First Thing Today | May 30, 2023

First Thing Today
First Thing Today
(Pro Farmer)

Good morning!

Beans and wheat weaker, corn mostly lower overnight... Beans and wheat faced heavy pressure coming out of the holiday weekend, while corn modestly favored the downside in mixed trade. As of 6:30 a.m. CT, corn futures are trading fractionally higher to 3 cents lower, soybeans are 11 to 13 cents lower, SRW wheat futures are 6 to 8 cents lower, HRW wheat is 15 to 16 cents lower and HRS wheat is 8 to 13 cents lower. Front-month crude oil futures are nearly $1.00 lower and the U.S. dollar index is around 165 points lower this morning.

Warm, dry week for Corn Belt... Rainfall will be limited across the Corn Belt this week, according to World Weather Inc., though some pop-up showers are possible. Temperatures are expected to be normal to slightly above normal but not excessively hot. A cool front is expected to move across the region next week, bringing an increased chance for some rains.

Framework deal reached on debt limit... President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) reached a bipartisan framework deal to raise the debt ceiling and implement many spending cuts demanded by Republicans. However, the deal avoids broader budget reductions sought by the GOP and maintains key domestic programs championed by Biden. The bill under consideration has to navigate through the House Rules Committee before reaching the House floor. If the debt-limit package clears House Rules, there are likely enough votes to clear the House floor in an expected Wednesday vote. Sources say the Senate also has votes to clear the package, but the timeline could be delayed. Click here to view some of the details in the package.

The week ahead in Washington... Lawmakers returning to Washington will face intense pressure from leaders on Capitol Hill and the White House to support the debt-ceiling bill. The key economic data this week will be Friday’s employment data for May. The focus for agriculture will be this afternoon’s Crop Progress/Condition Report, which will highlight crop planting and emergence, along with the first corn crop condition rating of the growing season.

China declines U.S. meeting request... China declined a request from the U.S. for a meeting between their defense chiefs at an annual security forum in Singapore this weekend. “Overnight, the PRC [People’s Republic of China] informed the U.S. that they have declined our early May invitation for Secretary [Lloyd] Austin to meet with PRC Minister of National Defense Li Shangfu in Singapore,” the Pentagon said in a statement to the Wall Street Journal.

Russia warns Black Sea grain deal in jeopardy... Russia warned the West on Monday a deal allowing Ukrainian grain to be exported from the Black Sea would cease unless a United Nations agreement aimed at overcoming obstacles to Russian grain and fertilizer exports was fulfilled. “If everything remains as it is, and apparently it will, then it will be necessary to proceed from the fact that it [the deal] is no longer functioning,” Russian Foreign Minister Sergei Lavrov said.

Russia raises calculation price for grain export duty, won’t increase state reserves... Russia will raise its base price for calculating wheat, barley and maize export taxes, according to a decree published on an official government website. That should result in reduced export duties. Meanwhile, Russia says it is not planning to make new purchases for state intervention stocks in 2023.

Russia sets first half 2023-24 fertilizer export quota... Russia set its quota for the export of fertilizers at 16.3 MMT for June 1 through Nov. 30. It increased the quotas for the export of urea, ammonium nitrate, complex NPK fertilizers and monoammonium phosphate by almost 2 MMT.

Brazil corn estimates raised... AgRural raised its Brazilian corn crop estimate by 2.3 MMT, due mostly to an expected bigger safrinha crop. Safrinha corn harvest stood at 0.8% as of last Thursday, according to the Brazil-based consulting firm. Crop Consultant Dr. Michael Cordonnier increased his Brazilian corn crop forecast by 1 MMT to 126 MMT.

China’s sow herd declines in April but bigger than year-ago... China’s sow herd declined 0.5% in April to 42.8 million head, according to the country’s ag ministry. However, it was still 2.6% larger than last year.

Bullish cash cattle hopes... After packers raised cash cattle prices last week, traders begin this week with bullish hopes as market-ready supplies remain tight. But packers will have fresh contract supplies available on Thursday and they purchased a large volume of cattle last week. That could lead to reduced packer demand for cash cattle.

Hog futures well below the cash index... The recent string of gains in the cash hog index came to an end. But June lean hog futures finished last Friday more than $4.00 below today’s cash index quote. That, along with the heavily oversold condition of futures, should limit further pressure, but the path of least resistance remains down, so additional selling can’t be ruled out.

Holiday weekend demand news... Exporters reported no tenders or sales.

See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.

Today’s reports

 

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