Position evening preceding reports... Corn futures are up a penny after a quiet overnight session. Soybeans enjoyed gains at times overnight, but the market is currently trading low-range and steady to down a penny. Winter wheat futures are fractionally to 2 cents higher amid some corrective short-covering. The U.S. dollar index is up slightly, while crude oil futures are under light pressure.
Much-anticipated acreage and grain stocks data out today... Traders surveyed by Reuters expect USDA’s Prospective Planting Report to show farmers plan to hike soybean plantings to 88.214 million acres this growing season at the expense of corn and spring wheat, which are expected to come in around 90.969 million acres and 11.358 million acres, respectively. Cotton planting intentions are also expected to climb notably from 2016 to 11.409 million acres. March 1 grain stocks are anticipated to be hefty, with traders expecting corn stocks of 8.534 billion bu. (highest on record), soybean stocks of 1.684 billion bu. (second highest on record) and wheat stocks of 1.627 billion bushels (highest since 1988). USDA will release this data at 11:00 a.m. CT.
Two executive orders coming today on trade policy... President Donald Trump is slated to sign two executive orders today. The first would direct his administration to look at the underlying causes of U.S. trade deficits with China and other countries. The second would instruct Homeland Security Secretary John Kelly to strengthen the collection of penalties on unfairly traded foreign goods. The mandates come a week before Chinese President Xi Jinping is set to visit Trump at Mar-a-Lago in Florida.
Heavy rains threaten Argentine crops... A frontal boundary moving across central Argentina is expected to bring heavy rainfall over the weekend, with meteorologists at BAMWX.com noting that widespread accumulation totals of 3 to 6 inches are possible in western production regions with local amounts of up to 12 inches possible. Obviously, this poses the threat of flooding and crop damage.
AgroConsult hikes bean crop peg following tour... Following its crop tour through main growing regions of Brazil, AgroConsult hiked its soybean crop estimate for the country by 2.3 MMT to 113.3 MMT. The consultancy noted record average soybean yields and near-perfect weather. Brazil will likely ship 61.4 MMT of soybeans in 2017, according to AgroConsult. This is up 400,000 MT from its projection earlier this month. AgroConsult maintained its estimate of Brazil’s corn crop at 95 MMT, which would be a record. Also of note, the consultancy’s chief analyst says grain storage may be a problem this year.
Stronger-than-expected Chinese manufacturing growth... China’s official Purchasing Managers’ Index climbed by 0.2 points from February to 51.8 in March, the highest reading since April 2012 and above the 50.0-point mark that separates contraction from expansion in the factory sector. This also topped expectations for a steady reading in March. New orders climbed 0.3 points to 53.3.
A rise in India’s currency creating export opportunities for others... A rise in India’s currency makes imported cotton cheaper than domestic supplies. Therefore, senior industry officials and executives expect the country’s cotton imports to surge 36% to 3 million bales this season. The elevated rupee has also slowed India’s exports of the fiber, with some projecting it will export just 5 million bales in 2016-17, down 30% from year-ago. Pakistan, Bangladesh, China and Vietnam are the main buyers of Indian cotton. This situation is helping its competitors like the U.S., Brazil and some African nations
McDonalds to transition to fresh beef in quarter pounders... McDonald’s USA plans to use entirely fresh, never frozen beef in its quarter pounders served at the majority of its restaurants by mid-2018. The burgers will be cooked when they are ordered. The company has been testing the shift to fresh beef at restaurants in Texas and Oklahoma.
Beef and cash prices soften... Choice and Select boxed beef values fell $1.71 and $2.21, respectively, on Thursday but this did spur decent movement of 130 loads. Choice values are down $7.07 for the week while Select cuts have fallen $7.72. This has cut into packer profit margins (though they are still in the black) and given them the upper hand in cash negotiations. Trade picked up yesterday in Kansas at $124 to $128, in Texas at $126.50 to $128, and in northern locations at prices ranging from in $128 to $132. This is down from last week’s action at $130 to $134.50 but well above where futures are trading.
H&P Report about as bearish as expected... USDA’s Hogs & Pigs Report confirmed expected hog herd expansion. The steep price break leading up to the report and the bounce preceding its release could signal that the negative data is already baked into prices. Adding to such ideas is the severely oversold condition of the market. But with market hog inventories up more than 4%, buying interest outside of corrective trade will be limited.
Overnight demand news... Jordan issued new international tenders to buy 100,000 MT of hard milling wheat and 100,000 MT of animal feed barley from optional origins. Tunisia purchased around 100,000 MT of soft milling wheat and 50,000 MT of feed barley to be sourced from optional origins.
