Good morning!
Grain and soy futures higher, despite dollar strength… Corn futures held within yesterday’s trading range overnight and the market is 3 to 4 cents higher as the overnight session winds down. Soybean futures saw two-sided action overnight, but the market is currently trading high-range and up 1 to 3 cents. Winter wheat futures are 3 to 7 cents higher, while spring wheat futures are up 1 to 3 cents. Crude oil futures are lower after yesterday’s surge to the upside. The U.S. dollar index has climbed to its highest level since November 2020.
CHS’s Myrtle Grove terminal reopens… The cooperative CHS Inc. has resumed operations at its Myrtle Grove, Louisiana grain export terminal, the farmer-owned company announced yesterday. This comes after a month-long closure due to damage from Hurricane Ida. CHS reports the facility is operating on generator power for now, but it expects utility power to be restored by late next week. The facility is one of the last major grain export terminals to reopen.
ANEC pares its Brazilian soybean and corn export outlooks for September… Brazil will likely export 4.735 MMT of soybeans this month, forecast the grain exporters association ANEC, which is 306,000 MT lighter than its forecast the week prior. The association also lowered its outlook for September corn exports from 2.779 MMT to 2.525 MMT.
Cyclone damages Indian crops… Tropical Cyclone Gulab has damaged India’s summer crops like soybeans, cotton, pulses and vegetables just before harvest. The cyclone made landfall on the country’s east coast Sunday and brought heavy rains to the southern states of Andhra Pradesh and Telangana and western states of Maharashtra and Gujarat. Maharashtra is India’s second largest producer of soybeans, cotton and sugar cane and the top producer of summer-grown pulses. World Weather Inc. reports most areas in the path of the Gulab received 3” to 7” of rain, but areas along the coast like Andhra Pradesh received more than 12 inches. Cotton is in its open-boll stage, leaving it vulnerable to quality decline and some production loss. Another tropical disturbance could impact southern India this weekend, reports World Weather. The late monsoon season rain does set the stage for a good winter planting season.
India launches new rice variety that will slash the crop’s water needs… Indian Prime Minister Narendra Modi yesterday launched several new high-yielding crop varieties, including a herbicide tolerant rice that can be sown directly into the soil. Conventional rice cultivation requires farmers to sow seeds in nurseries and then wait nearly a month to manually transplant the seedlings into plantation fields that are ankle-deep in water. With the new seeds, farmers only need to irrigate the fields once to moisten the soil before planting rice. The new rice variety is expected to cut water use by at least 50% to 60%. It’s also expected to cut down on herbicide use, as the new variety is resistant to a common, inexpensive herbicide. India is the world’s second largest rice producer and its largest rice exporter.
EU’s soft wheat exports well ahead of year-ago… So far this marketing year, the European Union has exported 6.95 MMT of soft wheat, a 36.5% leap from last year at this time, according to data from the European Commission. Its barley exports are also running a bit ahead of year-ago at 2.37 MMT. Of note, the commission says it has been missing figures from France since Aug. 12 and from Italy since Sept. 10.
Senate preparing ‘clean’ stopgap spending measure to fund government agencies until Dec. 3… Funding for the government runs out Thursday at midnight ET. There is bipartisan support for the approach. If the Senate clears the measure today, the House could take it up either today or sometime Thursday to avoid a partial government shutdown. Iron Dome funding is NOT part of the measure. It still includes $6.3 billion to help relocate Afghan refugees and $28.6 billion to address natural disasters including Hurricane Ida ($10 billion for ag disasters). If that measure clears, the only real lingering congressional deadline would be suspending the debt limit. Treasury Secretary Janet Yellen says that must happen by Oct. 18; others have later assessments. Both the traditional and social/climate change infrastructure measures have no deadlines except self-imposed ones, which have already slipped.
Argentina lifts cap on beef exports… After months of pressure and an eye-opening congressional primary election, the Argentine government finally lifted its cap on beef exports that had limited shipments to 50% of normal volumes. The country plans to restart exports on Monday, Argentina’s new ag minister, Julian Dominguez, said after a meeting with four main ag associations. China has been the country’s main customer, accounting for 75% of Argentina’s total beef exports last year.
Beef market still looking for a low… Choice boxed beef values fell $1.14 and Select edged 3 cents lower, with movement improving to 155 loads yesterday. The pace of the decline has slowed in recent days, giving the market some hope a low may lie in the near future. Cash market prospects are likely limited until the product market improves. So far, there has just been a light test from $122 to $123 in Iowa, Nebraska and Kansas, with Texas seeing a light test at $124. Those prices are steady with trade the week prior.
Hogs rallying amid lower supply outlook… There was some followthrough buying in lean hogs after Monday’s surge to the upside. Last Friday’s Quarterly Hogs & Pigs Report painted a much more bullish supply picture this year and into 2022, and the markets are responding. Meanwhile, the pork cutout value slumped $3.83, with a $20-plus plunge for hams pulling the cutout lower. But movement picked up to 351.84 loads. Cash hog bids fell a national average of $1.19 on Tuesday. Hog weights in the Iowa/southern Minnesota market climbed 1.6 lbs. the week ending Sept. 25 to an average of 283.5 lbs., which is 1.7 lbs. above year-ago levels.
Overnight demand news… Algeria bought between 500,000 MT and 550,000 MT of optional-origin milling wheat in an international tender, with France expected to supply much of the wheat; some Black Sea supplies could also be in the mix. Jordan made no purchase in its tender for 120,000 MT of wheat. Pakistan has received offers in its tender to buy 640,000 MT of wheat.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Fruit and Tree Nuts Outlook: September 2021 — ERS
- 2:00 p.m. Broiler Hatchery — NASS