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Profit Tracker: Feeder Margins Lower, Packer Jackpot

Fri, 07 Jul 2023 19:16:15 GMT

Cattle feeding margins declined $27 to total an average loss of $55 per head for the week ending August 23, 2019. The decline was the second week of average losses following the Tyson plant fire at Holcomb, Kan. Cash cattle prices averaged about $108, or $5 lower than before the fire. Packer margins continued to improve reaching $491 per head, according to the Sterling Beef Profit Tracker.

(Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

A year ago cattle feeders were losing an average of $77 per head on cash prices of $109. Feeder cattle represent 71% of the cost of finishing a steer compared to 74% a year ago.

The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins decline $7 per head with profits of $21. Lean carcass prices traded at $69.70 per cwt., $3.34 per cwt. lower than the previous week. A year ago pork producer margins were negative $47 per head. Pork packers saw average profits of $16 per head, $7 less than the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $138 per cow. That would be 14% lower compared to the $161 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $62 per head in 2019, which would be $38 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $155 per head in 2019, about $11 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average profit of $13 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $16 per head in 2019, about $4 less than the $20 per head profits of 2018.

Related stories:

Lower Board Hinders Cash Rally

Profit Tracker: Packer Margins Went Up How Much?!

GIPSA Final Interim Rule Implementation Delayed

Thu, 22 Sep 2022 02:58:41 GMT

The rule had been scheduled to take effect April 22. But a notice in tomorrow’s Federal Register will push back its effective date by 180 days and include a 60-day comment period (from April 12 to June 10) on whether the interim finally rule should be withdrawn or delayed further. This means the so-called “Farmer Fair Practices Rules” will not take effect until Oct. 19, if at all.

Livestock groups say today’s delay shows the Trump administration is taking the time to review the regulation and public comments on it, particularly in regard to its negative impact on the livestock industry. “We are confident that once the new secretary of agriculture takes office, he will recognize what a disaster this rule is for producers, meat packers and processors, retailers and consumers,” says NAMI CEO Barry Carpenter.

The interim final rule would broaden the scope of the Packers and Stockyards Act (PSA) of 1921 related to using “unfair, unjustly discriminatory or deceptive practices” and to giving “undue or unreasonable preferences or advantages.” The rule would deem such actions violations of federal law, even if they didn’t harm competition or cause competitive injury.

An Informa Economics study found that the GIPSA rules could cost the U.S. pork industry more than $420 million annually, with the bulk of the cost related to PSA lawsuits brought under the “no competitive injury” provision of the interim final rule, NPPC details.

NCC says that the agency’s interim final rule and proposed rules would “inflict billions of dollars of economic harm to American agriculture, exceed GIPSA’s statutory authority, and represent an arbitrary and capricious abuse of federal regulatory authority.”

And NAMI’s Carpenter says that both the interim final rule and the previously proposed GIPSA rules “violate the intent of Congress, numerous court rulings and the Administration’s desire to reduce regulations and control costs, and they will undermine the meat industry’s ability to meet consumer demand.”

After the Bell: Grain Markets Rally Ahead of Holiday

Thu, 22 Sep 2022 02:58:17 GMT

Corn: Corn futures posted gains of 6 1/2 to 7 1/2 cents through the May contract today, but that was midrange. Corn futures followed the soybean and wheat markets higher, but futures backed well off session highs as midday weather models signaled temps won’t be as hot as previously thought across the Corn Belt.

Soybeans: Soybean futures gapped higher overnight and sharply extended to the upside, but gains were pared late as the U.S. midday weather model signaled temps won’t be as hot as previously expected across the Corn Belt. Futures still ended 20 1/4 to 26 cents higher through the March contract.

Wheat: Spring wheat futures settled 33 1/4 to 44 1/4 cents higher, while winter wheat ended mostly 28 to 30 cents higher. While that was off session highs, it was still a high-range close. Weather was and will likely remain the story in the wheat market. Spring wheat condition ratings have plummeted amid hot, dry weather and the forecast calls for more of the same through mid-July.

Cotton: Cotton futures finished modestly lower Monday amid a sharp rally in the U.S. dollar. Cotton futures ignored strong gains in the grain and soy markets. A drop in crop condition ratings last week, still-strong export demand and USDA’s lower-than-expected cotton plantings estimate helped the market rally last Friday.

Cattle: Live cattle futures ended 32 1/2 to 55 cents lower through the December contract. Feeder cattle finished $1.25 to $1.82 1/2 lower through the January contract. Cattle futures firmed on modest corrective buying last week, but the upside is likely to remain limited this week.

Hogs: July lean hog futures finished 7 1/2 cents higher today. The August through December contracts posted gains of 65 cents to $1.10. Traders quickly digested the Hogs & Pigs (H&P) Report and continued to narrow the discount summer-month contracts hold to the cash index. Traders will keep a close eye on the pork market for signs of post-holiday features

First Thing Today: Corn Ratings Improve as Spring Wheat Drops

Wed, 21 Sep 2022 07:45:18 GMT

Spring wheat leads overnight gains... Corn futures stuck to a narrow range overnight and are steady to fractionally lower as of 6:30 a.m. CT. Soybeans are trading high-range and up 3 to 4 cents. Spring wheat futures shot higher overnight thanks to a bigger-than-expected decline in crop condition ratings and futures are currently trading high-range and up 5 to 7 cents. HRW wheat futures are up 4 to 5 cents, while SRW wheat futures are around 3 to 4 cents higher. The U.S. dollar index and crude oil futures are both slightly lower.

PF CCI: Corn ratings improve as spring wheat drops... When USDA’s initial crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the corn crop came in at 370.68 points, up 6.91 points from last week thanks to some welcome sunshine and warmth. The spring wheat crop, on the other hand, is dealing with drought conditions that resulted in a 15.68-point plunge in ratings to 351.53 points. The HRW wheat crop fell 5.56 points to 323.27 points, while the SRW wheat crop gained 3.40 points to 369.88 points.

Consultant leaning down on corn yield... Crop Consultant Dr. Michael Cordonnier left his average corn yield forecast at 169 bu. per acre this week, but he now has a lower bias going forward. He sites two concerns -- “problematic spring planting in the eastern Corn Belt ... [and] developing dryness in the northwestern Corn Belt.” Cordonnier also made no change to his average soybean yield projection that stands at 49 bu. per acre, with a neutral bias forward. Also of note, Cordonnier says that corn acreage is likely declining relative to the Prospective Planting Report, while soybean acres are rising. He estimates that wet conditions this spring will likely cause corn acres to decline between 500,000 acres and 1.25 million acres from March intentions. His best guess is that soybean acres will rise 500,000 acres.

Weather concerns mount for spring wheat... USDA made a larger-than-expected cut to the amount of spring wheat rated in “good” to “excellent” condition yesterday, confirming dry conditions on the Northern Plains are taking a toll on the crop. The forecast holds limited chances for relief. Spring wheat crops along the Canadian border are also dealing with dryness that has been tough on spring wheat. Meanwhile, the month of May was the coldest so far this century in Russia, and this has been paired with rainy weather that has kept spring grain sowing running behind year-ago. However, SovEcon reports damage has been limited.

Indian weather watcher ups monsoon forecast... India’s monsoon rainfall will likely total 98% of the long-term average, the India Meteorological Department (IMD) said today. This was up two percentage points from its April forecast. IMD goes on to detail that rainfall will likely total 96% of its long-term average in July and 99% of the average during August.

Argentine inspectors delay strike... Argentine inspectors have agreed to push back a three-day nationwide strike that was set to begin just after midnight on Monday. If negotiations do not yield an agreement by Friday, workers will begin striking on June 13.

Inspection authority shifts back to Egypt’s ag ministry... An Egyptian court struck down a government decree that transferred the responsibility of inspecting strategic ag imports from the ag ministry’s quarantine body to a trade ministry body. The shift in responsibility back to the ag quarantine body is notable since it was the one viewed as pushing the zero-tolerance stance on ergot that basically cut off grain shipments to the country for a period.

Sugar trade talks continue, with tensions over key issues... U.S. and Mexican negotiators are aiming for wrapping up “final technical consultations” by this afternoon, with key issues including what type of sugar Mexico can supply to the U.S. if domestic U.S. sugar producers or other countries cannot meet demand. Mexico wants to send more semi-refined sugar to the United States. U.S. Commerce Secretary Wilbur Ross Monday extended the talks for 24 hours, saying “The two sides have come together in quite meaningful ways, but there remain a few technical details to work out. We are quite optimistic that our two nations are on the precipice of an agreement we can all support, and so have decided that a short extension of the deadline is in everyone’s best interest.”

Perdue chides Canada on ‘underhanded’ dairy policy... Canada needs to get rid of the Class 7 pricing system it put in place and disrupted shipments of U.S. milk to Canada, according to USDA Secretary Sonny Perdue. “I made it very clear that the Class 7 designation we felt was unfair, undercutting this [U.S.] industry that grew up south of the border,” Perdue told reporters in Toronto. "... The quick win would be to do away with Class 7 milk, which we think is a very unfair, underhanded circumvention of WTO [World Trade Organization].” Perdue said he also raised concerns about how U.S. wheat is priced in Canada, and about how U.S. wines are displayed for sale in some provinces.

Choice beef surges... Choice boxed beef values surged $3.11 to start the week and Select values rallied $1.38 on solid movement of 123 loads. This could signal some last-minute purchases for Father’s Day. Showlist numbers are down a net 1,000 head this week as declines in Nebraska and Texas were nearly offset by gains in Colorado and Kansas. Near-steady showlists, boxed beef market strength and weights that are well under year-ago levels bode well for feedlots in this week’s cash negotiations.

Lean hogs face pressure to start the week... Traders took advantage of recent gains in the lean hog market by booking some profits on Monday and the move below the five-day moving average and last week’s lows triggered some technical selling. Pressure also stemmed from the premium nearbys hold to the cash hog index. Traders will watch the cash hog market tomorrow, as gains could return some buying to the market.

Overnight demand news... Jordan made no purchase in its international tender to buy 100,000 MT of milling wheat. Iraq tendered to buy at least 50,000 MT of hard wheat, with the U.S. having the lowest offer. Japan tendered to buy a total of 159,610 MT of food-quality wheat from the U.S., Canada and Australia in its regular tender. Algeria tendered to buy a nominal 50,000 MT of milling wheat from optional origins.

Today’s reports:

8:00 a.m., U.S. Bioenergy -- ERS

Five Facts About the Ag Labor Shortage

Wed, 28 Jul 2021 17:36:50 GMT

Farm labor continues to be an issue, as trends like a generational shift translated into different job expectations and more global competition. Consider these five issues affecting your ability to find qualified workers:

1. Labor shortages are hitting ag hard
Concerns about labor shortages in the U.S. continue to grow in 2021. The June Ag Barometer from Purdue University found nearly two-thirds (66%) of respondents said they either had “some” or “a lot of difficulty” hiring adequate labor, compared to 30% in 2020. Farm Journal reported on the shortage , showing restaurants and food retail , lumber and rural non-farm employment are also affected.

(Farm Journal)

2. But farm labor was a struggle before COVID-19
Two years ago, Farm Journal’s 2019 Ag Labor Study found both employers and employees were struggling. From the employer perspective, trends like a generational shift translated into different job expectations and more global competition, and the skills required were evolving due to automation and technology updates. From the employee perspective, no paid time off or health insurance was the norm. Even so, the study also found that dairy producers in particular were paying more than they ever had before.

(Farm Journal)

3. Farm workers have many options
According to Farm Journal’s 2021 Ag Labor Survey, 59% of row crop and ag retailer respondents say looking for a job is either easier or the same as before. For respondents who said finding a job was easier, the top reasons were more jobs and less competition. For those who said their ability to find a job was about the same, they reported no real changes to the job market compared to previous years. For those who have struggled, the biggest reason was employers who had higher requirements.

(Farm Journal)

4. Meanwhile, farmers and ag retailers are feeling the same pinch
The 2021 Farm Journal Labor Survey found most farm employers (87%) and ag retailers (91%) are finding it harder to fill positions. Many believed unemployment benefits were enough to keep applicants away. Others felt that it’s now harder to compete with other industries offering better pay, hours and benefits, especially if those jobs aren’t in rural areas. Some farmers are now considering hiring H-2A workers for the first time, while retailers continue to struggle to find qualified candidates.

(Farm Journal)

5. It’s not just fewer available workers. New would-be employers are looking to compete
According to the 2021 Farm Journal Labor Survey, 44% of farmers who don’t currently employ workers are looking to hire in the next three years. They are entering the hiring market at a time when farmer videos go viral on TikTok as they point out crops on the verge of going to waste and face hardships to get H-2A workers across the border. Wages are on the rise, and Purdue University’s Jayson Lusk says lower-level employees are quitting to make just as much not working. Meanwhile, commodity prices are volatile but remain high. The one silver lining is that some economists expect inflation to ease off historic highs later this year.

(Farm Journal)

Fertilizer Institute Accepting 4R Advocate Nominations

Fri, 20 Nov 2020 05:50:46 GMT

The Fertilizer Institute (TFI) is now accepting nominations for the 2020 4R Advocate awards. This program recognizes farmers and fertilizer retailers for their commitment to nutrient stewardship using the 4R’s (use of the right fertilizer source, at the right rate, the right time and in the right place). Using suites of 4R practices, farmers improve their economic returns and decrease environmental impact.

Advocate nominations are due by October 31, 2019. Details, supporting materials and entry forms for retailers and industry partners to nominate farmers are available online at nutrientstewardship.org/advocates/become-an-advocate/ . Entry forms offer easy directions for farmers and retailers to document their efforts to apply the 4R Nutrient Stewardship principles and to chart results. Applicants can also read previous winners’ stories on the same website.

