Light pressure overnight... Corn futures are trading midrange with losses around a penny or two after USDA reported corn and soybean planting was more advanced than expected. Soybeans also faced pressure overnight and most contracts are down 3 to 4 cents. While HRW wheat futures are down a penny, the SRW and HRS wheat markets are fractionally to a penny higher in most contracts. The U.S. dollar index is holding near unchanged, while crude oil futures are marginally higher.
PF CCI: Rains boost winter wheat crop ratings... When USDA’s winter wheat crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the HRW wheat crop edged 1.58 points higher to 340.45 points, with no major producing states noting declines. The SRW wheat crop also climbed 0.57 points to 376.49. Improvement was expected after beneficial rainfall last week across much of winter wheat country. Get more details.
Consultant hikes Brazilian crop estimates... South American Crop Consultant Dr. Michael Cordonnier raised his Brazilian soybean crop estimate 1 MMT to 110 MMT and he upped his corn crop peg 2 MMT to 92 MMT. He has a neutral to higher bias going forward for both crops. Ninety-three percent of the country’s bean crop has been harvested with yields remaining excellent, Cordonnier details. On corn, he explains that the safrinha corn crop in Mato Grosso is now far enough along that he feels confident it will be a successful growing season. Cordonnier made no change to his Argentine soybean or corn crop estimates that stand at 55 MMT and 37 MMT, respectively.
Aggressive Chinese bean buys to start the year... China imported nearly 6.327 MMT of soybeans in March, a gain of 3.73% from year-ago levels. The U.S. got 66.75% of this business. For the first three months of the year, China has brought in 19.521 MMT of soybeans, a gain of 20.02% from year at this point. Again, the U.S. was its No. 1 supplier, shipping China more than 15.428 MMT of soybeans. This was an increase of 17.82% from year-ago.
Dramatic slowdown in Chinese corn imports... China imported just 5,262 MT of corn in March, the lowest level since September 2013 and a 99.1% drop from the year prior, reports the General Administration of Customs. Last year, China changed its farm support policy for the grain, which has resulted in domestic prices dropping in line with international ones. Also of note, China’s imports of distillers dried grains were down 75.9% from year-ago levels in March at 89,761 MT, as the country has restrictive duties on the byproduct. On the other hand, its barley imports were up 119.2% from year-ago levels at 708,617 MT and its wheat imports stood at 502,120 MT in March, up 140.5% from year-ago.
Senate confirms Perdue... Sonny Perdue will be sworn in early this morning as the new USDA secretary and then will head to USDA headquarters in Washington for an address to USDA employees. The Senate voted 87-11 to confirm the former Georgia governor. A U.S./Canada dairy trade issue is the first topic on Perdue’s list as he is set to journey to Wisconsin, a major dairy-producing state, for his first trip as USDA secretary. Perdue will need to nominate dozens of administrative-level positions at the USDA, ranging from deputy secretaries to administrators in some of the 17 agencies that fall within the department. Some appointments might be announced this week.
Changes ahead for HRW wheat futures contracts... CME Group says it will begin using a “variable storage rate” mechanism in the HRW wheat futures beginning March 18, 2018. This shift is aimed at restoring farmers’ confidence in the market that has struggled to converge with cash prices.
Traders kick off week with some corrective trade in live cattle... Cattle futures have torn higher of late, but traders started the week with some profit-taking that corrected the market’s overbought condition. Now that that has been accomplished, the market could see some additional buying as USDA’s Cold Storage Report came in on the friendly side of expectations. In addition, futures are at a discount to last week’s cash cattle action that took place at an average price of $131.60, according to USDA. Showlists are down slightly in Colorado, Kansas and Texas, but up sharply in Nebraska, resulting in a net gain of 8,000 head this week.
Product market concerns could weigh on lean hogs... Lean hog futures also saw some corrective trade on Monday, with short-covering lifting futures. But a disappointing showing in Monday’s Cold Storage Report could cause traders to shift back to selling. Plus pork movement was lackluster to start the week, despite a $1.04 pullback for the pork cutout value.
Overnight demand news... South Korea bought around 65,000 MT of corn from optional origins late last week. Taiwan tendered to buy between 40,000 MT and 65,000 MT of corn to be sourced from the U.S., Argentina, Brazil or South Africa.
Today’s reports:
- 8:00 a.m., Food Price Outlook -- ERS
