Good morning!
Beans firmer, wheat mixed and corn weaker this morning... Soybeans mildly extended this week’s corrective gains overnight, while wheat posted two-sided trade and corn weakened. As of 6:30 a.m. CT, corn futures are trading a penny lower, soybeans are 3 to 5 cents higher, SRW wheat is fractionally to a penny higher, HRW wheat is a penny lower and HRS wheat is fractionally lower. The U.S. dollar index and front-month crude oil futures are modestly lower this morning.
July 4th holiday schedule... Grain and livestock markets will trade normal hours today. All markets and government offices are closed on Thursday, July 4, for the Independence Day holiday. Grain and livestock markets resume trading at 8:30 a.m. CT on Friday, July 5. We will only send out two reports Friday – “First Thing Today” around 8:00 a.m. CT and “After the Bell” briefly highlighting the day’s price action after the closes. Happy Fourth of July from your Pro Farmer staff.
Food prices worrying central banks... Climate change is causing permanent shifts in weather patterns, which are negatively impacting crop yields, according to the Financial Times. This is evident in various regions, such as oranges in Brazil and coffee in Vietnam. These reductions in supply are driving up food prices. What was once seen as temporary price increases are now becoming a long-term source of inflation, creating concerns for central banks.
Canada trying to slow China EV access... The Canadian government is considering several measures to deter Chinese-made electric vehicles (EVs) from accessing the Canadian market. These measures include imposing tariffs on imported Chinese EVs and blocking Chinese investment in new Canadian factories. The options are part of a broader strategy to protect Canada’s EV industry from what the government describes as unfair competition due to China’s state-directed policies, which include significant subsidies and lower production costs due to lax labor and environmental standards.
China launches first SAF center... The Civil Aviation Authority of China (CAAC) launched the country’s first technical center for sustainable aviation fuel (SAF) that focuses on standard setting and product research. The center, based in the southwestern city of Chengdu, will take the lead in mapping out industry policy and setting standards for products and quality control, two SAF industry executives with direct knowledge of the launch told Reuters. China is expected to unveil this year its policy on the use of SAF for 2030 that could spur billions of dollars of investment. The country currently does not produce SAF commercially for domestic use.
More payment woes tied to China’s property sector... A Chinese online financing company has failed to pay investors who bought equity-backed products partially underpinned by projects linked to China Vanke Co., people familiar with the matter told Bloomberg. Shenzhen-based Penging, which is partially owned by Vanke, used revenue from real estate projects related to the developer as underlying assets for products it then sold to some Vanke staff. Investors failed to receive payments starting a few months ago, the people said.
Yen continues to weaken, but no signs of intervention... The Japanese yen hit a fresh 38-year trough against the U.S. dollar and a record low to the euro on Wednesday. Despite the downward grind, Japanese authorities have been largely quiet on the yen this week, with Finance Minister Shunichi Suzuki only commenting on Tuesday that moves were being watched vigilantly. He refrained from repeating the oft-used warning that the ministry stood ready to act.
Euro zone PMI didn’t slow as much as initially thought... The euro zone composite purchasing managers index (PMI) compiled by S&P Global fell to 50.9 in June from a 12-month high of 52.2 in May, though it was above the preliminary estimate of 50.8. Solid expansion in the services sector failed to offset further weakening in manufacturing.
Euro zone producer deflation eases... Producer prices in the euro zone declined 4.2% annually in May, the smallest decline since June 2023. That still marked a 13th straight month of annual producer price deflation. Excluding energy, prices dropped 0.4%.
China’s beef prices plunge... Chinese wholesale beef prices have dropped 18% from last year’s peak to around 62 yuan ($8.53) a kilogram as supplies outpace demand. Beijing pushed farmers to increase domestic beef production and also encouraged more imports. But the slowing economy has dragged local prices to a five-year low as supplies pile up in frozen storage.
Awaiting cash cattle trade... Despite Thursday’s holiday, there appears to be no urgency for packers to actively seek cattle via higher bids again this week. And following three weeks of record cash trade, feedlots are not looking to move cattle at lower prices. Unless the gridlock breaks today, it appears this week’s cash cattle activity will take place Friday – and it’s possible trading volume will be light.
Wholesale pork market remains weak... The pork cutout dropped $1.09 on Tuesday, despite firmer primal belly prices, as all other cuts except picnics declined. Movement remained light at 262.8 loads. Weak retailer demand for pork and abundant supplies are causing packers to reduce wholesale prices.
Overnight demand news... Japan tendered to buy 65,000 MT of feed wheat and 25,000 MT of feed barley. Tunisia tendered to buy 100,000 MT of optional origin soft milling 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
· 9:30 a.m. Weekly Ethanol Production — EIA
· 2:00 p.m. Broiler Hatchery — NASS
· 2:00 p.m. Dairy Products — NASS