“Fertilizer retailers are on the front lines as trusted advisers for farmers, helping them implement the 4Rs in their fields,” said Peyton Harper, TFI’s Senior Manager, Stewardship and Sustainability Programs. “The 4R Advocate program helps us highlight these partnerships throughout the year and demonstrate to the fertilizer industry, the agricultural community, and policy makers the real-world benefits the 4Rs have on the economic and environmental bottom line.”

Now in its ninth year, the 4R Advocate Program has recognized 80 agricultural producers and retailers, farming 175,625 acres in 20 states. These forward-thinking individuals serve as examples by championing sound nutrient stewardship.

The 2020 4R Advocate winners will be announced in mid- December. Winners must be able to participate in an all-expense paid trip to the 2020 Commodity Classic, an approximate $2,000 value, which takes place Feb. 27 through Feb. 29, in San Antonio, Texas. TFI will recognize the 2020 4R Advocate growers and nominating retailers in an awards banquet that takes place during the event.

Raising awareness and adoption of 4R nutrient stewardship is a top priority for the fertilizer industry. The industry is working to build awareness of the 4Rs among growers and agricultural stakeholders at agricultural trade shows, field days, company visits and other outreach opportunities.

First Thing Today: Crop Concerns Mount Amid Wet Forecast

Sun, 15 Nov 2020 19:35:32 GMT

Firmer start to the week... Corn futures are around a penny higher to start the week, while soybeans are up 3 cents. Wheat futures are also enjoying gains around 3 to 4 cents in the HRW wheat market and around 2 to 3 cents in the SRW and HRS wheat markets. The U.S. dollar index is down slightly, while crude oil futures are posting gains.

Crop concerns mount amid wet forecast... Concerns about getting crops planted/replanted are mounting after wet, cool weather kept many farmers out of the field late over the weekend and periodic showers are expected for the Midwest throughout the week. The National Weather Service forecast for May 27-31 calls for wet conditions in southern and eastern areas of the Corn Belt, with normal conditions expected elsewhere. Cool temps are expected in the far western Belt, with heat likely in Ohio. Other areas of the Midwest should see normal temps. Meanwhile, a flash flood watch is currently in effect for Gulf Coast regions, and into Georgia after heavy weekend rains.

Week ahead features budget efforts, Branstad vote and health-care estimates... President Donald Trump’s fiscal year 2018 budget proposals and, more importantly, the House Budget Committee’s are likely to include mandatory budget cuts, including agriculture subsidies. On the hearing front, topics include Environmental Protection Agency rulemaking, Russia, international trade, IRS oversight, Iran, atomic energy and more. The House will take up a measure easing permit requirements for pesticide usage, and the Senate is expected to approve Iowa GOP Governor Terry Branstad as the U.S. ambassador to China late today. On Wednesday, the Congressional Budget Office releases its analysis of the House-passed health-care reform bill.

ADM completes big port expansion in Brazil... The Brazilian unit of Archer Daniels Midland Co. (ADM) recently announced it had completed a 33% expansion in its Santos port terminal’s export capacity. It will now be able to ship 8 MMT of grain per year. ADM is also analyzing a project to improve rail infrastructure around the port area, in collaboration with other operators. Brazil recently announced it would extend the duration of operating licenses, which has helped attract investment for such plans.

Analysts disagree as to whether Egypt will continue to buy U.S. wheat... Last week, Egypt purchased U.S. wheat for the first time since February 2015, as the combination of inexpensive HRW wheat supplies and lower freight prices helped the U.S. made prices competitive. Some traders say this business was more of a stopgap measure until Egypt’s favored Black Sea region supplies become more readily available. But others disagree, noting that if the U.S. can remain competitive, it could help us work through a hefty stockpile.

China to hike sugar import tax... China will introduce another tariff on sugar imports aimed at stemming imports that have “seriously damaged” its domestic industry. Currently, China allows 1.94 MMT of sugar imports at a 15% tariff, as per its World Trade Organization commitments, and imports beyond that are subject to a 50% tax. The new ruling will add an extra 45% tax to these imports, taking the total tax to 95% for fiscal year 2017. In FY 2018, that level will fall to 90% and in FY 2019 it will drop to 85%. While the added duty could slow imports from countries like Brazil and Thailand and help align sugar import prices with domestic ones, traders note the duties will likely increase smuggling of the sweetener through China’s southern border. In addition, some third-party nations that are excluded from the tariffs may begin shipping sugar from bigger producers looking to bypass the tariffs.

Details on U.S./China beef deal may be in place by end of June... Talks to restart U.S. beef exports to China have advanced quickly and final details should be in place by early June, USDA said Friday. This timeline should enable beef companies to to sign contracts with Chinese buyers that meet the deadline for shipments to begin by July 16. Ranchers are logging animals’ movement and are preparing to stop the use of beta-agonist growth drugs, as per the terms of the deal. The market access comes at a key time, as Brazil is dealing with corruption scandal after scandal, several of which involve its meat sector.

Cold Storage report out today... At 2:00 p.m. CT, USDA will release its update on the amount of frozen meet in the nation’s freezers as of April 30. Last month’s report showed frozen beef stocks lighter than expected at 464.469 million lbs. at the end of March, with frozen pork stocks at 555.052 million pounds, which was a bit higher than traders anticipated.

Cattle futures start week at double-digit discount to cash... Cash cattle trade took place at mostly $134 last week, which is roughly $10 above where June live cattle settled on Friday. While cash prices are expected to soften near-term, that spread is quite wide. Meanwhile, boxed beef prices pulled back late last week, confirming ideas the market was near a top. USDA’s Cold Storage Report will provide additional product market insight today.

Lean hog seasonals favor market bulls... Cash hog bids softened to close out a mixed week of price action. But we do not expect cash weakness to last since hog and pork production typically falls to annual lows in late June and early July. Plus, the Memorial Day to July Fourth period is peak grilling season.

Weekend demand news... South Korea bought 55,000 MT of soybean meal, likely from South America. Saudi Arabia bought 1.5 MMT of animal feed barley.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Chickens and Eggs -- NASS
2:00 p.m., Cold Storage -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: House Clears FY 2017 Budget with Help of Democrats

Sun, 15 Nov 2020 19:35:26 GMT

Grain and soybean markets set back overnight... Corn futures saw two-sided trade overnight, but as of 6:30 a.m. CT most contracts are trading low-range and down 2 cents. Soybeans are also under pressure, with most contracts posting losses of 2 to 5 cents. Winter wheat futures are also down 2 to 5 cents, while spring wheat futures are fractionally to 2 cents lower. The U.S. dollar index is slightly lower, and crude oil futures are extending their slide.

Day 2 of Wheat Tour: Disease a concern... On Day 2 of the Wheat Quality Council’s wheat tour, scouts traveling through the western third of Kansas found an average yield of 46.9 bu. per acre, down from last year’s 49.3 bu. per acre but up from the five-year average of 39.1 bu. per acre. But scouts were unable to evaluate many of the fields in that area of the state due to snow. And even before the crippling winter storm, wheat was struggling due to wheat streak mosaic virus, with Kansas Wheat’s Aaron Harries, VP of Research and Operations, saying the virus will impact yields more so than snow damage. He also said it was a bit too early to assess recent freeze damage. Scouts will travel from Wichita to Manhattan today, sampling fields in central and eastern Kansas. Final tour results and production guesses will be out this afternoon.

Industry group reports Oklahoma’s winter wheat crop has yield prospects similar to year-ago... Scouts with the industry group Plains Grains traveled into Oklahoma to sample fields on Day 2 of the Wheat Quality Council’s tour. They estimated the state’s winter wheat crop would yield 33.7 bu. per acre this year, which would be roughly in line with what the group projected last year but down from USDA’s official 2016 estimate of 39.0 bu. per acre, which was a record. Plains Grains projected Oklahoma’s wheat crop will total 100.1 million bushels.

Export sales report expected to reflect still-strong soybean demand... 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 700,000 MT to 1.1 MMT, soybean sales between 400,000 MT and 800,000 MT, wheat sales of 200,000 MT to 550,000 MT, soymeal sales ranging from 50,000 MT to 250,000 MT and soyoil sales between 0 and 32,0000 MT.

House clears FY 2017 budget with help of Democrats... The House on Wednesday cleared a budget agreement that will keep the government operating for the rest of fiscal year ending Sept. 30. The House approved the measure 309-118. Democrats voted 178-15 in favor of the measure; Republicans voted 131-103 in support. The measure now moves to the Senate where it is expected to pass it as soon as today and be signed into law by President Donald Trump.

Global food prices continue to slide... The Food and Agriculture Organization of the United Nations’ (FAO) Food Price Index stood at 168.0 points in April, which was a 3.1-point (1.8%) decline from March but still up 15.2 points (10%) from year-ago. This was the third month in a row where global food prices declined. FAO details that as was the case in March, all commodity indices except meat values declined last month. Global cereal production is likely to fall just 0.4% from last year’s record high, according to FAO. It details that the world’s 2017 wheat crop will likely total 740 MMT, down 20 MMT (2.6%) from last year’s record. This is basically steady with its projection last month.

Record-high wheat crop prospects for India... India’s 2017-18 wheat crop will likely hit a record 96.5 MMT, up 9.5 MMT from the year prior, projects a USDA attaché in the country. The post explains that favorable weather during key development stages will likely push up yields. Due to the expected production increase, the attaché expects imports to slow to 4 MMT in 2017-18, down 2 MMT from the year prior. None of that grain is expected to come from the United States.

Smaller Kazakhstan wheat crop likely for 2017-18... Kazakhstan will likely produce a 13 MMT wheat crop in 2017-18, down 2 MMT from the year prior, estimates a USDA ag attaché in the country. The post details that acreage is likely to fall in the coming marketing year. But despite the smaller crop size, the post expects exports to hold steady with the previous marketing year in 2017-18 at 7.0 MMT.

China’s Cofco planning major expansion in hog production... Cofco Corp. plans to aggressively expand its pig farm capacity by 2 million head to 5 million hogs per year by 2020, according to the company’s Vice President Ma Jianping. The state-owned company also says it will need to boost imports to meet growing demand.

Cash cattle prices tear higher... Cash cattle trade got underway at prices ranging from $144 to $147 across the Plains yesterday, up notably from last week when trade ranged from $135 to $140 for an average price of $136.22, according to USDA. The weekend snowstorm stressed animals and boxed beef prices continue to climb. This combination gave feedlots the advantage in this week’s negotiations, despite a big increase in showlists this week. Futures remain well below the cash, signaling another surge to the upside is possible today. And after yesterday’s strong gains limits are expanded.

Lean hogs also shoot higher on cash market gains... Lean hog futures have also benefited from gains in the cash market this week, which have stoked optimism supplies are tightening seasonally. In addition, traders are watching beef prices surge and speculating this could turn some consumers to pork over the near term -- especially if beef prices are slow to retreat, as has been the case in the past.

Overnight demand news... Tunisia issued an international tender to buy 75,000 MT of durum wheat from optional origins. Pakistani importers recently purchased around 65,000 MT of soybeans to be sourced from the U.S., as well as more than 100,000 MT of rapeseed likely to come from the Black Sea region.

Today’s reports:

7:30 a.m., Weekly Export Sales -- FAS
7:30 a.m., Drought Monitor -- USDA/NWS
8:00 a.m., Milk Cost of Production -- ERS
2:00 p.m., Latest U.S. Agricultural Trade Data -- ERS
2:00 p.m., Dairy Products -- NASS

First Thing Today: Cool and Wet 6 to 10-day Forecast for Much of the Corn Belt

Sun, 15 Nov 2020 19:35:26 GMT

Good morning!

Mild position evening overnight... Corn futures faced pressure overnight and most contracts are around a penny lower as of 6:35 a.m. CT. Soybean futures are fractionally to 1 cent higher after favoring the upside overnight. Winter wheat futures are down 3 to 4 cents, while spring wheat is just a penny or two lower. The U.S. dollar index is under pressure, while crude oil futures are enjoying strong gains.

Cool and wet 6 to 10-day forecast for much of the Corn Belt... The National Weather Service forecast for May 20-24 calls for above-normal precip across the Corn Belt and Plains, with the exception of the Dakotas, where normal to dry weather is anticipated. Temps are also expected to be cool across the western Belt and into the Plains. Warm temps are expected for southeast Illinois eastward. Rains is in the outlook for the northern and western Corn Belt this week, but producers in these areas have been able able to take advantage of near-ideal conditions leading up to and over the weekend.

NOPA expected to report further slowing of crush... Members of the National Oilseed Processors Association (NOPA) likely crushed 145.739 million bu. of soybeans in April, according to traders surveyed by Reuters. This would be down 7.321 million bu. from March and a 1.875 million-bu. drop from year-ago. Soyoil stocks are expected to come in around 1.777 billion lbs. at the end of April, which would be down from 1.815 billion lbs. at the end of March and 1.943 billion lbs. the year prior. The report will be released at 11:00 a.m. CT.

Attention remains on White House... The Senate is in today but House members return Tuesday. The biggest focus will probably remain on the White House and whether any new shakeups take place or statements are made that spark uncertainty. Leaders of the intelligence panels in both chambers say they are continuing to look into Russia’s activities in the 2016 election. Hearings on tap in the House will include issues for native Americans, FAA and aviation, South American energy, fiscal 2018 matters and the rural economic situation update. On the Senate side, various committees will hold confirmation hearings on nominees for sub-Cabinet positions at several agencies. Medicare, infrastructure, operating the government on less money and other policy matters will also be on tap.

Monsoon rains move in early... Monsoon rains hit India’s Andaman and Nicobar islands on Sunday, which was six days ahead of the norm, the domestic weather office reports. This comes after the head of India’s Meteorological Department last week said monsoon rains will likely be greater than previously expected as El Nino concerns have eased.

