Good morning!
Soybeans weaker, wheat firmer... Soybeans continued their Friday losses overnight. Wheat futures were trading higher. Corn was mixed. As of 6:30 a.m. CT, corn futures are trading fractionally higher to 2 cents lower, soybeans are 13 to 18 cents lower and wheat futures are 9 to 13 cents higher. Crude oil futures were trading $4.00 lower this morning. The U.S. dollar index was up about 400 points after setting a two-year high.
Indonesian officials clarify palm oil export ban... Indonesian government officials told palm oil companies an export ban it announced last week would cover shipments of refined, bleached, deodorized palm olein but not crude palm oil, Reuters reported. On Friday, Indonesia announced the palm oil export ban would start on April 28.
Record soyoil prices ‘mixed blessing’ in Argentina... Argentine farmers are unlikely to take full advantage of record soyoil prices due to drought, a recent export tax hike and subsidies to keep domestic prices low. Drought has cut some of Argentina’s soybean production this year. The government recently increased its soyoil and meal tax from 31% to 33% and there are some export quotas to help rein in domestic prices. Industry analysts explained the country’s soy crushing in March had been 2.93 MMT, 14% below last year. The country has commitments of 305,100 MT of soyoil to be shipped between April 20 and May 10, 25% behind last year.
China halts wheat reserves auctions... China has stopped its weekly wheat auctions from state reserves, earlier than last year when stocks were higher, traders and analysts said. China suspended wheat sales from its reserves last week and did not release any auction results on Monday. China had been releasing only around 500,000 MT of wheat from the reserves in weekly auctions recently, compared with 4 MMT at some auctions in 2021. Auctions last year did not stop until May 10, and more than 27 MMT of wheat was sold from the reserves.
Revised cattle price act ‘huge burden on Southern Plains’... Texas A&M agricultural economists say the Revised Cattle Price Discovery and Transparency Act of 2022 would place a “huge burden on the Southern Plains.” The report estimates that an additional 2.3 million head of cattle will be required to be marketed via negotiated sales. “It is still a significant burden that falls largely on the Southern Plains,” they said about the increased negotiated sales. The economists said the bill is so open-ended that the analysts couldn’t (or chose not to) attempt a cost estimate for the bill. It could easily cost way more than the earlier version.
USDA approves faster line speeds at pork plant... USDA’s Food Safety and Inspection Service (FSIS) on Friday announced it approved the Clemens Food Group pork packing plant in Coldwater, Michigan, to run faster line speeds under a one-year trial program. The agency now has let four plants operate with faster harvesting line speeds, which could increase packing capacity and alleviate supply issues in the face of strong pork demand, according to NPPC.
Mexico detects bird flu near the Texas border... Mexico’s agriculture ministry reported the outbreak of highly pathogenic H7N3 bird flu virus at two chicken farms in the northern state of Coahuila, which borders Texas. The strain has existed in some regions since 2012, the ministry said. Officials have quarantined the farm affected and ordered the culling of 70,000 chickens to contain the spread.
Argentine farmers protest in Buenos Aires... Over the weekend, thousands of Argentine farmers protested in Buenos Aires against President Alberto Fernandez, whose policies to contain food prices to curb rampant inflation have been criticized by the agricultural sector. Farmers were protesting higher taxes. A specific organization did not organize the protest.
Ag minister: Argentina won’t increase taxes on agriculture... Argentina’s Agriculture Minister Julian Dominguez sought to reassure the public that export taxes won’t be increased in the agricultural sector, as a protest Saturday by the nation’s grain delivery trucks got underway. “We have a permanent working relationship with the entities of the sector,” Dominguez told Clarin newspaper from Israel, where he’s on a scientific and technological official mission. “We’re working with the agenda of the issues.” About 4,300 trucks lined up to enter Argentina’s grain ports on Saturday, fewer than the daily average of more than 6,000, agency AgroEntregas said on Twitter.
Russia/Ukraine update... Ukrainian President Volodymyr Zelenskyy met top U.S. officials (U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin) in Kyiv Sunday as heavy fighting continues in the east and south of the country. Ukrainian officials acknowledged that Russian forces seized 42 small towns in their initial drive this week to seize eastern Ukraine, the N.Y. Times reports. Rustam Minnekayev, a senior Russian military official, publicly said Russia aims to take full control of not just eastern Ukraine but also the south. The general said that would open the way to Moldova, which shares a border with Ukraine. Meanwhile, the United Nations secretary-general, António Guterres, announced that he will meet Russia’s president, Vladimir Putin, in Moscow this Tuesday. Blinken confirmed that the U.S. would reopen its embassy in Ukraine.
Chinese oil demand weakens...China’s oil demand is on pace to slide 20% this month. Gasoline and jet fuel are also seeing declines as the country orders massive lockdowns under its zero-tolerance approach toward the spread of the coronavirus.
No EU Russian oil ban... The EU’s top diplomat said there was insufficient support from member states for a complete embargo on Russian oil and gas imports. Speaking to Die Welt, a German newspaper, Josep Borrell said, “we in the EU do not have a unified position.” The issue will be discussed at the next EU summit, due to take place at the end of May.
The week ahead in Washington... Lawmakers return from their two-week Easter recess. The Senate Ag Committee reviews a revised Cash Cattle Mandate Senate bill on Tuesday. On Wednesday, the House Ag panel will hear from the CEOs of four major meatpackers. The U.S. Army Corps of Engineers will have its FY2023 House budget hearing on Wednesday. USDA, Departments of Energy and Transportation will have FY 2023 budget hearing on Thursday. EPA has its FY 2023 budget hearing on Friday. The Surface Transportation Board will hold rail shipping hearings Tuesday and Wednesday. On Thursday, the Bureau of Economic Analysis (BEA) releases its advance estimate for first-quarter GDP. The March’s Personal Consumption Expenditures (PCE) index and the consumer sentiment report are released on Friday.
Bearish USDA report data for cattle market... USDA’s Cattle on Feed Report last Friday was bearish, as the April 1 feedlot inventory and March placements both topped the highest pre-report estimates. That will weigh on the market to open the week. The report showed the April 1 feedlot inventory up 1.7%, while placements dropped only 0.4% versus expectations for a 7.8% decline. The Cold Storage Report also showed March beef inventories rose to a record 536.9 million lbs. for the month.
Pork stocks climbed contra-seasonally in March... USDA’s Cold Storage Report showed pork stocks at 487.2 million lbs. at the end of March, up 7.3 million lbs. from February. Over the previous five years, pork stocks declined an average of 18.6 million lbs. during March. Pork inventories were still 79.4 million lbs. (14.0%) under the five-year average, so the data shouldn’t be see as too bearish.
Weekend demand news... Algeria tendered to buy a nominal 50,000 MT of optional origin durum 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 Price Outlook — ERS
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Peanut Stocks and Processing — NASS
- 2:00 p.m. Poultry Slaughter — NASS
- 3:00 p.m. Crop Progress — NASS