First Thing Today | March 12, 2024
Good morning!
Please fill out our acreage survey... You should have received our annual spring acreage survey via e-mail. Please fill out the survey with your current planting intentions for this year. We’ll cover results and our acreage forecasts ahead of USDA’s March 28 Prospective Plantings Report. Click here to fill out the survey if you haven’t already responded. Please complete the survey only once.
Grains lower overnight... Soybeans extended Monday’s declines overnight, while corn and wheat pulled back from yesterday’s gains. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are 1 to 2 cents lower, SRW wheat futures are around a nickel lower, while HRW and HRS futures are mostly 7 cents lower. Front-month crude oil futures are modestly firmer, while the U.S. dollar index is trading just below unchanged this morning.
Cordonnier leaves South American crop estimates unchanged... South American crop consultant Dr. Michael Cordonnier left his Brazilian soybean and corn production estimates at 145 MMT and 112 MMT, respectively, with a neutral to lower bias toward both crops. Cordonnier left his Argentine crop estimates at 50 MMT for soybeans and 54 MMT for corn, with a neutral bias toward both.
Ukraine’s grain, oilseed production could fall nearly 8%... Ukraine’s 2024 combined grain and oilseeds production is likely to shrink to 76.1 MMT from 82.6 MMT last year, Ukrainian grain traders union UGA said. It said production could include 26.3 MMT of corn, 20 MMT of wheat and 13.7 MMT of sunflower seeds. With smaller production, UGA said Ukraine’s exportable grain and oilseed surplus for 2024-25 could decrease to 43.7 MMT from 53.2 MMT in the current marketing year, including 20.5 MMT of corn, 13 MMT of wheat, 4 MMT of soybeans and 3.6 MMT of rapeseed.
ADM says global crush margins will decline... ADM reported lower-than-expected fourth-quarter earnings on Tuesday, after an investigation into accounting practices at the company’s nutrition unit delayed the release of its financial results for nearly two months. As part of its quarterly earnings report, ADM said it expects global soybean crush margins will decline this year, likely falling into a range of $35 per MT to $60 per MT.
India’s wheat stocks fall to 7-year low... India’s wheat inventories held in government warehouses dropped to the lowest since 2017, after two straight years of low crops prompted the state to sell record volumes to boost domestic supplies and lower local prices. Wheat reserves in state stores totaled 9.7 MMT at the start of this month, down from 11.7 MMT in March 2023, the state-run Food Corporation of India said. Despite the tight supply, New Delhi has resisted calls to encourage imports by cutting or removing the current 40% tax, or by directly buying from top suppliers such as Russia.
Concerns with USDA’s final meat, poultry and egg products labeling rule... USDA finalized rules regarding the use of “Product of USA” and “Made in USA” labels for meat, poultry and egg products. This rule clarifies conditions for making voluntary origin claims and adjusts the use of flags to designate origin. The requirements will take effect on Jan. 1, 2026. The phrase proposed by USDA for the voluntary label remains as animals being “born, raised, processed, and slaughtered” in the United States. If it’s a multi-ingredient product, all ingredients except spices and flavorings must be of domestic origin. This decision was based on survey results, although the survey only covered pork and beef products. Foreign trade associations and countries, including Canada and Mexico, raised concerns about the rule’s impact on market integration and compliance with trade obligations. However, USDA argues the rule is voluntary and doesn’t establish mandatory country of origin labeling requirements. The rule also addresses other claims regarding U.S. origin, such as products sliced or packaged in the U.S. or in a given state. It does not cover animal feed requirements. There were concerns about the rule's impact on trade and compliance with WTO obligations, but USDA maintains that it is consistent with trade obligations and is voluntary. The rule will apply to cell-cultured meat under FSIS jurisdiction, with certain conditions. Despite the finalized rule, questions remain about the adequacy of the survey used by USDA and concerns raised by foreign countries regarding trade obligations. Legal and other challenges may arise as the rule takes effect.
More money for meat processing; focus on seed... USDA Secretary Tom Vilsack on Monday announced another $9.5 million in grants for 42 projects for small meat and poultry processing facilities. Vilsack also unveiled a new initiative to force companies to comply with the Federal Seed Act. In a new “Website Monitoring Program,” experts will evaluate web listings for seeds for accuracy and transparency. It’s part of a broader effort to promote competition in the market for seeds, where a handful of companies dominate. Vilsack also said USDA is working with the U.S. Patent and Trademark Office to make sure seed patents aren't just “given out easily” and ensure that information is available for researchers and small seed companies to compete.
Minimal changes in ERP payouts... In the most recent week, the only noticeable change in Emergency Relief Program (ERP) payouts occurred in Phase 2 of the program, where payments increased slightly to $883.29 million as of Feb. 10, compared to $883.18 million the previous week. Total ERP payments remained virtually the same at $8.63 billion, with Phase 1 payments also showing little variation at $7.75 billion.
Tyson to close Iowa pork plant... Tyson Foods will permanently close a pork plant in Perry, Iowa, on June 28, citing a need to optimize operational efficiency to better serve customers as the reason for the closure. The plant slaughters about 9,000 hogs per day, a little less than 2% of U.S. production.
Cash cattle strengthen... Cash cattle averaged $185.12 last week, up $1.82 from the previous week and the highest price since the week ended Oct. 20 of last year. Packers purchased a strong 76,000 head in the negotiated market last week, including 24,000 head “with time.” But cash sources are expecting prices to be steady/firmer again this week. While cutting margins remain in the red, firming wholesale beef prices have lessened packers’ per-head losses. Choice beef jumped $1.84 on Monday, while Select firmed $1.45.
Cash hog index declines... The CME lean hog index is down 7 cents to $81.41 as of March 8, the first daily decline since Feb. 8 and only the fifth drop since the seasonal low was posted at the beginning of the year. April lean hog futures finished Monday at a $1.865 premium to today’s cash quote.
Overnight demand news... Iran passed on a tender to buy 180,000 MT of corn, 120,000 MT of soymeal and 120,000 MT of feed barley. Japan is seeking 114,305 MT of milling wheat in its weekly tender.
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
- 11:00 a.m. Cotton and Wool Outlook: March 2024 — ERS
- 11:00 a.m. Meat Price Spreads — ERS
- 11:00 a.m. Oil Crops Outlook: March 2024 — ERS
- 2:00 p.m. Dairy Monthly Tables — ERS
- 2:00 p.m. Feed Outlook: March 2024 — ERS
- 2:00 p.m. Wheat Outlook: March 2024 — ERS