China’s subsidies for soybean growers to top those for corn producers... China will pay higher subsidies to soybean farmers than corn growers in its top grain producing provinces. The country is still working to draw down corn stocks after abandoning its state stockpiling system. Details on the subsidy levels in Heilonjiang and Liaoning provinces have not yet been released.

Disappointing economic signals out of China... China’s factory output climbed 6.5% from year-ago levels in April, down 1.1 percentage points from March, while fixed-asset investment climbed 8.9% for the first four months of the year, with both figures below expectations. Analysts surveyed by Reuters had expected factory output to climb 7.1% and fixed asset investment to climb 9.1%. This adds to recent data showing momentum is slowing in China after a strong first quarter.

Brazil investigating loans to JBS SA... Police in Brazil are investigation whether the state development bank BNDES issued fraudulent loans to JBS SA, the world’ s largest meatpacker. The two brothers, Joesley and Wesley Batista, that serve as chairman and chief executive at JBS have or will be brought in for questioning. The company issued a statement saying all investments it received from BNDES followed laws and regulations governing capital markets. The situation may put plans for a $1 billion initial public offering of a food processing unit on hold. Such plans were already delayed due to tepid investor interest and other scandals involving the company. The Batistas are barred from making any structural changes at JBS until the probe is concluded.

Renewed buying interest for cattle?... News that the Trump administration had reached a trade deal to reopen the Chinese market to U.S. beef by mid-July bolstered futures late last week. As the market gauges what trade potential this might entail, prices could climb even higher. In addition, futures start the week at a steep discount to last week’s cash cattle trade that took place at an average price around $138.

Lean hogs trading well above cash hog index... Strong processing demand has helped bolster cash hog prices, which has in turn lifted futures. But with the new front-month trading at nearly a $9 premium to the cash hog index, there is risk of some profit-taking near-term.

Weekend demand news... Turkey tendered to buy up to 180,000 MT of corn for animal feed. Iraq’s bought 50,000 MT of wheat from Australia, despite the U.S. having the lowest offer in the tender.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
11:00 a.m., Crush Report -- NOPA
2:00 p.m., Feed Grains Yearbook tables -- ERS
2:00 p.m., CE: Cattle 2016-2017 -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: USDA Data Sends Prices Lower Overnight

Sun, 15 Nov 2020 19:35:26 GMT

USDA data sends prices lower overnight... Corn and soybean futures softened overnight in response to USDA’s report showing planting of these crops was more advanced than the market anticipated. Corn is down a penny or two, while soybeans are fractionally to 1 cent weaker. Wheat futures also softened amid just a small downtick in condition ratings and a surge in spring wheat planting over the past week. While SRW and HRS wheat futures are mostly 2 cents lower, the HRW wheat market is down 4 cents. The U.S. dollar index is posting solid losses, while crude oil futures are slightly higher.

PF CCI reflects modest dip in HRW and SRW ratings... 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 fell 2.55 points to 326.72 points, with Kansas actually notching a slight increase in ratings from last week. The SRW wheat crop fell 1.91 points to 364.37 points. While the SRW wheat crop is rated just 4 points (roughly) under year-ago, the HRW wheat crop is down more than 34 points from last year at this point. Get more details .

Wilbur Ross, Mexico’s Guajardo agree to continue talks on sugar trade... Mexico Economy Minister Ildefonso Guajardo met with U.S. Secretary of Commerce Ross in Washington, with Guajardo saying it is important to find a solution that maintains balance in the sweetener market. The two officials agreed to “maintain continuous and open dialogue in the coming days,” according to a statement from the Mexico’s ministry. Guajardo and Ross also discussed the timing of North American Free Trade Agreement talks after the confirmation of Robert Lighthizer as U.S. Trade Representative.

Cordonnier takes preliminary guess at U.S. yields... Crop Consultant Dr. Michael Cordonnier took a preliminary stab at estimating the size of the 2017-18 crops, noting that the “mildly problematic” start to the growing season has him beginning with “somewhat conservative” corn yield estimate of 169 bu. per acre, which would still be the third highest yield on record. He projects a national average. soybean yield of 49 bu. per acre, which would be the second highest on record after last year’s 52.1 bu. per acre. “This is just the first ‘guess’ of the growing season and as we all know, these yield estimates are going to change as the growing season progresses,” Cordonnier warns.

Strong yields in northern Argentina prompt consultant to raise production estimate... Cordonnier now says Argentina will likely produce a 56.5 MMT soybean crop in 2016-17, up 1.5 MMT from his estimate last week thanks the “excellent soybean yields” from northern areas of the country. He also upped his Argentine corn crop estimate by 2 MMT to 39 MMT, noting good yields in northern areas. He made no change to his Brazilian soybean or corn crop estimates that stand at 111 MMT and 92 MMT, respectively.

Monsoon rains to hit India’s coast ahead of schedule... Monsoon rains will likely arrive on India’s southern Kerala coast on May 30, two days ahead of schedule, according to K.J. Ramesh, director general of the India Meteorological Department. Forecasters have upped the amount of accumulation they expect this rainy season to bring amid fading of El Nino concerns.

Canada’s revenue cap on major railways will reportedly remain in place... Canada’s Minister of Transport is set to unveil draft legislation today that sources cited by Reuters indicate will maintain a revenue cap on western grain that Canadian National Railway Co. and Canadian Pacific Railway Ltd. haul for export. This cap has been in place since 2000 and is meant to balance the market power of the two big railways with that of farmers and grain companies. A study ordered by Canada’s previous government recommended phasing out the revenue cap program that railways oppose.

Cattle futures lower on concerns a top is near for cash and product markets... Cattle futures faced heavy pressure Monday amid ideas the product and cash markets are near a top with Memorial Day buying winding down. Boxed beef prices were mixed to start the week and movement was light. Plus, showlist estimates are up a net 7,000 head this week. In addition, traders are skeptical that China will truly begin importing beef from the U.S. by mid-July, which led to some profit-taking to start the week.

Hogs continue to consolidate... Choppy cash hog bids and light pork movement Monday led to mixed price action in the lean hog market. But traders remain hopeful that high beef prices will shift some demand to pork and that seasonal supply tightening will keep the cash market pointed higher. Cash hog bids were mixed to start the week.

Overnight demand news... Japan is seeking a total of 115,491 MT of food-quality wheat from the U.S. and Canada.

Today’s reports:

11:00 a.m., Livestock, Dairy, & Poultry Outlook: May 2017 -- ERS
2:00 p.m., Sugar and Sweeteners Outlook: May 2017 -- ERS
2:00 p.m., Turkey Hatchery -- NASS

First Thing Today: All Eyes on USDA Reports

Sun, 15 Nov 2020 19:35:22 GMT

Position evening preceding reports... Corn futures are up a penny after a quiet overnight session. Soybeans enjoyed gains at times overnight, but the market is currently trading low-range and steady to down a penny. Winter wheat futures are fractionally to 2 cents higher amid some corrective short-covering. The U.S. dollar index is up slightly, while crude oil futures are under light pressure.

Much-anticipated acreage and grain stocks data out today... Traders surveyed by Reuters expect USDA’s Prospective Planting Report to show farmers plan to hike soybean plantings to 88.214 million acres this growing season at the expense of corn and spring wheat, which are expected to come in around 90.969 million acres and 11.358 million acres, respectively. Cotton planting intentions are also expected to climb notably from 2016 to 11.409 million acres. March 1 grain stocks are anticipated to be hefty, with traders expecting corn stocks of 8.534 billion bu. (highest on record), soybean stocks of 1.684 billion bu. (second highest on record) and wheat stocks of 1.627 billion bushels (highest since 1988). USDA will release this data at 11:00 a.m. CT.

Two executive orders coming today on trade policy... President Donald Trump is slated to sign two executive orders today. The first would direct his administration to look at the underlying causes of U.S. trade deficits with China and other countries. The second would instruct Homeland Security Secretary John Kelly to strengthen the collection of penalties on unfairly traded foreign goods. The mandates come a week before Chinese President Xi Jinping is set to visit Trump at Mar-a-Lago in Florida.

Heavy rains threaten Argentine crops... A frontal boundary moving across central Argentina is expected to bring heavy rainfall over the weekend, with meteorologists at BAMWX.com noting that widespread accumulation totals of 3 to 6 inches are possible in western production regions with local amounts of up to 12 inches possible. Obviously, this poses the threat of flooding and crop damage.

AgroConsult hikes bean crop peg following tour... Following its crop tour through main growing regions of Brazil, AgroConsult hiked its soybean crop estimate for the country by 2.3 MMT to 113.3 MMT. The consultancy noted record average soybean yields and near-perfect weather. Brazil will likely ship 61.4 MMT of soybeans in 2017, according to AgroConsult. This is up 400,000 MT from its projection earlier this month. AgroConsult maintained its estimate of Brazil’s corn crop at 95 MMT, which would be a record. Also of note, the consultancy’s chief analyst says grain storage may be a problem this year.

Stronger-than-expected Chinese manufacturing growth... China’s official Purchasing Managers’ Index climbed by 0.2 points from February to 51.8 in March, the highest reading since April 2012 and above the 50.0-point mark that separates contraction from expansion in the factory sector. This also topped expectations for a steady reading in March. New orders climbed 0.3 points to 53.3.

A rise in India’s currency creating export opportunities for others... A rise in India’s currency makes imported cotton cheaper than domestic supplies. Therefore, senior industry officials and executives expect the country’s cotton imports to surge 36% to 3 million bales this season. The elevated rupee has also slowed India’s exports of the fiber, with some projecting it will export just 5 million bales in 2016-17, down 30% from year-ago. Pakistan, Bangladesh, China and Vietnam are the main buyers of Indian cotton. This situation is helping its competitors like the U.S., Brazil and some African nations

McDonalds to transition to fresh beef in quarter pounders... McDonald’s USA plans to use entirely fresh, never frozen beef in its quarter pounders served at the majority of its restaurants by mid-2018. The burgers will be cooked when they are ordered. The company has been testing the shift to fresh beef at restaurants in Texas and Oklahoma.

Beef and cash prices soften... Choice and Select boxed beef values fell $1.71 and $2.21, respectively, on Thursday but this did spur decent movement of 130 loads. Choice values are down $7.07 for the week while Select cuts have fallen $7.72. This has cut into packer profit margins (though they are still in the black) and given them the upper hand in cash negotiations. Trade picked up yesterday in Kansas at $124 to $128, in Texas at $126.50 to $128, and in northern locations at prices ranging from in $128 to $132. This is down from last week’s action at $130 to $134.50 but well above where futures are trading.

H&P Report about as bearish as expected... USDA’s Hogs & Pigs Report confirmed expected hog herd expansion. The steep price break leading up to the report and the bounce preceding its release could signal that the negative data is already baked into prices. Adding to such ideas is the severely oversold condition of the market. But with market hog inventories up more than 4%, buying interest outside of corrective trade will be limited.

Overnight demand news... Jordan issued new international tenders to buy 100,000 MT of hard milling wheat and 100,000 MT of animal feed barley from optional origins. Tunisia purchased around 100,000 MT of soft milling wheat and 50,000 MT of feed barley to be sourced from optional origins.

First Thing Today: Freezing Temps and Flooding Bolsters Markets

Sun, 15 Nov 2020 19:35:22 GMT

Weather concerns lift futures... Wheat futures surged amid weather concerns overnight, with the HRW wheat market leading to the upside with gains of 9 to 14 cents. SRW is up 7 to 10 cents, while HRS wheat is up 6 to 8 cents. Corn futures also rallied on weather concerns overnight, with most contracts up 4 to 5 cents. Soybeans are 5 to 8 cents higher. The U.S. dollar index is marginally higher, while crude oil futures are down slightly.

Freezing temps and flooding bolsters markets... Temperatures dropped below freezing in Kansas, Oklahoma, the Texas Panhandle and Colorado over the weekend. Plus the winter wheat crop is more advanced than normal, with 32% of the crop headed as of last Sunday, leaving it more at risk of damage. But snowfall accompanied the cold blast, which should protect against widespread damage. However, World Weather Inc. notes that ongoing wet weather could lead to disease concerns. Meanwhile, storms over the weekend resulted in major to record flooding from eastern Oklahoma through northern Arkansas, Missouri, southern Illinois and into central Indiana, according to the National Weather Service. Drier weather is expected this week, but it will take time for fields to dry out enough for a resumption of planting.

Congress reaches budget deal without cotton and dairy farm bill language... Lawmakers reached a budget agreement for the remaining months of fiscal year 2017, which ends Sept. 30. Cotton and dairy farm program language did not make it in the final budget package. Instead, included in a list of congressional directives accompanying the spending deal is a request that the USDA secretary within 60 days issue a report on administrative options for providing financial relief to cotton growers, and also offer immediate assistance to dairy producers. The omission of cotton and dairy language was because Sen. Patrick Leahy (D-Vt.) did not agree with the dairy plan worked out by Representative Collin Peterson (D-Minn.) and House Ag Chairman Mike Conaway (R-Texas). Sources say this does not bode well for coming farm bill debate.

Hearing on Branstad, FOMC meeting and jobs report some highlights of the week... This week the Senate will hold the nomination hearing for Iowa Governor Terry Branstad to be the U.S. Ambassador to China, with other sessions on broadband infrastructure, the economy and private-sector growth and flood insurance. The Senate will also consider the nomination of President Donald Trump’s pick for the Securities & Exchange (SEC) chairman. On May 6, the Senate Agriculture Committee heads to Michigan for a farm bill hearing. At the White House, Trump will meet with Palestinian Authority President Mahmoud Abbas on Wednesday and Australian Prime Minister Malcolm Turnbull on Thursday. The Federal Open Market Committee (FOMC) will meet May 2-3. No change in interest rate policy is expected at the meeting. The April jobs report will arrive Friday

Perdue to provide more school meal flexibility... USDA Secretary Sonny Perdue will unveil an interim rule today designed at providing flexibility for school meals. He will make the announcement at Catoctin Elementary School in Leesburg, Virginia. Senator Pat Roberts (R-Kan.) will also be in attendance. The former Obama administration’s rules -- which require strict calorie limits; the near-elimination of salt; multiple servings of raw vegetables, fruits, and whole grains; tight restrictions on meat and fat, and bans on everything from vending-machine sweets to bake sales -- were meant to combat childhood obesity when they were imposed in 2012.

