First Thing Today: Scouts Note Freeze Damage on Day 1 of HRW Wheat Tour
Winter wheat futures chip away at Monday's gains... Corn futures are around a penny lower in most contracts after a choppy overnight session. Soybean futures are steady to a penny higher after the market stuck to a narrow trading range overnight. Wheat futures are under pressure, with HRW wheat down 2 to 8 cents, SRW wheat 1 to 6 cents lower, and HRS wheat posting losses of 1 to 2 cents. The U.S. dollar index is slightly higher, as are crude oil futures.
Day 1 of HRW wheat tour: Scouts note freeze damage... Scouts on the first day of the Wheat Quality Council HRW tour found an average yield of 43.0 bu. per acre in northern Kansas, versus last year's 47.1 bu. per acre and the five-year average of 42.7 bu. per acre. Scouts reported crops looked good early in the day, but the effects of the April 22-23 and April 27 freezes became more visible as they traveled toward central Kansas. They say the freezes, "may cause significant damage in many areas because the crop was in boot and early heading stages," but the full extent of that damage will not show until a week to 10 days after the event. They also noted some disease pressure in central areas. Heavy snow over the weekend laid wheat over on its side in western parts of the state, but tour participants say stems aren't broken so it is likely something the crop can recover from.
Today scouts will travel from Colby to Wichita, sampling fields in western, southwestern and south-central Kansas, with one route dropping into northern Oklahoma.
China to start auctioning reserve corn this week... China will begin auctioning off corn from its state reserves on May 5, the National Grain Trade Center announced. At the initial auction, the country hopes to unload up to 2 MMT of corn. Friday's auction will include 394,000 MT of 2013-crop corn from Inner Mongolia, 300,000 MT from Liaoning, 700,000 MT from Jilin and 610,000 MT from Heilongjiang. The sale will also include some imported corn. Prices are expected to be attractive as China wants to get rid of its aging stocks.
Indian farmers to boost cotton plantings... India's cotton acreage could climb 7% to 11.3 million hectares in 2017-18 as farmers boost plantings in response to high cotton prices and better yields in 2016-17, according to the nation's textile commissioner. Assuming yields are in line with the five-year average, production could climb to just shy of 6 MMT, the official adds. This would maintain India's role as the world's top cotton producer. The commissioner also forecasts global cotton plantings at 30.8 million hectares for 2017-18, up 5% from year-ago.
Branstad vows to get U.S, beef into China... Iowa Governor Terry Branstad told senators that he will be in a good position to help get China to lift its ban on U.S. beef if he is confirmed to be the next ambassador to the country. Branstad has a lengthy personal relationship with Chinese President Xi Jinping. “I want to serve American beef -- specifically Iowa premium beef -- at the embassy and at the ambassador’s residence,” Branstad told the Senate Foreign Relations Committee at his confirmation hearing yesterday. “I don’t think it’s fair that right now we have to serve Australian beef or Argentinean beef.”
JBS brings in fresh U.S. beef... For the first time ever, Brazil's JBS SA, the world's largest meat processor, imported beef from the United States. The company hopes to develop a niche market for a more marbled version of a top sirloin cap, known locally as "picanha." The company's imports of this meat could reach at least 150 MT per month according to initial management projections. A bilateral trade deal authorized last year allowed Brazilian beef to enter the U.S. and vice versa.
New Mexico's attorney general to investigate U.S. beef processors... New Mexico's Attorney General Hector Balderas has launched a probe into the business practices of beef processing companies like Cargill Inc., JBS USA, National Beef Packing Co., Tyson Foods and more, citing concerns about "unfair and anticompetitive practices. Balderas alleges that "mega meatpacking" companies are harming New Mexican families by bringing in "record profits" at the expense of local residents whose paychecks are shrinking as meat prices climb.
Repeat of last week's cash cattle gains unlikely... Cattle futures traded as much as limit-higher yesterday before backing well off those gains at the close. Traders have been encouraged by recent sharp gains in the product market, as well as stressful feedlots conditions on the Plains after this weekend's storms. Choice and Select boxed beef prices climbed $3.18 and $3.83, respectively, on Tuesday. But showlists are up sharply this week and packers are cutting in the red, signaling cash prices are unlikely to rise again this week.
Cash and product prices improve... Lean hog futures rallied around improvement in both the product and cash market yesterday. Some packers again raised bids for market ready supplies, signaling supplies are tightening seasonally in some areas -- though they remain far from "tight." Also encouraging, pork movement picked up to 384.29 loads yesterday on a 67-cent rise in the pork cutout value.
Overnight demand news... Taiwan bought around 65,000 MT of corn that is likely to be sourced from Argentina.
Today's reports:
- 9:30 a.m., Weekly Ethanol Production -- EIA
- 2:00 p.m., Broiler Hatchery -- NASS
- 1:00 p.m., FOMC meeting concludes -- Fed
