Firmer tone overnight... Corn futures are up 1 to 2 cents in most contracts as of 6:30 a.m. CT after favoring the upside overnight. Soybean futures are up 2 to 4 cents, which is near the top of the market’s two-sided overnight trading range. Winter wheat futures are 1 to 2 cents higher amid some concerns about flooding on the Central Plains. Trade was limited in spring wheat overnight. The U.S. dollar index is down slightly, while crude oil futures are posting modest gains after yesterday’s plunge.
Export sales report expectations... USDA will release its weekly update on export sales activity at 7:30 a.m. CT. Traders expect the report to show corn sales ranging from 800,000 MT to 1.3 MMT, soybean sales between 400,000 MT and 800,000 MT, wheat sales of 350,000 MT to 750,000 MT, soymeal sales ranging from 50,000 MT to 350,000 MT and soyoil sales falling between 8,000 MT and 42,000 MT.
Corn from Paraguay reportedly headed for the U.S. in May... A shipment of corn from Paraguay is due to arrive at the U.S. port of Wilmington, North Carolina next month, according to a U.S. grain trader. Thomson Reuters Eikon shipping data shows the vessel is moored at Brazil’s Paranagua port and it’s scheduled to arrive in the states by May 20. If the vessel is loaded to its full 61,000 MT capacity, the shipment would be the biggest ever U.S. import of corn from Paraguay. The last time the U.S. brought in corn from the country was in 2015. The unnamed grain trader indicated that high levels of vomitoxin in U.S. stockpiles may be the reason for the import.
Brazil offers subsidy program to stimulate domestic corn buys... Brazil’s government says it will offer subsidies totaling up to 500 million reals ($158.72 million) to help producers market their large crop in 2016-17. Corn buyers will compete in auctions for grants that they would receive when they close deals to buy the grain in the domestic market. Producers would receive at least the minimum guaranteed price set by the government each year. While the program is aimed at boosting domestic sales of corn, some traders have in the past used these grants to help finance exports deals.
Will slow corn planting as of mid-April draw down final acreage?... As of April 16, corn planting was just 6% complete, three points behind the five-year average pace. And soggy weather this week has kept many farmers out of the field. Already, this has spurred talk that all of farmers’ intended corn plantings of 89.996 million acres may not be seeded. And this talk is not unfounded. Jim Young, a Reuters market analyst, points out that over the past 20 years there were 12 years when corn planting progress lagged the long-term average pace as of mid-April. For half of those twelve years, final corn acres came in more than 1% below March intentions. And in only two of the 12 years did final acreage increase from March.
Japan’s reliance on corn in feed rations diminishes... Japan’s use of corn in animal feed stood at 45.9% in February, down 0.2 points from the month prior and 0.3 points below year-ago. On the other hand, its use of wheat in feed rations stood at 1.9%, steady with the month prior but up 0.3 points from February 2016 levels. Sorghum usage is down 0.6 points from year-ago at 2.3%, while barley usage was steady with February 2016 levels at 3.4%.
EPA plans on aggressive use of employee buyouts... EPA is keeping a freeze on hiring and is preparing to offer buyouts and early retirement to employees to reduce the agency’s workforce. An agency memo said the agency plans to complete the buyout program by Sept. 30, the end of the current fiscal year. While the White House lifted a government-wide hiring freeze last week, the memo said any hiring at EPA will be permitted only on a case-by-case basis with approval by the agency’s acting deputy administrator.
Higher cash cattle trade... Cash cattle trade was fairly active on the Plains yesterday with most trade falling between $130 and $132, which was up $2 to $4 from the bulk of last week’s action. Given tighter showlist numbers and recent boxed beef price gains, this is not surprising. But traders’ reluctance to push cattle futures aggressively higher until the past two weeks means futures are still playing catch up and are below the cash market. Such efforts may be hindered by the overbought condition of the market, however.
Lean hogs remain under pressure, but rebound likely ahead... Weight data yesterday confirmed supplies are a bit backed up in major producing regions, which continues to weigh on cash and thus futures prices. But a seasonal rebound should be ahead. An effort to correct the technically oversold condition of nearby contracts could help get this underway.
Overnight demand news... South Korea’s Korean Feed Association bought around 120,000 MT of corn from optional origins. Its Feed Leaders Committee bought around 60,000 MT of corn from optional origins. South Korea’s Nonghyup Feed Inc. bought around 70,000 MT of corn to be sourced optionally from the U.S. or South America; it also purchased 203,000 MT of corn from optional origins. Turkey bought 65,000 MT of corn from the European Union and Serbia. Japan bought 70,275 MT of food-quality wheat from the U.S. and 25,280 MT from Canada.
Today’s reports:
- 7:30 a.m., Weekly Export Sales -- FAS
- 7:30 a.m., Drought Monitor -- USDA/NWS
- 7:30 a.m., Extended Weather Outlook -- NWS
- 2:00 p.m., Livestock Slaughter -- NASS
- 2:00 p.m., Milk Production -- NASS