Commitments of Traders data shows record-setting bearish attitudes among funds... When combining corn, winter and spring wheat, soybeans, soyoil and soymeal futures, hedge funds and other money managers held an all-time record net short position of 464,376 futures and options contracts the week ended April 25, according to Commodity Futures Trading Commission data. This also marks the first time ever when money managers were bearish on all seven of these contracts at the same time. The overwhelming bearish sentiment signals a corrective rally is likely ahead.

June futures take over lead-month status at sharp discount to cash... While momentum is clearly to the upside, the live and feeder cattle futures are severely overbought. On the other hand, June live cattle, which are now the new front month, are at least $11 below the low end of last week’s cash action. And with dressed cattle weighs on the decline, marketings are clearly current. Further, wintry weather on the Plains this weekend stressed livestock.

Watching the cash hog market after last week’s strong technical performance... Last week’s V-bottom favors followthrough buying in the lean hog market. But unless cash prices strengthen, momentum could soon fade, leaving the market as risk of profit-taking. While there were some firmer cash hog bids at times last week, the cash hog index remains in a pronounced downtrend.

Weekend demand news... There is no business to report.

Today’s reports:

8:00 a.m., Commodity Costs and Returns -- ERS
10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Cotton System -- NASS
2:00 p.m., Fats & Oils -- NASS
2:00 p.m., Flour Milling -- NASS
2:00 p.m., Flour Milling - Ann. -- NASS
2:00 p.m., Grain Crushings -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Farmers Take Advantage of Planting Window

Sun, 15 Nov 2020 19:35:22 GMT

Dollar drop spurs short-covering to start the week... Corn futures are up 1 to 2 cents amid some corrective buying to start the week. Soybeans also enjoyed short-covering overnight and most contracts are currently up 6 to 7 cents. Winter wheat futures are 2 to 3 cents higher, while spring wheat is up fractionally to a penny. The U.S. dollar index is sharply lower today, while crude oil futures are firmer.

Lawmakers to vote on Perdue, Trump to meet with ag stakeholders... Lawmakers return to Washington after their two-week spring break -- the Senate today and the House on Tuesday. First up for the Senate will be a vote on the nomination of Sonny Perdue to be USDA secretary. The chamber is expected to easily approve Perdue. Lawmakers must also come to terms on how to keep the government funded beyond Friday when the current funding mechanism expires. President Donald Trump will host a roundtable discussion with farmers and will sign an executive order to protect and provide relief for rural America on Tuesday. He will also release his own tax plan as early as Wednesday. Get more details about what’s ahead .

Farmers take advantage of planting window... Drier weather over the weekend allowed many farmers across the Corn Belt to get into the field, with more planting efforts likely today before rains move into the lower and eastern Corn Belt on Tuesday and Wednesday. The National Weather Service forecast for April 29 to May 3 calls for cool, wet conditions across the Midwest, which would also slow planting efforts. Meanwhile, World Weather Inc. reports some hard freezes occurred in Colorado and Nebraska over the weekend, with light freezes reported in Kansas and the western Texas Panhandle. It details that this likely burned back the vegetative development of the crop, but permanent damage was unlikely.

Vomitoxin increasingly a concern... The fungus vomitoxin has increasingly been an issue with the 2016 corn crop in Indiana, Wisconsin, Ohio, and parts of Iowa and Michigan, according to the food testing firm Neogen Corp. Neogen reports a 29% jump in global sales for toxin tests, including strong demand for vomitoxin tests, in the third fiscal year quarter. Heavy rain before and during harvest led to the storage of some wet grain last fall, plus the record size of the crop meant some of it was stored on the ground or in other makeshift ways. Poultry and pork farmers are having to test their grain to ensure the toxin will not sicken animals and it has some grain processors searching for alternative sources of feed supplies. Indeed, vomitoxin is reportedly the reason a shipment of corn from Paraguay is headed for the U.S. next month.

Attaché expects soybean production in Paraguay to decline from this year’s record... Paraguay’s 2016-17 soybean crop will likely hit a record 10.2 MMT due to “elevated crop area and record yields -- supported by good weather throughout the season,” says a USDA ag attaché in the country. The post expects the country to export 6.250 MMT of that tally. Looking ahead to 2017-18, the attaché expects the crop to fall to 9.40 MMT with exports projected at 5.55 MMT.

Ukraine’s wheat crop off to a strong start... Ukraine’s agriculture minister estimates that around 6.2 million hectares have been planted to wheat this year and most of the crop is in good condition. Therefore, the official says that the 2017 wheat crop should top 24 MMT.

Trade could book some profits in cattle... Live cattle futures could see some profit-taking to start the week after the cattle complex posted sharp gains last week in response to higher cash action, plus placements were well above expectations in Friday’s Cattle on Feed Report. The number of cattle on feed and marketings did come in basically in line with expectations, however.

Bearish attitudes show little sign of waning in lean hogs... While lean hog futures are oversold, that does not guarantee much (if any) of a rebound over the near-term, as the cash hog market remains under pressure. The product market has also done little to enthuse traders about spring grilling demand. Summer futures contracts are signaling expectations for a more subdued seasonal rally from late spring to early summer. USDA’s Cold Storage Report will provide some insight as to demand strength this afternoon.

Weekend demand news... A group of private Israeli buyers issued international tender to buy up to 100,000 MT of corn, 45,000 MT of feed what and 30,000 MT of feed barley to be sourced from optional origins, according to European traders. Algeria bought a nominal 50,000 MT of durum wheat.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
23:00 p.m., Cold Storage -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Trump to Unveil Tax Cut Proposals Today

Sun, 15 Nov 2020 19:35:22 GMT

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

First Thing Today: Profit-taking Sets In

Fri, 13 Nov 2020 01:20:59 GMT

Good morning!

Profit-taking sets in... Corn futures enjoyed followthrough buying to kick off the overnight session, but that has since given way to profit-taking, with most contracts now trading around a 7 cents lower. Soybean futures are down 7 to mostly 16 cents after similar price action. Spring wheat futures are mixed as of 6:30 a.m. CT, but most winter wheat contracts are 8 to 10 cents lower.

PF CCI for spring wheat drops below 300 points... When USDA’s weekly crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 being perfect), the spring wheat crop plunged another 14.68 points to 291.31 points, which is nearly 80 points under year-ago levels. Ratings fell in all major producing states, with North Dakota and Montana leading the decline. See the state-by-state breakdown .

CCI for corn and soybeans also declines... Our weighted CCI for corn fell 4.15 points over the past week to 367.27 points, which is nearly 20 points under year-ago levels. Our weighted CCI for soybeans declined by 5.09 points to 352.58 points. The bean crop is rated roughly 18 points under year-ago levels. Generally speaking, western Corn Belt states led the declines with ratings in most other areas holding near steady. Get more details .

Cordonnier trims corn, soybean yield estimates... Crop Consultant Dr. Michael Cordonnier lowered his average U.S. corn yield estimate by 2 bu. to 165 bu. per acre this week, and he has a neutral to lower bias going forward. He explained that the weather was “OK in the far eastern Belt,” but “less than ideal” in the western Belt over the past week and that more of the same is expected this week and the next. Cordonnier also cut his minimum corn yield estimate by 2 bu. to 158 bu. per acre, while leaving his maximum at 170 bu. per acre. He also trimmed his soybean yield estimate by 0.5 bu. to 47.5 bu. per acre and has a neutral to lower bias going forward. He says that if the forecast verifies more condition rating declines are likely. “Soybeans always have the capability of recuperating if the weather turns more favorable later in the growing season, but I think it is time to take a more conservative approach,” he explains, adding that the weather needs to improve “very soon” for the crop to maintain its yield potential.

Return to trendline yields to dramatically curb Brazil’s bean crop in 2017-18... A USDA ag attache in Brazil projects the country will produce a 105 MMT soybean crop in 2017-18, down notably from this season’s 114 MMT due to a return to trend yields. The post expects Brazil export a record 64 MMT soybeans this marketing year. Meanwhile, farmers in Brazil’s top producing state of Mato Grosso have now sold 83.61% of their 2016-17 soybean crop, a gain of 5.45 percentage points from the month prior, according to the state’s ag research agency IMEA. Producers in the state have also forward-sold sold 9.36% of their 2017-18 soybean crop, up from 4.2% last month.

House Budget markup again delayed as no consensus on mandatory spending cuts... The House Budget Committee has put off a markup of a fiscal 2018 budget resolution until at least next week, the third delay over the past three weeks. The panel is tentatively looking at July 19 for the markup. If the budget is marked up next week, the House could take it up the following week during its last week in session before the August recess. If not, plans to introduce a budget resolution will likely be shelved until September. Disagreement over the minimum amount of spending that would be cut through budget reconciliation is the main hurdle.

House tries to speed up WOTUS rule rollback but Senate hurdles likely... Speeding up the rollback of the Obama-era waters of the U.S. (WOTUS) rule by circumventing the normal rulemaking process is the goal of a provision in the energy and water spending bill the House Appropriations Committee will consider Wednesday. The provision would allow the Environmental Protection Agency and the U.S. Army Corps of Engineers to withdraw the 2015 stayed WOTUS rule “without regard to any provision of statute or regulation that establishes a requirement for such withdrawal.” The rule is facing dozens of lawsuits. In essence, this would shorten the rulemaking process by getting rid of the public comment process. But Senate Democrats are expected to oppose the measure. Plus, any such change would likely be challenged in court.

Wall Street Journal: Wheat crop and market volatility could undermine a strong performer for rail networks... The newspaper says spring wheat futures “have leapt 40% in a little over a month, far outpacing more widely traded corn and soybean contracts.” Despite the potential impact of lower wheat supplies on the rail network, grain shipments on U.S. railroads were up 12.2% in the first five months of 2017, including a 24.5% year-over-year increase in May, according to the Association of American Railroads.

U.S. biodiesel fair trade coalition files new claim in imports case... The National Biodiesel Board Fair Trade Coalition has filed a new allegation with the U.S. Department of Commerce claiming that critical circumstances exist with respect to imports of biodiesel from Argentina. The “critical circumstances” provision allows for the imposition of duties on imports that enter the U.S. prior to preliminary determinations of subsidization and dumping. The coalition found that imports of biodiesel from Argentina jumped 144.5% since the filing of the anti-dumping and countervailing duty petitions, as compared to the period prior to the filings. To determine critical circumstances, the Commerce Department must find that there are “massive” imports over a relatively short period of time, and that other statutory criteria are met, including whether the imports benefit from illegal subsidies.

USDA expands emergency drought help by allowing haying on CRP land... USDA announced it will further aid drought-impacted ranchers by letting them hay land normally protected under the Conservation Reserve Program (CRP). In June, USDA opened up CRP land in much of Montana, North Dakota and South Dakota to grazing for ranchers suffering severe, extreme or exceptional drought conditions. The new announcement will allow ranchers on July 16 to begin haying the land. CRP land owners can hay the land themselves or allow livestock owners to do it. The landowners will not be penalized with lower CRP payments because of the emergency.

Cash cattle market may be stabilizing... Choice boxed beef values slid again on Monday, signaling ongoing resistance to prices that are still well above year-ago levels. But Select values did firm 16 cents yesterday. Movement was again decent at 134 loads. Meanwhile, showlist estimates are a bit tighter this week (around 5,000 head), which could lead to more steady cash action this week. Last week, sales took place at an average price of $118.67, according to USDA, up 3 cents from the average the week prior.

Pork prices slip as cash prices rise... The pork cutout value dipped 11 cents and movement was quite light at 197.38 loads to kick off the week, raising some concern about demand for BLT season. But on a more positive note, cash hog prices strengthened notably in both the western and eastern Corn Belt on Monday, which could signal packers kicked off the week short on supplies.

Overnight demand news... Taiwan bought 65,000 MT of corn, likely from Brazil. Pakistani importers have purchased around 122,000 MT of canola from Canada in recent deals. The country also recently bought around 180,000 MT of soybeans that are likely to be sourced from the U.S. or Brazil.

Today’s reports:

8:00 a.m., U.S. Bioenergy -- ERS

First Thing Today: Weather Concerns Remain Front and Center

Fri, 13 Nov 2020 01:20:59 GMT

Good morning!

Weather concerns remain front-and-center, lifting markets... Corn futures saw two-sided trade overnight, but the market is currently trading around 4 cents higher thanks to ongoing heat across the Midwest and weather models that continue to vary in terms of how soon rains will arrive in the Corn Belt and how far south they will travel. Soybeans are also being lifted by weather concerns, with most contracts currently up 2 cents. Winter wheat is mostly up a penny or two, while spring wheat is 1 to 6 cents higher. Spotty rains fell over the eastern areas of the Northern Plains yesterday, but accumulation was light and much of the region missed out on rain.

Dry weather taking a toll on three major producers of high-protein wheat... All three of the world’s top suppliers of high-protein wheat -- the U.S., Canada and Australia -- are dealing with drought. In Saskatchewan and Alberta, Canada’s top producing provinces, crop development is behind last year’s pace and much of Saskatchewan has received less than 40% of normal precip over the past 30 days. Heat and dryness are also taking a toll on U.S. and Australian crops. This has shot up prices for high-quality wheat, cutting into profit margins for food companies and causing millers and bakers to reevaluate their protein needs. But to some extent, demand for high-protein wheat is inelastic.

