First Thing Today: More Flooding Possible in Argentina
Soybeans bounce overnight... Soybeans benefited from some much-needed short-covering overnight and prices are currently up 7 to 9 cents. Corn futures also strengthened overnight and most contracts are around a penny higher as of 6:30 a.m. CT. HRW wheat futures are up 3 to 4 cents, while SRW and HRS wheat futures are up 1 to 2 cents. The U.S. dollar index is holding near unchanged, while crude oil futures are moderately higher.
Full Senate could vote on USDA Secretary-nominee Sonny Perdue before Easter... A Senate vote on the nomination could occur before lawmakers leave on a two-week recess if a unanimous consent agreement goes without a hitch. One hurdle was cleared Tuesday after Sen. Bob Menendez (D-N.J.) dropped his hold on Perdue. Menendez was concerned about remarks Perdue made about relaxing restrictions on financing exports to Cuba. Melendez dropped his objection to Perdue after the two talked by phone yesterday afternoon. Senate Agriculture Chairman Pat Roberts (R-Kan.) is pushing the vote, but another hold is still possible, which would push the vote to after the congressional Easter and Passover recess.
More flooding possible in Argentina... Moderate to heavy rain is expected Friday through Sunday across much of Argentina's main growing region, with precip expected to be heaviest and pose the threat of flooding in Buenos Aires, according to World Weather Inc. While this will slow harvest, drier weather next week should allow any flood water to recede, it continues. With last season's flood issues fresh in traders' minds, they are closely monitoring the forecast.
Consultancy raises wheat crop estimate for Ukraine... UkrAgroConsult estimates Ukraine's 2017 wheat crop at 24.2 MMT, up 700,000 MT from its previous estimate thanks to better-than-expected weather. It adds that ongoing favorable weather could boost production to 25 MMT to 26 MMT. Ukraine will likely export 14.5 MMT in 2017-18, which would be down 1.5 MMT from the previous season, according to the consultancy. The higher wheat production peg pushed UkrAgroConsult's total grain crop estimate up a like amount to 60.9 MMT.
India permits imports of 500,000 MT of duty-free raw sugar... India will allow the import of 500,000 MT of duty-free raw sugar through June 12, according to an unnamed government official cited by Reuters. Drought has curbed production so much so that output will fall short of consumption for the first time in seven years. India, the world's largest sugar consumer, typically tacks a 40% tax on sugar imports. Global sugar prices rallied in response to this news.
EU clears ChemChina’s $43 billion Syngenta deal, with conditions... China National Chemical Corp. has won EU approval for its roughly $43 billion takeover of Swiss seed and pesticide maker Syngenta AG on condition ChemChina divest large parts of its European businesses for pesticides and products that regulate crop growth. The European Commission’s announcement came a day after the U.S. cleared the deal — the largest ever overseas acquisition by a Chinese company — on condition ChemChina sell three crop chemical businesses to a rival. The EU last week cleared Dow Chemical Co. and DuPont Co.’s merger, leaving Bayer AG and Monsanto Co. as the last of the three major deals in the sector still awaiting approval from the EU and other regulators.
Brazil lifts export ban on some meat processors... Brazil's ag ministry has given three meat processors the green light to resume exports after an audit concluded there were no irregularities at the facilities. Eighteen other plants are still barred from exporting product until the audit is finished, according to a statement from the ministry.
Disconnect between cash cattle and futures prices continues... Live and feeder cattle futures are clearly trending lower amid expectations for softer cash cattle trade this week. Yesterday, around 2,600 head of cattle traded at $120 in Nebraska, down from trade ranging from $124 to $128.50 in the state the week prior. Today's online Fed Cattle Exchange auction will provide additional insight on likely cash action. On a more encouraging note, boxed beef movement surged to 170 loads on Tuesday, though this came on softer prices.
Hogs in or near oversold territory... Several lean hog contracts are oversold according to the nine-day Relative Strength Index, signaling a time or price correction is overdue. But highly bearish attitudes mean it could be tough for the market to mount even a corrective rally. Supplies are on the rise and cash prices remain under pressure, giving traders little incentive to be buyers.
Overnight demand news... Japan received no offers for feed wheat or barley in its simultaneous buy and sell auction. Algeria issued an international tender to buy a nominal 50,000 MT of optional-origin soft milling wheat.
