Markets resume downtrend overnight... Corn futures are fractionally to a penny lower as of 6:30 a.m. CT after a quiet overnight session. Soybean futures have extended the market’s downtrend, with most contracts currently trading 3 to 4 cents lower. Winter wheat futures are steady to a penny lower, while the spring wheat market is narrowly mixed. The U.S. dollar index and crude oil futures are both marginally higher.
Export sales out today... USDA will release its update on export sales activity for the week ending March 23 at 7:30 a.m. CT. Traders expect the report to show corn sales between 1.0 MMT and 1.5 MMT, soybean sales ranging from 450,000 MT to 850,000 MT, wheat sales of 300,000 MT to 650,000 MT, soymeal sales between 100,000 MT and 400,000 MT and soyoil sales ranging from 0 to 40,000 MT.
Perdue votes rescheduled for today... Committees plan to vote on Sonny Perdue for Agriculture Secretary and Alexander Acosta for Labor Secretary this morning. The ag panel did not vote yesterday due to no votes in the Senate.
Rumors circulate about early start to Chinese corn auctions at low prices... Rumors that China may launch its annual corn state reserve sales in April, a month earlier than usual, weighed on Chinese corn futures today. In addition, there was talk of low prices for the grain -- possibly as low as 1,100 yuan ($159.64) per MT for 2012-crop corn. At last year’s auction, corn sold for an average price of 1,500 yuan ($217.69) per MT. Much of China’s reserve stocks have gone out of condition and therefore will be sold to processors.
South Africa says odds for El Nino rising... South Africa’s government says the likelihood that El Nino will form again in the southern hemisphere winter or spring has increased. This period falls between July and September. This warming of sea surface temperatures is associated with drought in South Africa. The previous such event just faded in May 2016.
Egypt may hike food subsidies... Egypt is considering raising monthly food subsidies for its population to 27 pounds ($1.49) per person, which would be a jump of 29% from current levels, according to two finance ministry sources cited by Reuters. The potential increase is aimed at easing the burden of rising prices on low-income families. Around 70 million people receive such subsidies.
Temer may make trip to the U.S. to discuss trade, investment... Officials from the U.S. and Brazil are discussing a visit to the White House by President Michel Temer to discuss bilateral trade and investment, according to two sources within Temer’s office cited by Reuters. No date has been set, according to the sources. One of them said that Brazil is “not a threat to the United States,” adding “there are plenty of investment opportunities in both countries.”
Brazil puts stricter, clearer rules in place for meat sector... Brazil’s president and ag minister have announced new rules for the meat processing industry that they say are stricter and clearer. These include a dramatically higher fine for food sanitary violations of 500,000 reals ($160,250) versus 15,000 reals previously. The ag ministry also noted that the changes would eliminate the need for inspectors to interpret antiquated laws that were 65 years old. This comes in the wake of a meat inspector bribery scandal.
H&P report expected to reflect expansion... Traders expect USDA’s Quarterly Hogs & Pigs Report to reflect ongoing expansion in the industry, with all hogs and pigs as of March 1 at 70.761 million head, up 3.9% from year-ago levels. Kept for breeding and kept for marketing are also expected to be up from year-ago, at 101.8% and 104.0% of year-ago levels, respectively.
Some early cash action at slightly lower prices... A few hundred head of cattle changed hands in Texas and Kansas yesterday at prices of roughly $128 to $129, down a buck or two from last week’s action in these states. Trade was a bit more active in Nebraska, where around 2,200 head changed hands for prices mostly around $132 versus trade ranging from $133 to $134.50 last week. Meanwhile, boxed beef prices continue to soften but this has led to improved movement.
Risk aversion high preceding quarterly snout count... Lean hog futures have marched steadily lower leading up to today’s Hogs & Pigs Report amid concerns the market could show even greater herd expansion than indicated by pre-report surveys. The downside has likely been overdone, and we expect the report to help the market put in a low.
Overnight demand news... Iraq issued a tender to buy at least 50,000 MT of wheat from the U.S., Canada or Australia. Tunisia tendered to buy 100,000 MT of soft wheat and 75,000 MT of feed barley from optional origins. Jordan purchased 50,000 MT of hard milling wheat from optional origins.