House budget resolution vote... The long-awaited House budget proposal gets a markup in committee today, despite concerns from some Republicans and opposition from Democrats. Tax reform and budget cuts were included in the resolution package. The planned Republican tax system overhaul would be part of a legislative package that would also include more than $200 billion in spending cuts under the House GOP budget resolution. The Ways and Means Committee is one of 11 committees tasked with reducing the budget deficit by making changes in programs under their jurisdiction. Ways and Means’ deficit reduction directive calls for at least $52 billion in cuts over 10 years; the total cuts by all 11 committees would be a minimum of $203 billion over those years. The committees’ proposals would be compiled into a single reconciliation bill for floor consideration. They would have until Oct. 6 to send legislative text on its spending cuts to the Budget Committee.

Immigration enforcement, H-2A ag guest worker program part of panel-cleared House spending measure... The House Appropriations Committee on Tuesday approved a $44.3 billion fiscal 2018 spending bill for the Department of Homeland Security that includes funding for some of Trump’s key immigration enforcement policies. One approved amendment makes a major change in the H-2A agricultural guest worker program. The provision would allow H-2A visas to be used for year-around farmworkers. The program is now limited to seasonal employees, which is a major problem for dairy producers.

House and Senate leaders announce major action ahead... The House will take up a four-bill fiscal 2018 appropriations package focused on security before leaving for the August recess. At the urging of President Donald Trump, the Senate will take a test vote on health care “early next week.”

Bill introduced to extend, phase out biodiesel blenders tax credit… Reps. Diane Black (R-Tenn.) and Ron Kind (D-Wis.) introduced legislation to extend the biodiesel blenders tax credit and phase the incentive out by 2022. Under the proposed phase-out, the value for the blenders tax credit would be $1 per gallon in 2017 to 2018, 75 cents in 2019, and 50 cents in 2020 through 2021. The tax credit would sunset Dec. 31, 2021. The National Biodiesel Board does not support phasing out the biodiesel tax incentive.

Dow pressing for answers... Dow AgriScience is pressing China to clarify its position on its Enlist soybeans, the company told Reuters yesterday. As part of its 100-day trade talks with the U.S., China pledged to review eight biotech crops awaiting approval. Earlier this week, China approved two new biotech crops for import, after giving two other products the green light earlier. Four other biotech crops, including Dow’s Enlist beans, an insect-resistant corn from DuPont or two alfalfa products from Monsanto, are still in limbo.

Atypical BSE case in Alabama, but no trade threat anticipated... An 11-year-old cow in Alabama has tested positive for bovine spongiform encephalopathy (BSE, also known as mad cow disease). The cow tested positive for the atypical L-type of BSE after showing clinical signs at an Alabama livestock market, according to USDA. It emphasized that “This animal never entered slaughter channels and at no time presented a risk to the food supply, or to human health in the United States.” It added that the atypical case won’t change the negligible risk status of the U.S., nor should it lead to any trade issues. However, South Korea’s agriculture ministry said it will strengthen quarantine measures on U.S. beef starting today.

Light cash market test points to lower trade... A modest rise in showlist numbers (up 9,000 head, largely in Nebraska) from week-ago has traders expecting cash cattle prices to drop this week after stabilizing the past two weeks. August futures ended yesterday’s session roughly $5 below last week’s average cash price. But choppy boxed beef prices and solid movement could limit any slide in cash prices. So far, just a few hundred head have changed hands in the Iowa/Minnesota and Kansas markets around $117. Today’s online Fed Cattle Exchange auction should provide more cash market guidance.

Mixed cash hog bids Tuesday... Cash hog prices strengthened in the eastern Corn Belt but softened elsewhere yesterday, signaling varied packer demand. They are still enjoying strong cutting margins, but this week’s kill is running under week-ago levels. Meanwhile, the pork market showed signs of life yesterday, with the cutout value gaining 43 cents and movement picking up to 321.13 loads.

Overnight demand news... Egypt bought 120,000 MT of wheat from Russia, 120,000 MT of wheat from Romania and 60,000 MT of wheat from France. Taiwan purchased 105,150 MT of milling wheat from the United States.

Today’s reports:

9:30 a.m., Weekly Ethanol Production -- EIA
2:00 p.m., Broiler Hatchery -- NASS

First Thing Today: Heat Advisories for the Heart of the Corn Belt

Fri, 13 Nov 2020 01:20:59 GMT

Good morning!

Weather concerns again lifting corn and soybeans... Corn futures are around 2 to 4 cents higher and soybeans are up 8 cents as the forecast remains hot and dry across the Midwest. In contrast, wheat futures are fractionally to 3 cents lower as traders shift their focus to ample global supplies of wheat and some profit-taking. The U.S. dollar index is a bit firmer today, while crude oil futures are marginally higher.

Heat advisories for the heart of the Corn Belt... The National Weather Service has issued a heat advisory or excessive heat watch for much of the nation’s midsection, stretching from the southwest half of Nebraska through Illinois and southward through Texas. This paired with just limited precip in the forecast for these areas through week’s end keeps crop concerns high. Some rains are possible for the western and central Corn Belt late next week, but a high pressure ridge could expand into the southwest Corn Belt from July 28 to Aug. 3, notes World Weather Inc. The National Weather Service outlook for July 25-29 calls for heat across most of the Corn Belt and the Plains and normal to below-normal precip.

Export sales out today... USDA will release its weekly export sales activity update at 7:30 a.m. CT. Traders expect the report to show corn sales ranging from 350,000 MT to 750,000 MT, soybean sales between 1.4 MMT and 2.1 MMT (includes recent large Chinese buys), wheat sales of 250,000 MT to 450,000 MT, soymeal sales ranging from 50,000 MT to 300,000 MT and soyoil sales between 5,000 MT and 30,000 MT. These expectation ranges include old- and new-crop sales combined.

White House announces more top USDA position nominees... Last night, the White House announced the nominations of Indiana Agriculture Director Ted McKinney to become undersecretary for trade and foreign agricultural affairs and Sam Clovis to be undersecretary for research, education and economics, both names previously mentioned as likely for the positions. McKinney spent most of his career working with Dow AgroSciences and Elanco, a subsidiary of Eli Lilly. Clovis served as chief policy adviser on the Trump campaign and has been working as a senior White House adviser at USDA since President Donald Trump took office. Iowa Agriculture Secretary Bill Northey is the likely pick as undersecretary for farm and conservation programs. Meanwhile, the Senate Ag Committee plans to schedule a confirmation hearing on deputy secretary-nominee Stephen Censky once it goes through “all the proper protocols,” said Press Secretary Meghan Cline.

White House unveils infrastructure council... Trump is forming a council to advise his administration on the best ways to improve the nation’s infrastructure. The council will be run out of the Commerce Department and will include 15 members from various segments of the economy. While agriculture is not yet represented, the executive order says more sectors could be added.

OMB to unveil regulatory and deregulatory actions... The White House Office of Management and Budget this morning will release a compendium showing it has withdrawn or postponed many Obama-era regulations. “Government is using muscles it hasn’t used in a really long time, exposing and removing redundant and unnecessary regulation,” OMB Director Mick Mulvaney said in a statement. The “Unified Agenda” adds “deregulatory actions” to its name and details the Trump administration has shelved about 860 regulatory actions, either withdrawing them or moving them from “active status.”

Steel issues forge limited U.S./China meeting results... A spirited discord over how much China should reduce its excess steel production capacity dominated the first meeting of the U.S./China Comprehensive Economic Dialogue on Wednesday, apparently blocking progress on other issues. China nixed U.S. pressure to agree to specific cuts in production capacity and U.S. officials did not move to other issues. Both countries canceled press conferences planned for the afternoon. The confab produced just one result: China’s acknowledgment “of our shared objective to reduce the trade deficit, which both sides will work cooperatively to achieve,” according to Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross’ joint statement.

HFCS production on the rise in China... China’s output of high fructose corn syrup (HFCS) is set to climb 7% this year as China’s efforts to pare its massive corn stockpiles have encouraged producers to increase output or restart idled capacity, according to the commodities information service Zhuochuang. At 4.15 MMT, China’s expected HFCS production will equate to around half of U.S. supplies. The inexpensive sweetener is becoming more popular in China, and it expects to export more of it going forward. In 2016, China’s HFCS shipments jumped as much as a 70% to 454,843 MT, with around half of that total going to the Philippines.

China gives Syngenta’s Agrisure Duracade line the green light... China approved Syngenta’s Agrisure Duracade trait in both corn and co-products (including distillers dried grains) for import. Over the past month, China has approved four other biotech products for import as part of its 100-day talks with the U.S. Four other biotech crops are still awaiting a decision.

Japan’s corn usage in feed climbs in May... Japan increased the amount of corn it used in animal feed rations by 0.5 percentage points from April to 46.9% in May, according to preliminary data from its farm ministry. Its use of sorghum, wheat and barley were unchanged from the month prior in May at 2.2%, 1.9% and 3.5%, respectively.

Bullish reversals for cattle on better-than-expected cash prices... Cattle futures posted a bullish reversal on Wednesday, which bodes well for followthrough buying today. Cash cattle traded at prices steady to up slightly from week-ago levels at the online Fed Cattle Exchange auction, which lifted futures. This led to some fairly active trade in Nebraska at $118 with a very light test around that level for several other locations. This is down slightly from last week but above where August futures have been trading.

Positive signals from the product and cash markets... The pork cutout value slipped on Wednesday, but the value is still up slightly for the week. And movement was again solid at 385.85 loads. This eased concerns that the product market may be working on a top. Also encouraging, cash hog prices strengthened in the western Corn Belt and the Iowa/Minnesota market yesterday, though prices slipped in the eastern Belt.

Overnight demand news... Jordan made no purchase in its tender to buy 100,000 MT of milling wheat; it later launched an international tender to buy the same amount of milling wheat from optional origins. Saudi Arabia issued an international tender to buy 1.5 MMT of animal feed barley.

Today’s reports:

7:30 a.m., Drought Monitor -- USDA/NWS
7:30 a.m., Extended Weather Outlook -- NWS
7:30 a.m., Weekly Export Sales -- FAS
2:00 p.m., Livestock Slaughter -- NASS
2:00 p.m., Milk Production -- NASS

First Thing Today: Spring Wheat CCI Erodes, Just Minor Shifts for Corn and Beans

Fri, 13 Nov 2020 01:20:56 GMT

Good morning!

Profit-taking across the board overnight... Corn futures faced profit-taking overnight and are down 6 cents as of 6:35 a.m. CT. Soybeans also dipped overnight and are currently down 4 to 5 cents. Winter wheat futures are posting losses mostly in the 17 to 19-cent range, while spring wheat is down 9 to 17 cents. The U.S. dollar index is slightly lower today, while crude oil futures are posting solid gains.

CCI for spring wheat continues to erode... When USDA’s weekly crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the spring wheat crop fell another 5.36 points to 305.99 points. The No. 2 producing state of Montana led the decline, with ratings dropping 7.03 points. More declines may very well be ahead, with Don Keeney, senior agricultural meteorologist for MDA Weather Services, pointing out that “Spring wheat is pushing through the moisture-sensitive heading stage, and additional significant reductions in yield potential are likely as the hot and dry pattern remains in place.” See the state-by-state breakdown .

Minor shifts in corn and soybean CCI ratings this week... Our weighted CCI for corn climbed nearly a point to 371.42 points last week. The soybean CCI now stands at 357.67 points, down 2.04 points from the week prior. Both crops are rated below year-ago levels; for corn, ratings are down roughly 13 points while soybean ratings are around 11 points under year-ago. Get more details .

North Korea a major world focus... North Korea’s successful test launch of an intercontinental ballistic missile is the major focus of world leaders.“Self-restraint” is the only thing stopping the U.S. and South Korea from going to war with the North, according to the highest-ranking American general on the peninsula. An emergency United Nations Security Council meeting was held, with U.S. Ambassador Nikki Haley saying America would go its “own path” if needed to counter this aggression, while France’s U.N. ambassador pushed for fresh sanctions against the isolated state. President Trump said he’s considering “some pretty severe things” in response to North Korea’s test-firing. Read more here .

Cut in advanced biofuels a big item in EPA’s proposed RFS volume requirements... Instead of increasing the required volume of advanced biofuels, the Environmental Protection Agency (EPA) decided to cut them by 40 million gallons, reducing the overall amount of biofuel required under the program. The biomass-based diesel (BBD) volume was kept unchanged for 2019, at 2.1 billion gallons, the same level in place for 2018. Also of note, EPA said it was launching an analysis for a “reset” of the volumes allowed under the law, asking for comment on imported ethanol and biodiesel, and opening the door to an examination of the market for 0% ethanol. EPA has until Nov. 30 to accept comments, analyze them and produce a final rule. Get more details on and reactions to the RFS proposals here .

Brazil to fast-track program to boost biofuel use... Brazil’s government plans to employ a fast-track legislative tool to speed up implementation of a program meant to boost biofuel use via the use of mandates for fuel distributors, Andre Rocha, head of the National Sugar and Ethanol Council told Reuters. Whereas a normal draft bill could take months to get through Congress, a presidential decree takes effect immediately and then Congress must approve it within four months.

Egypt rejects corn shipment due to ergot... Egypt has rejected a 60,000 MT shipment of corn from Ukraine due to high levels of the fungus ergot, according to Hamid Abdel Dayim, an ag ministry spokesman. He detailed that the shipment contained more than 0.05% of the fungus ergot, a common international maximum limit. A recent court ruling that shifted the responsibility for inspections back to the ag ministry has raised fears about a return to a zero-tolerance stance on the fungus for wheat shipments.

