First Thing Today: Key Markets Lift Ban on Brazilian Beef
Corn higher, soybeans lower to start the week... Corn futures are fractionally to a penny higher thanks to some light short-covering overnight. Soybeans are down 2 to 3 cents after the market saw a mix of light followthrough selling and short-covering overnight. Winter wheat futures are down 2 to 3 cents, while HRS wheat is posting fractional to 1-cent gains in most contracts. The U.S. dollar index is marginally higher, while crude oil futures are down slightly.
Health care and tax reform, Gorsuch votes and USDA reports in focus... Health-care reform, or more accurately the lack of it, could still be a backdrop in Washington in the week ahead. Treasury Secretary Steve Mnuchin has talked up the potential for tax reform plans to come soon, so that will be a watch point.. For agriculture interests, the House continues its new farm bill work, with House agriculture subcommittees having a "part one" hearing on commodity policy along with ones on the Supplemental Nutrition Assistance Program (SNAP) policy and the Farm Credit System. The Senate could hold votes on Neil Gorsuch to serve on the Supreme Court. Friday will be the big day for agriculture as USDA will release its key Prospective Plantings and Quarterly Grain Stocks Reports.
Infrastructure talks with Canada this week... Canada's Minister of Infrastructure Amarjeet Sohi will be in Washington this week. “Both the United States and our country have a great emphasis on building infrastructure to grow our economy and create opportunities for workers on both sides of the border,” he has said. Canada, however, is adamantly opposed to U.S. Buy American and Buy America policies, which President Donald Trump backs. Procurement policies are expected to loom large in North American Free Trade Agreement renegotiations with Canada and Mexico.
Trump to begin reversing Obama-era cutbacks in carbon dioxide... The Trump administration will issue an executive order on Tuesday that begins dismantling a rule under former President Barack Obama that slashed carbon dioxide emissions and discouraged coal-fired electricity, US EPA Administrator Scott Pruitt said. "The executive order is going to address the past administration’s effort to kill jobs across this country through the Clean Power Plan," Pruitt said on ABC’s This Week program on Sunday.
Egypt's GASC will continue to import wheat during local procurement season... Egypt's state grain buyer, the General Authority for Supply Commodities (GASC), will continue to import wheat during the domestic wheat-buying season to boost its reserves, the nation's supply minister says. In recent years the country has slowed or stopped imports during the local buying season. But he continues that private sector imports would be banned between April 15 and July 15. This is part of the government effort to crack down on procurement fraud.
Heilongjiang province planning more cuts to corn acres... China's Heilongjiang Province plans to cut corn acreage by 10 million mu (1.647 million acres) this year, after cutting acreage by nearly 20 million mu (3.295 million acres) last year, according to Xinhua news agency. The province is one of China's biggest corn producers. High grain stocks have China focused on curbing corn planting.
Russia plans to replace Turkish grain buyers in five months or less... "We hope we will find new markets for grain and will replace Turkey without pain within the next two-three, maximum five months," Russian Agriculture Minister Alexander Tkachev said today. This comes after a change to Turkish import licenses effectively cut off trade of wheat, corn and sunflower with Moscow.
ADM says problems with a cooling pipe behind recent closures of Decatur corn processor... Archer Daniels Midland issued a statement explaining that temporary and permanent repairs to a pipe feeding cooling water to the mill were behind recent closures of its Decatur, Illinois corn processing complex. "We expect this event to have a small negative impact on our results for the first quarter, principally in our corn processing business," ADM detailed. It says it has put in place contingency plans that will allow the facility to continue operations if such failures occur in the future.
Key markets lift bans on Brazilian meat... China and several other countries lifted their ban on imports of meat from Brazil over the weekend as authorities in Brazil clarified the details of a police investigation into bribery of domestic health inspectors. China is the biggest export market for Brazilian beef. Some other notable buyers, like Chile and Egypt, also lifted bans. Unknown is whether any consumer backlash regarding Brazilian beef will impact trade.
Cattle futures again start the week well below cash market... Cash cattle trade took place mostly at $2 higher prices of $130 on the Southern Plains, with the Northern Plains seeing trade mostly in the $132 to $134 range. And while futures surged last week, the front-month is still well below the cash market. Meanwhile, Friday's Cattle on Feed Report came in largely as expected, providing little price direction.
Momentum favors bears in hog market... Friday's low-range close means followthrough selling is likely to start the week. And while April lean hogs hold a discount to the cash market, traders expect that market to soften over the near-term. The big attention-getter this week is the Quarterly Hogs & Pigs Report on March 30.
Weekend demand news... Jordan tendered to buy 100,000 MT of animal feed barley to be sourced from optional origins. Algeria tendered to purchase a nominal 50,000 MT of durum wheat.
