PMI) compiled by S&P Global rose to 51.0 in August, the strongest performance in three months and the sixth straight month of expansion. Meanwhile, euro zone producer prices ease to 2.1% under year-ago, the least since producer price deflation started in May 2023.
Strong start to the week for wholesale beef trade... Wholesale beef prices firmed $1.33 for Choice to $310.67 and $4.29 for Select to $300.11 on Tuesday, while movement totaled 105 loads. September is typically a seasonally weak period for beef demand as retailers gear up for pork features in October, but the wholesale market has given no signs of an extended breakdown.
Pork cutout firms, too... The pork cutout firmed $1.59 on Tuesday as all cuts firmed, led by more than $2.00 gains in primal bellies, hams and ribs. Movement was strong at 337.4 loads, suggesting retailers are gearing up for October pork month features.
Overnight demand news... Taiwan purchased 101,700 MT of U.S. milling wheat. South Korea purchased 65,000 MT of optional origin feed wheat, excluding Russia, Argentina, Pakistan, Denmark and China. Japan tendered to buy 65,000 MT of feed wheat and 25,000 MT of feed barley. Thailand tendered to buy 120,000 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
· 8:00 a.m. Food Security in the U.S. — ERS
· 8:00 a.m. Food Security in the United States — ERS
· 8:00 a.m. Household Food Security in the United States in 2023 — ERS
· 8:00 a.m. Statistical Supplement to Household Food Security in U.S. in 2023 — ERS
· 2:00 p.m. Broiler Hatchery — NASS