First Thing Today | March 4, 2024
Good morning!
Corn and beans firmer, wheat mostly weaker overnight... Corn and soybeans traded higher amid corrective buying overnight, while the winter wheat markets favored the downside and spring wheat was mixed. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny higher, soybeans are 4 to 8 cents higher, winter wheat markets are 1 to 3 cents lower and spring wheat is narrowly mixed. Front-month crude oil futures are about 65 cents lower and the U.S. dollar index is trading just below unchanged.
China actively buys feedgrains... China snapped up more than 20 cargoes of feedgrain amounting to more than 1.2 MMT on the international market in the past two weeks, Bloomberg News reported. China secured shipments of corn, sorghum and barley from suppliers including Ukraine and U.S., the report said, citing people familiar with the transactions.
South American rains this week... Most computer forecast models are increasing rainfall in southwestern and interior southern Brazil late this week into next week, according to World Weather Inc., while early week precipitation will be minimal as it was during the weekend. Northeastern Brazil will be favorably wet during the next two weeks. Southwestern Argentina will be dry for a while but should get rain this weekend and next week. Northeastern Argentina will be plenty wet this week.
Chevron idles two biodiesel plants... Chevron indefinitely idled two Midwest biodiesel production facilities, the company confirmed on Friday, citing poor market conditions. Chevron idled plants in Ralston, Iowa, and Madison, Wisconsin, that combined can process 50 million gallon per year of biodiesel.
Poland wants EU sanctions on Russian, Belarussian ag products... Poland plans to ask the European Union to put sanctions on Russian and Belarusian agricultural products, Prime Minister Donald Tusk said. Poland has also demanded changes to regulations on Ukrainian grain moving across its borders amid farmer protests.
India to buy more soyoil, less palm oil... India is expected to buy larger volumes of soyoil in 2024, while purchases of palm oil are likely to decline, as negative refining margins for palm oil versus positive margins for soyoil have prompted a switch in recent weeks. Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm, said India’s soyoil imports will rise to 4.3 MMT 2023-24 from 3.5 MMT in 2022-23. He forecasts palm oil imports would fall to 9.2 MMT from 10 MMT in 2023-24. India’s sunflower oil imports are expected to remain around 3 MMT. India’s overall vegoil imports are expected to total around 16.5 MMT, the same as in 2022-23.
The week ahead in Washington... It will be a busy week in Washington. Congress faces another threat of a partial government shutdown looms if spending measures aren’t reached by March 8 for 20% of agencies, including USDA; March 22 for the rest. Congressional leaders on Sunday unveiled a minibus spending package for the six agencies facing a Friday funding deadline. That sets up a Wednesday vote in the House under the chamber’s 72-hour rule to give lawmakers sufficient time to consider the package. President Joe Biden will issue his State of the Union address Thursday evening. The economic focus will be February jobs data on Friday. Also, Fed Chair Jerome Powell will testify before House and Senate panels on Wednesday and Thursday. USDA will release its March World Agricultural Supply and Demand Estimates Report on Friday, which will likely feature minor adjustments to domestic usage forecasts. A greater focus will be USDA’s updates to global production, in particular South American crops.
China holds annual parliamentary meeting this week... China’s National People’s Congress (NPC), or parliament, will hold its annual meeting in Beijing from March 5 to March 11. China’s parliament is expected to unveil moderate stimulus plans to stabilize growth. An economic growth target of “around 5%” is expected for this year, the same as 2023. Of note, Chinese Premier Li Qiang will not hold a press conference after the close of this year's annual parliamentary meeting for the first time since 1993. The decision was made because there would be more briefings by government ministers during the annual parliament meeting where senior cabinet officials will talk about issues on diplomacy, economy and people’s livelihood.
OPEC+ agrees to extend supply curbs to end of Q2... OPEC+ agreed to extend current supply curbs to the end of June to avert a surplus, according to a statement by Saudi Arabia’s state news agency. The output reductions amount to roughly 2 million barrels a day (bpd) on paper. The measures add to a series of output cuts by OPEC+ members since 2022 designed to support prices amid rising U.S. production and tepid global demand. Since the latest voluntary cuts came into effect in January, they have lowered the combined production targets of members by about 2.2 million bpd. The Joint Ministerial Monitoring Committee led by Saudi Arabia and Russia will meet to consider market conditions on April 3. The full OPEC alliance meets June 1 in Vienna. S&P Global Commodity Insights says the OPEC+ alliance may extend its cuts through the end of the year.
Bayer's Roundup cancer trial ends in hung jury; mistrial declared... The trial involving Bayer AG in Delaware regarding allegations that its Roundup weedkiller causes cancer concluded with a hung jury, unable to reach a verdict. Jurors deliberated for approximately three days before announcing their inability to agree on whether Anthony Cloud’s non-Hodgkin’s lymphoma resulted from exposure to Roundup manufactured by Bayer’s Monsanto subsidiary. Consequently, Judge Vivian Medinilla declared a mistrial and dismissed the panel. This mistrial occurs amid ongoing litigation against Monsanto, with another Roundup trial underway in Philadelphia. In a previous Philadelphia trial, a separate jury ordered Bayer’s unit to pay over $2.2 billion in damages to a former landscaper who attributed his cancer to the weedkiller. Bayer, in response to the mistrial, emphasized the scientific consensus and regulatory assessments supporting the safety of Roundup, highlighting its victory in a separate Roundup trial in Arkansas. The company underscored its commitment to presenting cases based on robust scientific and regulatory evidence, indicating the recent verdict reaffirms its approach.
China issues new regulations to control hog numbers... China issued new regulations to control the nation’s hog production capacity after an aggressive expansion of farms over the past two years led to an oversupply, a move that could reduce the size of the world’s largest pig herd. The retention of breeding sows will be dynamically adjusted according to changes in pork consumption and pig production efficiency, the ag ministry said. Regulatory measures will be triggered when the number of breeding sows rise or fall excessively to ensure a stable supply of pigs. China last week lowered the national target for normal retention of breeding sows to 39 million from 41 million. Trivium China said, “If the number of breeding sows falls by two million in line with the lower national target, that would reduce China's pig herd size by at least 22 million, which will reshape the demand of feed grains like soybeans, corn and wheat.”
Wholesale beef market strengthens... Wholesale beef prices continued their recent assent with gains of $1.08 for Choice and $1.56 for Select on Friday. While packer margins have improved amid the strengthening beef prices, they remain solidly in the red. As a result, packers will continue to manage tight market-ready cattle supplies by reducing kill hours, which should further support beef prices.
Pork cutout surges... The pork cutout jumped $4.23 on Friday, fueled by a $20.59 surge in primal belly prices. But all other cuts except loins also firmed. The pork cutout found support just above $90.00 last week, an area that up until a couple weeks ago acted as a solid price ceiling.
Weekend demand news... Iran tendered to buy 180,000 MT of corn (sourced from Brazil, Europe, Russia, Ukraine or elsewhere in the Black Sea region), 120,000 MT of soymeal (sourced from Brazil or Argentina) and 120,000 MT of feed barley (sourced from the EU, Russia, Ukraine or elsewhere in the Black Sea region). Algeria tendered to buy at least 50,000 MT of optional origin soft milling wheat.
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
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Dairy Products — NASS
