Good morning!
Beans firmer, corn and wheat weaker to start the week... Soybeans posted corrective gains during overnight trade, while corn and wheat mildly favored the downside. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 6 to 7 cents higher and wheat futures are 1 to 2 cents lower. The U.S. dollar index is up around 500 and front-month crude oil futures are about 50 cents higher this morning.
Another dry week ahead across Midwest... A drier bias will continue across the Midwest for the next 10 days, according to World Weather Inc. Rains will also be limited in the Plains, though scattered showers are possible in central and northern areas of the region next week. A strong disturbance in the western Gulf of Mexico is becoming better organized and should reach hurricane intensity prior to reaching the Louisiana coast late Wednesday. That could bring heavy rains into the Delta and Southeast.
South America’s rivers hit record lows... The Paraguay River fell to a record low in Paraguay’s capital Asuncion, with water levels depleted by a severe drought upriver in Brazil. The Parana River in Argentina is also low around the grain export hub at Rosario. Both the Paraguay and Parana rivers start in Brazil and are important routes for soybeans, corn and other trade. Low water levels are affecting shipments, though the impact was capped as it is not peak export season.
IKAR cuts Russia’s wheat production, export forecasts... IKAR agricultural consultancy cut its forecast for Russia’s wheat crop to 82.2 MMT from 83.8 MMT. The firm now expects Russia to export 44 MMT of wheat in 2024-25, down 500,000 MT from its prior outlook.
Ukraine’s wheat quality low, millers seek export curbs... Ukraine’s government and exporters agreed earlier this month to limit wheat exports to 16.2 MMT in 2024-25, though the deal did not specify what kind of wheat could be exported. Brokers, millers, traders and ministry officials expect the share of milling wheat to be between 30% and 45%, below the historical norm. As a result, the Ukrainian millers association said milling quality wheat exports should be limited to 30% of the total. Early season shipments have focused on milling wheat. Of the 3.3 MMT of wheat exported in the first two months of the marketing year, the share of milling wheat was 1.9 MMT, or about 58%. Ukrainian officials have indicated they are ready to discuss more serious measures to restrict milling wheat exports when the volume of such shipments exceeds 3.5 MMT.
APK-Inform raises Ukraine’s wheat export forecast, cuts corn... Analyst APK-Inform increased its forecast for Ukraine’s 2024-25 wheat exports to 13.8 MMT from 13.4 MMT previously. It revised down the country’s corn export outlook to 22.5 MMT from 23 MMT.
China officially starts begins anti-dumping probe into Canadian canola... China announced the start of a one-year anti-dumping investigation into imports of canola from Canada. The inquiry will examine imports from Jan. 1 to Dec. 31, 2023, the commerce ministry said, adding that preliminary evidence and information show dumping had taken place. The probe will also examine industrial damage from these Canadian imports covering the period from Jan. 1, 2021, to Dec. 31, 2023. The investigation will start immediately and should be completed before Sept. 9, 2025, although it may be extended for another six months under special circumstances, the ministry said.
China deflation concerns grow... China’s consumer price index (CPI) rose 0.6% from year-ago in August, the highest reading since February and the seventh straight month of consumer inflation. Food prices jumped 2.8%, the first increase since June 2023, while non-food inflation eased to 0.2%. Core CPI, minus food and energy prices, rose just 0.3% in August, the least since March 2021. Taken together, the figures provide further evidence of weak consumer demand. China’s factory gate prices fell 1.8%, marking the 23rd straight month of producer deflation due to persistently weak domestic demand and the downward trend of some global commodity prices.
The week ahead in Washington... A presidential debate between Kamala Harris and Donald Turm will be Tuesday evening. Congress returns for a packed three-week work period before hitting the campaign trail in October. With the Sept. 30 deadline approaching, lawmakers are working to avoid a government shutdown by negotiating a fiscal year (FY) 2025 funding deal. House Republicans plan to vote on a partisan stopgap measure that extends funding through March 2025, and mandates proof of citizenship for voter registration. However, internal GOP divisions and Democratic opposition could push for a short-term agreement extending into the lame-duck session. Besides FY 2025 funding, Congress must address key authorizations for national defense, farm bill programs and water resources projects. Key economic data this week includes consumer inflation on Wednesday and producer prices on Thursday. USDA will release its Crop Production and Supply & Demand Reports on Thursday, which will include updated estimates for corn and soybeans.
Groups urge action on farm bill, guidance for SAF tax credit... Over 300 state and national groups sent a letter urging lawmakers to act on a new farm bill this year, warning that delays could harm producers facing economic challenges. While the official deadline is Sept. 30, key commodity programs expire by year’s end, making timely passage crucial. Reps. Tracey Mann (R-Kan.) and Marcy Kaptur (D-Ohio) spearheaded a letter, with support from 39 other lawmakers, urging the Treasury Department to expedite final guidance for a sustainable aviation fuel (SAF) tax credit. The letter urges Treasury to expedite the issuance of final guidance for the Clean Fuel Production Credit in advance of its Jan. 1 deadline and to restrict the eligibility to renewable fuels made from domestic feedstocks by domestic fuel producers.
Trump vows 100% tariffs on nations moving away from U.S. dollar... At a Wisconsin rally, Donald Trump vowed to impose a 100% tariff on nations abandoning the U.S. dollar in trade, intensifying his protectionist stance. Trump, the Republican presidential nominee, framed the dollar as being “under major siege” and said he aims to maintain its global dominance. Trump’s comments follow discussions of penalizing countries, including allies, for engaging in non-dollar bilateral trade. Despite declining influence, the U.S. dollar remains the world’s top reserve currency, accounting for 59% of global reserves in early 2024.
U.S. dockworkers poised for potential strike as contract deadline looms... The International Longshoremen’s Association (ILA), the largest U.S. dockworkers’ union, is preparing for its first strike in 50 years at East and Gulf Coast ports, as contract negotiations stall. With three weeks until the current contract expires, no talks are scheduled. ILA demands a 77% pay increase over six years, far exceeding the 32% wage gains secured by West Coast dockworkers last year. Shipping executives are increasingly pessimistic about avoiding a strike, which could further strain the U.S. economy. Of note: The union warns it may also undertake damaging work slowdowns if the Biden administration intervenes.
U.S. confirms first H5N1 case with no known animal exposure... A Missouri resident has been confirmed as the first case of the H5N1 virus with no known exposure to sick animals, according to the CDC. The individual, who was hospitalized and has since recovered, had no work-related contact with animals. The infection was identified through routine flu surveillance, rather than the targeted H5N1 program typically used for farm workers. This marks a shift in how the virus is being monitored and may indicate new patterns of transmission.
Cash cattle market looking for short-term bottom... Cash cattle prices dropped for the sixth consecutive time last week, which fueled a late-week selloff in cattle futures. Despite futures holding big discounts to the cash market, traders will want to see cash prices stabilize before they return as active buyers.
Cash hog index drops, pork cutout rebounds... The CME lean hog index is down 19 cents to $86.24 as of Sept. 5, snapping a two-day uptick. The pork cutout firmed $1.23 to $96.10 on Friday, snapping three consecutive daily price declines.
Weekend 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
· 10:00 a.m. Weekly Export Inspections — AMS
· 3:00 p.m. Crop Progress — NASS