Followthrough buying in soybeans and wheat overnight... Corn futures are steady to fractionally lower as traders engage in a bit of profit-taking after yesterday’s strong gains. But soybeans are up 6 to 8 cents in most contracts on followthrough buying. Wheat futures are seeing similar action and are up 3 to 6 cents, with the HRW wheat market leading gains. The U.S. dollar index is just below unchanged, while crude oil futures are slightly higher.
PF CCI: Winter wheat ratings slip... 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 came in at 338.95 points, down 1.5 points from last week. The SRW wheat crop fell 3.57 points to 372.92 points. More declines are likely ahead as crop scouts get a better handle on damage from this weekend’s storm. Get more details.
Wheat Quality Council tour kicks off... Starting today, scouts will begin sampling fields as part of the three-day Wheat Quality Council HRW wheat tour. Scouts will travel from Manhattan to Colby to Wichita and back to Manhattan, collecting samples from Kansas, Nebraska, Colorado and Oklahoma. Today they will sample fields in northern Kansas and far southern Nebraska. This year could be especially interesting given heavy snow, cold temps, and high winds over the weekend. And more wet weather and cold temps are expected. On the final day of the tour (May 4) participants will issue a yield projection for Kansas based on their average guesses.
Cold snap in Brazil, but consultant leaves crop pegs unchanged... Southern Brazil also experienced record-low, freezing temperatures late last week and over the weekend, reports South American Crop Consultant Dr. Michael Cordonnier. He elaborates that frosts during April in Brazil would be like having frost in the central Corn Belt at the end of August. “The major crop concern in the state of Parana is the safrinha corn crop, which is now in the early stages of pollination or still in vegetative development,” Cordonnier reports. But he continues that much of the safrinha crop is planted in northern and western regions of the state where temps did not drop as far. He left his Brazilian corn crop estimate at 92 MMT and his soybean crop estimate at 110 MMT. His Argentine soybean and corn crop pegs also held steady at 55 MMT and 37 MMT, respectively.
Disappointing Chinese factory activity for April... The China’s Caixin Purchasing Managers’ Index (PMI) came in at a seven-month low of 50.3 points in April, a drop of 0.9 points from the month prior and just above the 50.0-point level separating economic expansion from contraction. Traders had expected just a 0.2-point drop. Factories slowed production and cut jobs last month amid a drop in new orders. The country’s official PMI that is geared more toward large-sized enterprises also declined last month, dropping 0.6 points to 51.2.
Negotiators push back deadline on U.S./Mexico sugar trade spat decision... Monday marked a deadline for U.S. and Mexican government officials to reach an agreement over sugar trade, but the two sides agreed to extend that deadline until June 5. If no deal has been struck at that point, U.S. anti-dumping tariffs on Mexican sugar would kick in. “Excessive demands from U.S. producers and refiners have impeded the ability to reach a solution,” says Mexico’s economy ministry, who adds that U.S. negotiators continue to push for limits on Mexican raw sugar exports for U.S. refiners. The U.S. sugar industry wants the U.S. to withdraw from the 2014 trade agreement setting prices and quotas for U.S. imports of Mexican sugar if the deal cannot be reworked.
Deere drops Monsanto unit buy a month ahead of DOJ trial... Deere & Co. dropped its planned acquisition of Monsanto Co.’s Precision Planting LLC on Monday, just a month before the U.S. Department of Justice’s suit to block the deal, estimated at about $190 million, over concerns that the combination would harm the more than $1-billion market for high-speed precision planting systems. The Climate Corporation, a Monsanto subsidiary that owns Precision Planting, said it has spoken with several third parties that have expressed interest in buying the business. Monsanto said existing Climate FieldView customers who currently use John Deere’s Wireless Data Server technology to stream data into their account would not be affected.
China gives conditional approval to Dow/DuPont merger... China’s Commerce Ministry conditionally approved the proposed merger of Dow Chemical Co. and Dupont. The country would require Dupont to divest its research and development department as well as assets related to pesticides and herbicides used in rice. EU antitrust regulators also gave the deal conditional approval in March. Regulators in the U.S., Brazil, Australia and Canada have yet to give the deal the green light.
Packer profit margins slip into the red for cattle processors... Cattle futures notched a new contract high yesterday, but the market faced pressure most of the day as traders noted the market’s overbought condition. And the nine-day Relative Strength Index continues to signal more corrective trade is warranted. In addition, packers were forced to pay aggressive prices for market ready cattle last week, and while product market has been on the rise, prices have not kept pace with cash market gains, pulling packer profit margins into the red. This could make them more cautious with bids this week, especially since showlists are up a sharp 22,000 head this week.
Cash hog prices improve, hinting at supply tightening... Lean hog futures remain in an uptrend after forging a V-bottom last week. But if market fundamentals remain lackluster, the market could be due for a setback. On an encouraging note, cash hog bids strengthened to start the week, signaling some seasonal supply tightening may be underway. But pork movement was lackluster on Monday at 219.42 loads.
Overnight demand news... Taiwan issued an international tender to buy 95,750 MT of grade 1 milling wheat to be sourced from the United States.
Today’s reports:
No reports