FAO: Global food prices continue to climb in June... The Food and Ag Organization of the U.N. (FAO) reports its Food Price Index averaged 175.2 points in June, a gain of 2.5 points from May and 11 points from year-ago. This is the second month in a row where the index has climbed, with this month’s gains driven by “relatively large increases in dairy and cereal prices,” according to FAO, which also noted a gain in meat prices. FAO trimmed its global wheat crop estimate by 3.3 MMT to 739.9 MMT, due “almost entirely” to smaller crops in the EU and Ukraine. But global wheat stocks are still expected to hit an all-time high of 255.8 MMT.

Court won’t reconsider large livestock facilities emissions reporting ruling... A federal court said it would not reconsider a prior ruling that vacated a Bush-era EPA rule exempting large livestock facilities from reporting emissions from animal waste. Large livestock farms — known as concentrated animal feeding operations — will now be subject to waste emissions reporting requirements under the Comprehensive Environmental Response, Compensation and Liability Act and the Emergency Planning and Community Right-to-Know Act. The agency estimated in 2008 that would cost farmers more than a million hours for record-keeping and $60 million for compliance. This will not likely be the last word on the matter. EPA is expected to ask the court to stay its decision so it can figure out what it will do.

Beef movement solid on price drop... Boxed beef prices softened 31 cents for Choice and $2.13 for Select on Wednesday, but movement was again strong at 147 loads. This signals prices are nearing value levels and/or that retailers are preparing for some post-holiday grilling features. Meanwhile, a few thousand head of cattle traded from $116 to $117 in Iowa yesterday, and in Nebraska at $117, down from last week’s action that mostly ranged from $118 to $120 in these states.

Keeping a close eye on the cash market... Traders continue to monitor the cash hog market for signs of a top, but cash prices strengthened across the country yesterday, according to USDA. This helped futures to strengthen on Wednesday, pushing July lean hog futures to a premium to the cash hog index. But deferred contracts have a healthy discount to the cash index in place, which should limit pressure once cash prices falter.

Overnight demand news... Egypt bought 350,000 MT of wheat from Russia as well as 60,000 MT from Romania. Japan said it would import 15,750 MT of feed wheat via a simultaneous buy and sell auction. It also purchased a total of 91,660 MT of food-quality wheat from the U.S. via its regular tender.

Today’s reports:

7:30 a.m., Drought Monitor -- USDA/NWS
8:00 a.m., Milk Cost of Production -- ERS
9:30 a.m., Weekly Ethanol Production -- EIA
2:00 p.m., Broiler Hatchery -- NASS
2:00 p.m., Dairy Products -- NASS

First Thing Today: Spring Wheat Surge Lifts Other Markets, Too

Fri, 13 Nov 2020 01:20:56 GMT

Weather-inspired spring wheat surge lifts other markets, too... Spring wheat is again leading the charge higher today, with most contracts posting gains in the low 20s. This has pulled winter wheat futures 7 to 8 cents higher. Soybeans are up a nickel and corn futures are around a penny higher as of 6:30 a.m. CT. The U.S. dollar index is again under pressure.

Export Sales Report out today... Traders expect USDA to report corn sales ranging from 450,000 MT to 850,000 MT, soybean sales between 300,000 MT and 700,000 MT, wheat sales of 350,000 MT to 550,000 MT, soymeal sales ranging from 50,000 MT to 200,000 MT and soyoil sales between 5,000 MT and 29,000 MT.

Wet spring likely stopped Canadian growers from planting intended wheat, canola acres... Soggy conditions this spring likely prevented farmers in Canada from seeding all their intended wheat acres, according to analysts surveyed by Reuters. Today they expect Statistics Canada to report around 22.7 million acres were seeded to wheat this year, down 481,700 acres from April intentions and below last year’s 23.212 million acres. Canola planting intentions are likely to come in around 22.2 million acres, according to the survey, down slightly from April but still record-high.

Trump to meet with South Korea president... President Donald Trump will host South Korean President Moon Jae-In this morning. Their discussion is expected to center around trade issues (autos and steel) and North Korea. On trade, the key issues are the bilateral trade imbalance and market access barriers. On North Korea: The leaders will “coordinate on North Korea-related issues, including countering the growing North Korean nuclear and missile threats,” according to a statement.

Senate Ag Committee to vote on Giancarlo nomination to head CFTC… Senate Agriculture Committee today will vote on the nomination of Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission (CFTC). He is expected to easily clear the panel, setting the stage for full Senate confirmation.

Farm bill battle begins as conservative group takes aim at House ag panel leader... On Wednesday, Heritage Action publicly blamed House Agriculture Committee Chairman Mike Conaway (R-Texas) for holding up the budget resolution process — and by extension, tax reform — over his refusal to accept significant mandatory cuts to agriculture and nutrition programs. Conaway responded by labeling the accusation absurd. “With the farm economy in one of the biggest slides since the Great Depression, the chairman has been advocating for a budget that won’t exacerbate the conditions of our farmers and ranchers in rural America and that won’t impede development of the next farm bill,” said Rachel Millard, a spokeswoman for the committee. “That may not fit with Heritage Action’s long-running campaign against America’s farmers and ranchers, but it certainly isn’t the reason we still don’t have a budget.

Labor union leaders weigh in on NAFTA renegotiation... Labor union advocates on Wednesday urged U.S. trade officials to consider a series of measures aimed at promoting growth of U.S. jobs and wages. The Trump administration is fielding comments during 90-day period prior to renegotiation of the North American Free Trade Agreement. Union lobbyists demanded elimination of a NAFTA provision allowing long-haul Mexican trucks to operate in the U.S. The Teamsters are also contesting the provision in the courts, arguing that the trucks are a risk in the U.S. due to failure to meet safety and emission standards, among other issues.

Ongoing bribery scandal in Brazil impacting its economy... Brazil’s attorney general has charged President Michel Temer with accepting around $150,000 in bribes from Joesley Batista, the former chairman of the Brazilian meatpacking company JBS. The Supreme Court has decided to send charges against Temer to Congress, where a two-thirds majority vote is needed to proceed to a trial in front of the Supreme Court. The fiasco along with other food safety scandals has slowed forward progress on legislation and is expected to limit Brazil’s recovery from a historic recession. Today, Brazil’s government lowered its growth forecast for 2017 to less than 0.5%.

Light buys at latest Chinese corn auction... China sold 149,129 MT of 2014 crop corn at its latest auction of state reserves for an average price of 1,335 yuan ($196.88) per metric ton. This represents just 12.7% of the more than 1.177 MMT of corn available at the auction.

India’s cotton exports to fall notably from year-ago on appreciating rupee... India will likely export just 6 million bales of cotton for 2016-17, down 17% from the year prior, forecasts the Cotton Association of India. It pegs production at 33.63 million bales, down just 150,000 bales from last year. The big drop in exports can be attributed to a rising currency, which hurt the competitiveness of Indian cotton on the global market.

H&P report expected to confirm major industry expansion... USDA will likely report the U.S. hog herd stood at roughly 71.597 million head as of June 1, up 3.3% from year-ago levels, according to analysts surveyed by Reuters. They expect the Quarterly Hogs & Pigs Report to show hogs kept for breeding up 1.5% from year-ago and kept for marketing rising 3.5% from last year’s level. We will have full details in “Evening Report” and online.

Beef movement picks up on price plunge... While boxed beef prices have dropped sharply this week, movement has picked up. Yesterday, 165 loads changed hands on the $4.48 (Choice) to $2.59 (Select) price decline. This along with still-high packer profit margins should protect against a major drop for the cash market. So far, there has been some light to moderate trade in Nebraska at $118, down $1 to $5 from week-ago, and in the western Corn Belt at $118 to $119.50, versus trade ranging from $119 to $124 the week prior. So far, just a few hundred head have changed hands in Texas and Kansas at similar price levels.

Gearing up for H&P Report... Traders will be focused on readying for today’s Quarterly Hogs & Pigs Report, that is expected to show record inventory as of June 1. Meanwhile, the pork cutout value continues to push further above the $100-level, rising 58 cents on Wednesday to $102.48 per hundredweight. Movement was also decent considering elevated prices at 318.94 loads.

Overnight demand news... Japan received no offers in its tender to buy 120,000 MT feed-quality wheat or 200,000 MT of barley in its simultaneous buy and sell auction, so it rescheduled it for July 5.

Today’s reports:

7:30 a.m., Weekly Export Sales -- FAS
7:30 a.m., Drought Monitor -- USDA/NWS
7:30 a.m., Principal Field Crop Area -- StatsCan
2:00 p.m., Agricultural Prices -- NASS
2:00 p.m., Egg Products -- NASS
2:00 p.m., Hogs and Pigs -- NASS

First Thing Today: Rain Still in the Forecast

Fri, 13 Nov 2020 01:17:41 GMT

Profit-taking overnight... Some profit-taking moved in overnight as traders prepared for today’s USDA reports and the weekend. Corn futures are mostly 2 cents lower as of 6:35 a.m. CT, while soybeans are steady to a penny lower. Winter wheat futures are down 3 to 5 cents, while spring wheat is narrowly mixed. The U.S. dollar index is posting strong gains, while crude oil futures are marginally higher.

Minor changes expected in USDA’s reports... No major changes are expected in USDA’s Supply & Demand or Crop Production Reports that will be released at 11:00 a.m. CT today. Traders expect USDA to peg old-crop corn carryover at 2.287 billion bu. and new-crop at 2.085 billion bu., both down slightly from May. Soybean carryover for 2016-17 is expected to fall 2 million bu. to 433 million, while 2017-18 carry is expected to climb 5 million bu. to 485 million bushels. Wheat carryover is expected to rise 2 million bu. for 2016-17 to 1.161 billion bu. and fall 3 million bu. for 2017-18 to 911 million bushels. Traders also expect a 7-million-bu. cut to USDA’s all winter wheat crop from last month, bringing it to 1.239 billion bushels.

Wet weather remains in the forecast... Traders continue to monitor rain chances next week, as precip will be badly needed after extreme temperatures this weekend and recent dry weather. The evening GFS weather model run in the U.S. decreased rainfall amounts expected for the western Corn Belt for Wednesday, but the model continues to show a low pressure system should bring rain to the Midwest midway through next week. Looking ahead, the National Weather Service forecast for June 14-18 calls for warm, wet conditions across much of the Corn Belt, with the exception of the Dakotas and Nebraska. These states will trend dry and cool. Wet conditions are also expected for eastern areas of the Plains over this timeframe.

Some areas of Brazil may see a light freeze over the weekend... Temps are expected to drop to the low- to mid 30s over the weekend in Parana, Santa Catarina, and northeastern Rio Grande do Sul, Brazil, bringing the possibility of a light freeze, reports World Weather Inc. But it adds that serious crop damage is unlikely.

U.S., global markets digest Thursday events with relative calm... Global equity markets have not reacted with shock to any of the big items on Thursday’s schedule. The European Central Bank (ECB) did not shift its stance on monetary policy except to no talk about the prospect for an interest rate reduction. The testimony by former FBI Director James Comey didn’t provide any new revelations that raised further questions on the Russia election situation. And, global market are reacting mostly with calm to the UK elections where the ruling Conservative party was dealt a sharp rebuke and no longer outright controls parliament. The prospect of a hung parliament hasn’t spooked markets, though the British pound is weaker, boosting the U.S. dollar. However, the Brexit prospects are now less clear.

USDA Secretary Sonny Perdue is in Mississippi... Perdue travels to Cleveland, Mississippi, today to address the annual conference of the Delta Council, an economic development organization serving a host of counties in northwest Mississippi. “Secretary Perdue has an impressive background as an agribusiness man and two-term successful Governor of Georgia, and we look forward to the opportunity to meet with him and hear his thoughts on the future of America’s agricultural industry,” Delta Council President Harry Simmons.

Huge Brazilian crop forecasts from Agroconsult... Crop estimates just keeping getting bigger in Brazil. Agroconsult now estimates the 2016-17 soybean crop at 115 MMT, with exports expected to total 61 MMT. The firm is at the high end of soybean crop estimates for the country. Agroconsult upped its safrinha corn crop estimate by 1.8 MMT to 88.8 MMT, noting rains should help Mato Grosso to produce a record crop. The consultancy also said that cotton plantings will likely surge 18% in 2017-18 to 1.1 million hectares.

Wet weather in Argentina could leave some wheat acres unplanted... Argentine farmers may not be able to replant 100,000 hectares (247,105 acres) of wheat due to flooding and excessive humidity in southern production areas, the Buenos Aires grains exchange warned in a report yesterday. However, the exchange made no change to its forecast for 5.5 million hectares to be planted to wheat in 2017-18. It details that growers have thus far planted 21.4% of their intended wheat area.

Adverse weather curbs Chinese corn crop... Drought and hail have have hit China’s top-producing region in the northeast, prompting its ag ministry to slash its 2017-18 corn crop peg by 700,000 MT to 211.65 MMT. This production estimate is down 3.6% from year-ago and would be China’s smallest crop in four years. Besides weather concerns, acreage is also down as China is working to curb its corn production.

China’s consumer inflation as expected... China’s consumer inflation in May was up 1.5% from year-ago levels, as expected, according to data from the National Bureau of Statistics. This is also up 0.3 points from April. Food prices were down 1.6% from year-ago levels in May, driven by a 12.8% drop in pork prices versus year-go. The producer price index was up 5.5% from year-ago levels in May, down 0.9 points from April and marking the third month in a row where that index has cooled. This was 0.2 points below analysts’ expectations.

Demand for corn at Chinese reserve auctions picks back up... China sold nearly 1.016 MMT of the 1.681 MMT of state reserve corn put up for auction today, representing a sales percentage of 60.4%. The vast majority of the business was for 2013 crop corn, which sold at an average price of 1,340 yuan ($197.08) per metric ton.

