First Thing Today | September 26, 2023

First Thing Today
First Thing Today
(Pro Farmer)

Good morning!

Quiet overnight trade in grains... Corn futures held near unchanged, while soybeans and wheat posted mild gains during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading unchanged to fractionally lower, soybeans are 5 to 7 cents higher, SRW wheat is 3 to 5 cents higher, HRW wheat is mostly 1 to 2 cents higher and HRS wheat is 3 to 6 cents higher. Front-month crude oil futures are around 65 cents lower and the U.S. dollar index is modestly weaker.

Senate nears agreement on short-term spending measure to avert gov’t shutdown... Senate negotiators, comprising both Republicans and Democrats, are edging closer to a deal on a short-term spending measure aimed at preventing a government shutdown after Oct. 1, according to several reports. The proposed legislation would extend funding for a period of four to six weeks, which is a shorter timeframe than Democrats’ initial preference of extending funding into December but could facilitate passage in the House. Should the Senate successfully pass the stopgap bill and forward it to the House, Speaker Kevin McCarthy (R-Calif.) faces a challenging decision regarding whether to hold a vote. It remains uncertain whether the Senate bill will incorporate emergency disaster aid or assistance to Ukraine for its ongoing conflict with Russia. These elements, favored by the White House, have not garnered support from some House Republicans, particularly in the case of the Ukraine aid package. Bottom line: If McCarthy decides to put the Senate’s bill up for a vote, some GOP House renegades have indicated their readiness to attempt his removal from office.

Cordonnier cuts yield, production estimates... Crop consultant Dr. Michael Cordonnier lowered his corn and soybean yield estimates, noting crops are maturing faster than normal, meaning recent rains came too late to have much benefit. Cordonnier cut his corn yield by 1.5 bu. to 171.5 bu. per acre, reducing the production forecast to 14.93 billion bushels. He cut his soybean yield by 0.5 bu. to 49.0 bu. per acre, lowering his production estimate to 4.05 billion bushels.

Corn, soybean CCI ratings post late-season increases... When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop increased 3.7 points to 336.6, which was now 1.4 points (0.4%) above last year. The soybean crop rose 1.4 points to 332.6, though that was still 5.5 points (1.6%) below last year at this time. Illinois led the increase in condition ratings for both crops, rising 3.5 points for corn and 2.9 points for soybeans. Click here for details.

Crop progress report highlights… Following are highlights from USDA’s crop progress and condition update as of Sept. 24.

  • Corn: 95% dented (93% average); 70% mature (60% average); 15% harvested (13% average); 53% good/excellent (51% last week).
  • Soybeans: 73% dropping leaves (62% average); 12% harvested (11% average); 50% good/excellent (52% last week).
  • Cotton: 65% bolls opening (62% average); 13% harvested (13% average); 30% good/excellent (29% last week).
  • Spring wheat: 96% harvested (96% average).
  • Winter wheat: 26% planted (29% average); 7% emerged (6% average).

Russia again attacks Ukrainian port and grain facilities... Russia hit Ukrainian port infrastructure and grain storage facilities in an overnight drone strike on the grain exporting district of Izmail on the Danube River, Ukrainian officials said. Russia has repeatedly attacked Ukrainian grain and export facilities since exiting the Black Sea grain deal in mid-July.

Russia seeks re-entry to UN human rights council amid reports of diplomatic bargaining... Russia was expelled from the United Nations human rights council in April 2022 following its invasion of Ukraine. Diplomats have indicated that Russia is engaging in diplomatic efforts, including offering grain and weapons, in exchange for votes in favor of its reinstatement. Of note: The council, whose membership has included countries such as Saudi Arabia, Venezuela and China, received a report on Monday detailing allegations of war crimes committed by Russia.

Czech ag minister calls for increased checks on Ukraine grain corridors... The European Commission should make checks on corridors of solidarity for Ukraine grains and enact a deposit system for exports, the Czech ag minister said after meeting ministers from Slovakia, Hungary and Poland. Slovakia, Poland and Hungary unilaterally banned imports of Ukrainian grain after the European Commission let a multilateral ban expire earlier this month.

Indonesia explores rice imports from China and Cambodia amid declining output...  With Indonesia’s rice production expected to decrease by 5% to 7% due to El Niño, the country has initiated discussions about the possibility of importing 1 MMT of rice from China, the head of the National Food Agency (NFA) told Reuters. Indonesia is also in talks with Cambodia to import 10,000 MT of rice. The nation has already witnessed a notable increase in rice imports, surging to 1.59 MMT from January to August, compared to 237,146 MT during the same period the previous year. This move aligns with the broader trend among Asian countries, where several nations are imposing export restrictions on rice or actively seeking to import rice to ensure domestic supply stability and manage prices.

Indonesia to pursue legal action against palm firms that use land illegally... Indonesia’s government will pursue legal action against palm oil companies that use land illegally if they do not submit required paperwork related to land use by November, a senior minister said. Indonesia earlier this year identified 3.3 million hectares (8.1 million acres) of the country’s nearly 17 million hectares of palm oil plantation were located in areas designated as forest. Under a 2020 law, plantations inside Indonesia’s forest areas can be recognized as legal if they meet a number of requirements and pay fines.

ERP payments surpass $7.46 billion with Phase 2 increase... Payments made under the Emergency Relief Program (ERP) reached $7.46 billion as of Sept. 24, USDA reported. Phase 2 payments increased to $11.75 million distributed to 6,887 recipients. Meanwhile, Phase 1 payments now stand just above $7.44 billion. There have been no significant alterations to payment totals within the Coronavirus Food Assistance Program (CFAP) efforts.

Beef, pork stocks climb less than normal in August... USDA’s Cold Storage Report showed beef stocks at the end of August at 421.6 million lbs., up 11.2 million lbs. (2.7%) from July, which was slightly less than the average increase of 11.5 million lbs. over the past five years. Beef inventories fell 92.2 million lbs. (17.9%) from the August 2022 record for the month and were 48.2 million lbs. (10.3%) less than the five-year average. Pork stocks totaled 471.1 million lbs., up 327,000 lbs. from July. The five-year average was a 10.7-million-lb. increase during the month. Pork inventories fell 71.5 million lbs. (13.2%) from last year and were 58.1 million lbs. (11.0%) less than the five-year average. 

Packers bought a lot of cattle last week... The average cash cattle price firmed 69 cents to $184.73 last week, prompting 87,000 head to be traded in the negotiated market, including 20,000 head “with time.” That was the largest weekly trading volume since June and suggests packers will be less aggressive with bids, especially with fresh contract supplies available next week. But tight market-ready supplies also limit the downside for the cash cattle market.

Cash hog fundamentals stuck in neutral... The CME lean hog index dropped 38 cents to $86.70 (as of Sept. 22). The cash index continues to consolidate around the $87.00 area ahead of what is expected to be a steep seasonal decline in the months ahead. The pork cutout value firmed $1.60 on Monday to $98.86. Packers can’t find sustained retailer demand on moves above $100.00 in the pork cutout but there’s solid demand not far below that point.

Overnight demand news... South Korea purchased 132,000 MT of corn expected to be sourced from South America or South Africa. Algeria tendered to buy 90,000 MF of corn and 30,000 MT of feed barley – both optional origin.

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

  • No reports scheduled.
 

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