Firmer tone for grains overnight... Corn futures favored the upside overnight and as of 6:30 a.m. CT most contracts are around a penny higher. Soybeans are trading midrange and mostly around a penny lower. SRW and HRW wheat futures are around 1 to 2 cents higher, while HRS wheat futures are up 4 to 5 cents. The U.S. dollar index is slightly higher, while crude oil futures are slightly lower.
Trump to unveil tax cut proposals today... U.S. President Donald Trump is expected to unveil a proposal to cut corporate taxes on U.S. companies’ foreign profit and slash the top tax rate on so-called pass-through businesses to 15%. Trump’s tax plans include a proposal for a one-time levy of 10% on the more than $2.6 trillion in earnings U.S. companies hold offshore, according to a White House official familiar with the plan. The president’s move to cut the corporation tax to 15% in the U.S. is seen as an opening gambit in negotiations as the drop in receipts would boost the deficit too much to be sustainable.
Cold temps move into winter wheat country... The National Weather Service has issued a frost advisory for eastern Nebraska and northern Kansas. And World Weather Inc. notes that temperatures are likely to remain below average across much of the HRW Wheat Belt through early next week. Major damage is not anticipated, but the situation bears watching. Cold, wet weather is also expected to slow spring wheat planting efforts. In fact, a winter weather advisory is in effect for northern Minnesota and nearby areas of North Dakota and South Dakota.
Ukraine’s grain exports surged last month... Ukraine exported 4.54 MMT of grain in March, up 52% from the month prior, says UkrAgroConsult. The surge was due in part to record-high corn shipments of 3.1 MMT last month. Wheat shipments also climbed from 840,000 MT in February to 1.05 MMT in March. For the first nine months of the 2016-17 marketing year, Ukraine has exported 34.2 MMT of grain. Looking ahead, the consultancy says that a strong harvest would likely prompt it to raise its 2017-18 grain export forecast by 700,000 MT to 39.5 MMT.
Mexico considers plan to boost ethanol use in fuel... The Mexican Association of Sustainable Transportation has submitted a plan to the country’s energy regulator, CRE, to increase the amount of ethanol that can be blended into motor fuel from 5.8% to 10.0%. The industry group explains this would power job growth and reduce air pollution. But critics say that the fuel additive methyl tertiary butyl ether is better at reducing air contaminants and that corn production can lead to deforestation. CRE commissioners are not expected to make a decision on this until November.
China considering special sugar import duties as part of antidumping probe... China is reportedly considering tacking special import duties on sugar as part of an antidumping probe to help domestic producers who are struggling to compete with cheap imports from Brazil and others. Its first ruling in the probe is in due May 22. If approved, the proposal would introduce a 45% duty this fiscal year, followed by an added 40% tax in FY 2018 and a 35% tariff in FY 2019, according to a document circulated by China’s Dairy Industry Association. This is in addition to a 50% tax that is currently tacked on all sugar brought in outside of quotas.
Beef prices on the rise... Boxed beef prices extended gains on Tuesday, with Choice cuts up 34 cents and Select values $1.98 higher. Also encouraging, movement picked up to 141 loads. While showlist numbers are up this week, ongoing gains in the product market signal that any decline in the cash market this week will likely be limited. April live cattle are trading in line with the low end of last week’s cash action.
Are cash hogs near a low?... Pork movement improved to 348.83 loads on Tuesday on a 65-cent dip in the pork cutout value. All cuts except ribs softened. Nevertheless, futures posted strong gains yesterday as traders were encouraged by firmer cash hog bids in the Iowa/Minnesota market on Monday -- the first in roughly three weeks. But given recent cash weakness, traders will wait for more improvement before assuming the market is working on a low. Cash prices softened in the western Corn Belt but strengthened in the eastern Belt yesterday, according to the National Daily Hog and Pork Summary.
Overnight demand news... Turkey bought 44,000 MT of animal feed corn to be sourced from the EU and Moldavia. Iraq issued an international tender to buy at least 50,000 MT of wheat from the U.S., Canada or Australia. Tunisia issued an international tender to purchase 67,000 MT of soft milling wheat. Taiwan bought around 65,000 MT of corn, likely from Brazil. Japan received no offers in its simultaneous buy and sell auction seeking 120,000 MT of feed wheat and 200,000 MT of feed barley. South Korea purchased 135,000 MT of feed wheat from optional origins.
Today’s reports:
- 9:30 a.m., Weekly Ethanol Production -- CIA
- 2:00 p.m., Broiler Hatchery -- NASS
- 2:00 p.m., Poultry Slaughter -- NASS