Cotton AWP falls; upland cotton import quota #7 announced... The Adjusted World Price (AWP) for cotton fell to 68.03 cents per pound, effective June 9, down from 68.43 cents the prior week and the lowest since the week of April 14, 2017, when it was 66.71 cents per pound. Meanwhile, USDA announced special import quota #7 for upland cotton will be established June 15, 2017, allowing importation of 13,890,026 kilograms (63,796 bales) of upland cotton purchased not later than Sept. 12, 2017, and entered into the U.S. not later than Dec. 11, 2017.

So far, just light cash trade... Some light cash cattle trade got started at prices mostly ranging from $134 to $137, which is within last week’s range. But many feedlots held out for higher prices they feel are justified by strength in the boxed beef market, near-steady showlist numbers and strong cutting margins for packers.

Aggressive hog slaughter numbers... This week’s kill is running 81,000 head in advance of year-ago, signaling aggressive packer demand. Considering the amount of pork this is bringing to market, solid pork prices are impressive. The pork cutout value is up 88 cents for the week.

Overnight demand news... There is no business to report.

Today’s reports:

11:00 a.m., WASDE -- ERS
11:00 a.m., Crop Production -- NASS
11:15 a.m., Cotton: World Markets and Trade -- FAS
11:15 a.m., Grains: World Markets and Trade -- FAS
11:15 a.m., Oilseeds: World Markets and Trade -- FAS
11:15 a.m., World Agricultural Production -- FAS

Ahead of the Open: Cool, Wet Conditions Supportive Overnight

Fri, 13 Nov 2020 01:17:41 GMT

Crop calls

Corn: 1 to 3 cents higher
Soybeans: 2 to 3 cents higher
Wheat: 2 to 3 cents higher

Unfavorably cold and wet conditions across the Central Plains and Corn Belt supported grain and soybean futures overnight. Followthrough buying is expected this morning. The cold, wet weather will keep farmers out of fields in the wettest areas and require replanting in flooded or washed out fields. Forecasts signal another active week of weather this week, with rains expected to trend above normal and temps below normal for much of the Corn Belt and Central Plains. While the unfavorable weather gives traders a reason to cover some short positions, funds have shown no willingness to this point to actively reduce their short exposure. The upside is limited to mild corrective buying unless funds actively cover short positions.

A weaker U.S. dollar should also be mildly price-supportive this morning.

Livestock calls

Cattle: Higher
Hogs: Higher

Cattle and hog futures finished last week on a strong note, which is expected to produce followthrough buying this morning. The big discount cattle futures hold to last week’s cash cattle trade is supportive. While summer-month hog futures are trading at a premium to the cash index, there’s upside price potential as the cash hog market is expected to keep strengthening amid seasonally declining market-ready supplies and strong packer margins.

Traders will also be evening positions ahead of this afternoon’s Cold Storage Report.

After the Bell: Weather Concerns Lift Markets to Start the Week

Fri, 13 Nov 2020 01:17:41 GMT

Corn: Corn futures favored the upside throughout the day, but the market did pare gains at the close to settle 2 1/2 to 2 3/4 cents higher in most contracts. Wet, cool weather is expected to continue this week, raising concerns about getting the remainder of the corn crop planted and the likelihood some acres will shift to soybeans. Traders expect USDA to report around 85% of the crop was planted as of Sunday, which based on March intentions would imply that nearly 13.5 million acres have yet to be planted.

Soybeans: Soybean futures settled 3 1/4 to 4 1/2 cents higher through the March contract. That was in the middle to upper end of today’s range. Soybean futures were supported by weather concerns today, as cold, wet conditions were seen across the Corn Belt over the weekend and the active weather pattern is expected to continue into at least early June.

Wheat: SRW wheat futures closed narrowly mixed, HRW contracts finished roughly 1 to 2 cents lower and spring wheat futures ended around 2 to 3 cents higher. Bulls have to be generally disappointed with the close in wheat today after winter wheat futures failed to hold onto earlier gains. Weather concerns amid late-season rains on the winter wheat crop, along with spillover from corn and soybeans, supported the market for much of the day, but buyer interest faded into the close.

Cotton: Cotton futures strengthened in early trade, but that quickly gave way to profit-taking that kept the market under pressure into the close. July and October futures settled 106 points and 116 points lower, respectively, while deferred contracts ended between 23 and 44 points lower. Cotton futures initially bounced on concerns about heavy rains and some flooding in key production regions over the weekend. But that was short-lived. Talk that India and China have canceled some export business gave traders reason to book profits, extending the market’s downtrend.

Cattle: Live cattle futures enjoyed gains to start the week and futures ended 47 1/2 cents higher in the June contract to $1.72 1/2 higher in the October contract. Cattle futures enjoyed strong followthrough buying to start the week, with traders taking note of nearby contract’s wide discount to last week’s cash trade that took place at an average price near $134. Adding to the positive tone, Choice and Select boxed beef prices firmed this morning amid decent movement.

Hogs: June and July lean hog futures closed 15 and 12 1/2 cents lower, respectively. The August through December contracts ended slightly higher. Spillover from the cattle market supported lean hog futures for much of the day. However, weakness in the cash hog market mildly weighed on nearby hog futures into the close. Cash hog bids were around $1 lower across the Midwest this morning on limited packer demand amid plentiful market-ready supplies.

First Thing Today: Favorably Dry Weather Expected Mid-month for Much of the Corn Belt

Fri, 13 Nov 2020 01:17:36 GMT

Softer tone overnight... Corn futures are down 1 to 2 cents to start the week after trading on either side of unchanged overnight. Soybean futures and the wheat complex are posting losses between 2 to 4 cents to start the week, which is near the lower end of their overnight trading range. The U.S. dollar index is slightly higher, while crude oil futures are just above unchanged.

Favorably dry weather expected mid-month for much of the Corn Belt... The National Weather Service forecast for May 13-17 calls for below-normal precip for all but the far western side of the Corn Belt, where above-normal precip is anticipated. Dry weather is also expected for the bulk of the Central and Southern Plains. Cool temps are forecast from Iowa eastward as well as across much of Kansas, Oklahoma and eastern Texas. Also of note, frost and freeze warnings are in effect today for Ohio as well as northern areas of Indiana and Illinois.

Brazilian soybean sales continue to lag... Farmers in Brazil have sold 50% of their soybean crop, which is 17 percentage points behind last year at this point and 15 points behind the five-year average, reports Safras & Mercado, an independent consultancy. Farmers in the country have been holding off on sales in hopes of better prices, which has in turn kept the U.S. shipping beans much later in the season than many anticipated. In the top-producing state of Mato Grosso, farmers have sold 62% of their crop, versus 70% last year at this point.

Another month of record-setting Chinese bean imports... China imported a record-high 8.02 MMT of soybeans in April, marking the fourth consecutive month where shipments were record-large for their respective months, according to preliminary customs data. Last month’s shipments were up 13.4% from year-ago and 26.7% from March.

Chinese soybean production expected to rise as corn acres slide... China will likely produce a 211.5 MMT corn crop in 2017, down 3.7% from year-ago levels, says the China National Grain and Oils Information Center. It estimates the country’s soybean crop at 14.3 MMT, up 9.2% from the year prior. China’s wheat crop will likely total 129.2 MMT in 2017, up marginally from the year prior.

Mills increasingly concerned about supplies of high-quality wheat... Flour mills in the U.S. are reportedly scrambling to secure high-protein wheat supplies amid concerns this year’s crop will yield lower-quality grain after recent freeze events and a late winter storm. Cash HRW wheat prices have soared, allowing producers holding wheat with 12% to 14% protein to sell at prices of $5.50 per bu. or more, according to Reuters. “Everything sitting in warehouses is generally low-protein. So if we have back-to-back years of low-quality HRW wheat, that’s a huge concern,” explains Tregg Cronin, an analyst at Halo Commodities.

Perdue touches on trade policy, ethanol in Iowa remarks... USDA Secretary Sonny Perdue’s speech Friday in Iowa was not the “first major farm policy address” of his tenure leading USDA, as he spoke mostly “from the heart” and not from the 17 pages he said some staff had written for him. He confirmed the Trump administration’s support for ethanol and listed trade, support for farm labor and working as the nation’s chief agriculture salesman as his top priority. Between the North American Free Trade Agreement, expected USDA budget cuts, the construction of a new farm bill, and naming new subcabinet members, Perdue added that he is focused on the building blocks of a better USDA. Click here for more highlights .

Relatively quiet week ahead for Washington... The House is out but the Senate is in during a relatively quiet week ahead for Washington. The Senate will hold confirmation hearings on several sub-Cabinet posts. The chamber is expected to vote on the nomination of Robert Lighthizer to be the next U.S. Trade Representative (USTR). That could also result in the administration finally delivering the notice to Congress that it intends to renegotiate NAFTA. The Trump administration will probably still make trade policy headlines as officials have noted there will be new trade announcements nearly every week ahead. Some additional names could surface for posts at USDA now that Sonny Perdue is getting up to speed in his office.

Macron wins French election... Centrist candidate Emmanuel Macron won the French presidential election on Sunday and pledged to heal France’s rifts after his major victory over Marine Le Pen in yesterday’s presidential election — Marine Le Pen lost by 30 points. The first priority for the new president will be to secure as much support as possible in the parliamentary elections on June 11 and 18. Initial reaction to the as-expected result in currency markets has been very muted.

Trade focuses on correcting cattle’s overbought condition, but futures well below cash... Cattle futures posted a sharp setback on Friday as traders focused on the markets’ overbought condition more so than futures’ discount to the cash market. More corrective trade is likely early this week, but we also would not be surprised to see some bargain buying on a price break. Limits are expanded today.

Buying in hogs could moderate this week... Cash hog bids strengthened last week, helping lean hog futures to extend their recent sharp correction. But with futures trading well above the cash hog index, some leveling off is very much a possibility this week. Traders will also monitor the product market for signs the recent price runup for beef has shifted some demand to pork.

Overnight demand news... Iraq tendered to buy at least 50,000 MT of wheat from the U.S., Canada or Australia; the U.S. has the lowest offer. Pakistan purchased around 60,000 MT of soybeans, likely from the United States. The country also bought around 60,000 MT of canola from Australia. Jordan tendered to buy 100,000 MT of wheat and 100,000 MT of barley.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Consultant Raises Brazilian Soybean Crop Peg Again

Fri, 13 Nov 2020 01:17:36 GMT

Grains favor upside overnight, while soybeans are down slightly... Corn futures favored the upside overnight and as of 6:30 a.m. CT most contracts are fractionally higher. Soybean futures chopped on either side of unchanged overnight but the market is currently trading low-range with fractional to 1-cent losses. Winter wheat futures are mostly fractionally higher, while spring wheat is posting gains around 2 cents. The U.S. dollar index is posting moderate gains, while crude oil futures are just marginally higher.

PF CCI: Notable drop in winter wheat ratings... 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 329.27 points, down 9.68 points from last week. Kansas led the decline, falling nearly 9 points. The SRW wheat crop also fell notably (6.64 points) to 366.28 points. Both crops are below year-ago ratings. Get more details .

Consultant again raises Brazilian soybean crop peg... South American Crop Consultant Dr. Michael Cordonnier raised his Brazilian soybean crop estimate another 1 MMT to 111 MMT, noting that yields in Rio Grande do Sul were even better than already high expectations and strong yields are expected in northeast areas. He has a neutral bias toward the crop, which he points out is now 97% harvested. He still estimates Brazil’s corn crop at 92 MMT, and has a neutral bias going forward. Cordonnier also maintained his Argentine soybean and corn crop estimates that stand at 55 MMT and 37 MMT, respectively.

Branstad to get panel vote today... The Senate Foreign Relations Committee will vote this morning on the nomination of Terry Branstad to be U.S. ambassador to China. The Iowa governor is expected to easily pass the committee before heading to the Senate floor for a full vote as soon as this week.

Little change in French plantings from year-ago... France’s farm ministry still estimates that soft wheat will be planted to 5.2 million hectares in 2017, near steady with the year prior. But the ministry says that corn acres will contract slightly (2.3%) to 1.39 million hectares. Barley and rapeseed sowings are also expected to come in near steady with year-ago at 1.9 million hectares and 1.44 million hectares, respectively.

Egypt working to boost wheat storage capacity... Egypt hopes to increase wheat silo storage to 3.13 MMT this year, which would be more than double the country’s 1.528 MMT in storage for 2015-16. Egypt, the world’s largest importer of wheat, has tried to limit the use of private sector silos and boost its own storage capacity to cut down on smuggling in local wheat procurement efforts.

India ups wheat crop estimate... India’s government estimates ample monsoon rain will boost its food grain production to a record 273.38 MMT in 2016-17. It details that the Indian wheat crop will total 97.44 MMT in 2016-17, which is an increase of 800,000 MT from its previous crop peg.

Fund positioning weighs on front-month and lifts deferreds... Funds rolled out of June live cattle and into deferred months to start the week, and more such action is expected in the days ahead. But with the front-month already nearly $17 below the last week’s cash action, the market could (should) eventually see some buying. Adding to such ideas, Choice and Select boxed beef values surged $2.57 and $3.32, respectively, to start the week. However, this did slow movement to 80 loads. Also encouraging, showlist estimates are down a net 16,000 head this week.

Cash and product market strength lift lean hogs... Pork prices also strengthened amid light movement to start the week. Cash hog bids firmed on Monday as well. This combination paired with recognition that supplies are tightening seasonally lifted lean hog futures to start the week and could lead to followthrough buying today.

Overnight demand news... Algeria tendered to buy a nominal 50,000 MT of milling wheat and 50,000 MT of barley. Taiwan purchased 95,750 MT of milling wheat from the United States. Japan’s ag ministry is seeking a total of 138,188 MT of food-quality wheat from the U.S., Canada and Australia in its regular tender.

Today’s reports:

No reports

First Thing Today: Markets in Holding Pattern Preceding USDA Reports

Fri, 13 Nov 2020 01:17:36 GMT

Markets in holding pattern preceding USDA reports... Corn futures held to a very narrow trading range overnight and as of 6:30 a.m. CT the market is narrowly mixed. Soybeans are fractionally to a penny lower. Wheat futures saw choppy trade overnight, but most contracts are currently 1 to 3 cents higher. The U.S. dollar index is down slightly, while crude oil futures are posting solid gains.

Wheat production, carryover updates out today... USDA will issue its first survey-based estimate of the winter wheat crop today that traders expect to come in around 1.293 billion bu., which would be a sharp decline from the year prior. But recent weather events means there is a lot of uncertainty about the peg. The department will also update its 2016-17 balance sheet and release its first look at 2017-18. Traders expect it to estimate 2016-17 corn carryover around 2.326 billion bu., with 2017-18 carryover near 2.122 billion bu.; soybean carryover around 438 million bu. for 2016-17 and 563 million bu. for 2017-18; and wheat carryover at 1.162 billion bu. for 2016-17 and 934 million bu. for 2017-18.

USDA puts six-month delay on organic animal welfare standard implementation... USDA announced a six-month delay on implementation on organic animal welfare standards, saying it intends to seek more public input on whether the measure should take effect, be delayed further, be indefinitely suspended or withdrawn. In a Federal Register notice, USDA said that “significant policy and legal issues” warrant additional review. The measure was originally supposed to take effect on March 20, but that deadline was initially pushed back to May 19. Senate Agriculture Chairman Pat Roberts (R-Kan.) said the rule would be “disastrous” for farmers and result in “increased prices at the grocery store; family farmers will be put out of business; and animal health will be put at risk, which will decrease food safety.”

Little change in soybean planted acreage likely for Mato Grosso... Farmers in Mato Grosso, Brazil’s largest soybean producing state, will likely increase soybean plantings marginally (30,000 hectares) to 9.42 million hectares (23.277 million acres) in 2017-18, resulting in a crop of around 30.58 MMT, forecasts the ag research agency Imea. So far, producers there have only sold 1.74% of their expected 2017-18 crop, versus last year at this time when forward sales stood at nearly 9%, Imea details. Planting of the crop should get underway in September.

Ag ministry calls for a drop in China’s corn crop and a boost in soybeans and cotton... Chinese farmers will likely plant 35.84 million hectares (88.563 million acres) to corn this year, which would be a decline of 2.5% from the year prior, says the country’s ag ministry. It expects this to translate to a 213.19 MMT crop, which would be a cut of 2.9% from last year. On soybeans, the ag ministry projects China will boost acreage by 10.34% to 7.90 million hectares (19.521 million acres) for a crop of 14.10 MMT. It expects the country to bring in 93.16 MMT of soybeans this year, up 4.2% from last year thanks to a recovery in hog production and rising soymeal demand. The ministry also expects farmers to boost cotton acreage marginally to 3.2 million hectares, lifting cotton production to 4.88 MMT versus 4.72 MMT last year.

Chinese inflation gauge comes in just above expectations... China’s Consumer Price Index (CPI) climbed 1.2% from year-ago levels in April, according to the country’s statistics bureau, which was a 0.3-point boost from March and a bit above expectations for a 1.1% increase. Food prices fell 3.5% in April. Beijing is targeting consumer inflation of 3.0% this year, which would be steady with 2016.

FranceAgriMer raises wheat export forecast, trimming ending stocks... For the second month in a row, FranceAgriMer has cuts its 2016-17 ending stocks estimate for soft wheat, dropping it 200,000 MT to 2.4 MMT. This would be the lowest level in three years and a notable retreat from ending stocks of 3.3 MMT in 2015-16. The French farm office increased its outlook for soft wheat exports outside the European Union by 200,000 MT to 5.2 MMT; it also raised its projection of shipments within the bloc by 100,000 MT to 5.8 MMT.

Recovery in Indian cotton acreage expected... Cotton planting in India is likely to surge 15% in 2017-18 to a three-year high of around 12.08 million hectares (29.9 million acres), says Mekala Chockalingam, chairman of the state-run Cotton Corporation of India. A forecast for better monsoon rains as the threat of El Nino fades along with higher cotton prices are expected to encourage farmers to switch away from other crops. Planting should get underway in earnest next month with the onset on the rainy season.

Disconnect between cash and futures creates cash cattle trade uncertainty... Showlist estimates are tighter and the boxed beef market continues to rally which would typically point to higher cash cattle trade. But with the front-month trading nearly $20 below last week’s average cash price, this could make it tough for feedlots to get higher prices again this week -- especially with packers cutting in the red. Nevertheless, futures have likely overdone it to the downside. Today’s online Fed Cattle Exchange auction should provide additional cash market insight.

Aggressive hog processing... Lean hog futures favored the upside yesterday, but the market did finish well off session highs as traders noted some softer cash hog bids. But as volume was on the light side, this may not have been an accurate market test. This week’s kill is running 35,000-head ahead of week-ago and 23,000-head above year-ago as packers take advantage of profitable cutting margins. Of note, pork movement finally picked up on Tuesday, with 436.41 loads changing hands on a $1.86 rise in the pork cutout value.

Overnight demand news... There is no business to report.

Today’s reports:

9:30 a.m., Weekly Ethanol Production -- EIA
11:00 a.m., WASDE -- ERS
11:00 a.m., Cotton Ginnings - Ann. -- NASS
11:00 a.m., Crop Production -- NASS
11:15 a.m., Cotton: World Markets and Trade -- FAS
11:15 a.m., Grains: World Markets and Trade -- FAS
11:15 a.m., Oilseeds: World Markets and Trade -- FAS
11:15 a.m., World Agricultural Production -- FAS
2:00 p.m., Season Average Price Forecast -- ERS
2:00 p.m., Broiler Hatchery -- NASS
2:00 p.m., CE: Cotton 2015-2016 -- NASS

First Thing Today: Trump’s Self-inflicted Crisis Has Growing Implications

Fri, 13 Nov 2020 01:17:36 GMT

Good morning!

Position evening in the wake of USDA’s reports... Corn futures are fractionally to a penny lower, while soybeans are up 2 to 3 cents in most contracts. Wheat futures are up 1 to 2 cents. The U.S. dollar index is barely lower, while crude oil futures are posting solid gains.

Trump’s self-inflicted crisis has growing implications... Democrats smell opportunity in 2018 elections and are already starting to slow-walk congressional activity as a result of President Donald Trump’s firing of FBI Director James Comey, amid other Trump missteps. Meanwhile, the Senate Intelligence Committee has issued a subpoena to former national security adviser Michael Flynn for documents related to its investigation into Russian interference in the election, committee leaders announced Wednesday. The subpoena came after Flynn’s attorney did not provide documents requested in late April. Trump’s real estate empire, as well as his associates’ real estate deals, are expected to come under focus.

Perdue to announce new Undersecretary for Trade post and USDA reorganization... USDA Secretary Sonny Perdue travel to Cincinnati to announce new USDA Undersecretary for Trade post, and talk about a reorganization of his department. Former USDA Secretary Tom Vilsack actively worked against installing the undersecretary post. The new position means another post will be lost, because there is a statutory cap on undersecretary jobs.

Export sales out today... USDA will release its weekly update on export sales activity at 7:30 a.m. CT today. Traders expect the report to show corn sales falling between 750,000 MT and 1.150 MMT, soybean sales ranging from 300,000 MT to 700,000 MT, wheat sales of 250,000 MT to 650,000 MT, soymeal sales between 40,000 MT and 215,000 MT, and soyoil sales ranging from 0 MT to 35,000 MT.

Aggressive corn buys at Chinese auctions continues... China sold roughly 2.139 MMT of the 2013 corn crop up for auction this week at an average price of 1,378 yuan ($199.64) per MT. This represented 85.4% of the total reserve supplies put up for auction, signaling strong demand persists.

Exchange raises Argentine soybean crop estimate... Argentina’s 2016-17 soybean crop will likely total 57 MMT, says the Rosario Grains Exchange, which is a 1 MMT increase from its previous peg. Yesterday, USDA also raised its soybean crop estimate for Argentina by 1 MMT to 57 MMT.

Brazil extends port license duration... Brazil has extended the length of its port operating licenses from 25 years to 35 years, according to the government’s official gazette. The decision also allows an operator’s first license to be repeatedly extended for up to 70 years. Previously, these licenses could only be extended once by 25 years. These changes are aimed at attracting private investment in infrastructure. They could also help expand ports’ capacity to ship commodities like soybeans and corn.

Brazil’s Maggi emphasizing safety of Brazilian food supplies... Since the meat safety scandal in March, Brazil has tightened controls on shipments, with importers inspecting 100% of merchandise at destination, Ag Minister Blairo Maggi told a congressional hearing yesterday, adding that no problems with production have yet been found. He also said he plans to visit the United Arab Emirates, Kuwait, Saudi Arabia and Qatar on Friday to reassure these major poultry buyers about the quality of Brazilian meat.

China lifts ban on Canadian poultry imports... China has lifted a ban on poultry imports from Canada. The restrictions were put in place in 2014 in response to an H5 bird flu outbreak.

Cash cattle trade begins at softer prices... Cattle traded at slightly lower prices at the online Fed Cattle Exchange auction on Wednesday, paving the way for the start of trade on the Plains at $138 and in Iowa at $140. This compares to last week’s action that ranged from $140 to $147. June live cattle hold nearly a $14 discount to the lower end of this week’s action, signaling some corrective trade is warranted. Meanwhile, boxed beef prices continue to tear higher.

Cash hog prices on the rise... Pork movement was decent yesterday at 321.66 loads, and pork cutout prices have climbed $3.62 over the past week. Cash hog prices have also been on the rise. But May lean hog futures are already at a fairly substantial premium to the cash index considering the contract must settle to it in a matter of days. The June contract is more than $11 above the index, which is not unreasonable given expectations for seasonal supply tightening.

Overnight demand news... Algeria’s state grain buyer purchased an unspecified amount of milling wheat from optional origins. Japan bought 76,357 MT of food-quality wheat from the U.S. as well as 30,271 MT from Canada and 31,560 MT from Australia.

Today’s reports:

7:30 a.m., Weekly Export Sales -- FAS
7:30 a.m., Drought Monitor -- USDA/NWS
8:00 a.m., Feed Grains Database -- ERS
2:00 p.m., Dairy Monthly Tables & Dairy Quarterly Data -- ERS
2:00 p.m., Wheat Data -- ERS

First Thing Today: USDA Secretary Perdue to Appear at House Hearing Today

Fri, 13 Nov 2020 01:17:36 GMT

Grain and soybean futures modestly higher... Corn futures are fractionally to a penny higher after trading on either side of unchanged overnight. Soybeans are trading near session highs with gains of 2 to 3 cents. Wheat futures are up 1 to 3 cents, with the SRW and HRS wheat markets leading gains. The U.S. dollar index is again under pressure, while crude oil futures are slightly higher.

USDA Secretary Perdue to appear at House hearing today... USDA Secretary Sonny Perdue will provide the House ag panel with an update on the state of the rural sector. Panel members will likely ask him about the recently announced USDA reorganization, with some lawmakers disagreeing with that they believe is a downgrading of the agricultural research sector. Cotton and dairy interests will likely ask Perdue for an update of possible assistance to those sectors. Trade policy queries will likely come on several individual topics.

Stocks of wheat at India’s ports at record high... Supply tightness after back-to-back years of drought prompted India to import nearly 5 MMT of wheat between June 2016 and April 2017, which was its highest level in a decade. But now that a bumper domestic crop is hitting the market, flour mills are uninterested in buying imported supplies. This has left India with record-high wheat inventories at its ports of around 1.8 MMT. But traders note that demand for imported wheat may pick up late this year or early in 2018 as it will take time to rebuild stocks to comfortable levels.

Brazil auctions financial instruments meant to improve prices for corn producers... Brazil’s food supply agency Conab will hold auctions of three financial instruments on corn (put options and the so-called PePro and PEP contracts) on May 25 in Mato Grosso. The instruments that will be auctioned are meant to ensure that growers in this top producing state receive at least the minimum value for corn guaranteed by the government in a year where a record-setting crop has weighed on prices. This is Conab’s third such auction this year.

Marginal gain in German wheat acres... German farmers have planted around 3.16 million hectares to winter wheat this season, which is a 0.9% gain from the year prior, reports the country’s national statistics office. Germany is the European Union’s No. 2 wheat producer and wheat exporter. On the other hand, its rapeseed sowing fell by 1% to 1.31 million hectares. The country is usually the bloc’s top rapeseed producer.

Choice boxed beef values continue higher... Cattle futures have faced pressure this week amid speculation the cash and product markets have hit or are near a top. While Select values slipped the past several days, Choice cuts continue to climb and are up $7.72 for the week. This has widened the spread between the cuts to $25.49. Cash cattle trade is at a standstill, but traders are banking on trade taking place below last week’s $138 action in most locations.

Uptick in pork movement... Pork movement was solid at 361.77 loads yesterday on a $1.61-gain in the pork cutout value. All cuts except hams strengthened, with ribs and bellies leading gains. Traders are hopeful this signals retailers are preparing for post-Memorial Day pork features. Cash bids were softer in the western Corn Belt but higher in the eastern Belt yesterday.

Overnight demand news... Jordan made no purchase in its international tender to buy 100,000 MT of milling wheat; it also issued a new tender to buy 100,000 MT wheat from optional origins. Tunisia issued an international tender to buy 92,000 MT of soft milling wheat from optional origins. Egypt tendered to buy an unspecified amount of wheat from global suppliers. Taiwan bought around 65,000 MT of corn likely to be sourced from Brazil. Japan received no offers in its simultaneous buy and sell auction to purchase 120,000 MT of feed-quality wheat and 200,000 MT of feed barley.

Today’s reports:

9:30 a.m., Weekly Ethanol Production -- EIA
2:00 p.m., Broiler Hatchery -- NASS