First Thing Today | April 12, 2024
Good morning!
Corn and beans mildly firmer, wheat mixed... After weaker trade early in the overnight session, corrective buying gradually built in corn and soybeans, while wheat is narrowly mixed this morning. As of 6:30 a.m. CT, corn futures are trading fractionally higher, soybeans are mostly 1 to 3 cents higher, while wheat is trading a penny on either side of unchanged. The U.S. dollar index is around 575 points higher and front-month crude oil futures are more than $1.00 higher.
China’s soybean imports fall to four-year low for March... China imported 5.54 MMT of soybeans last month, according to preliminary customs data, down nearly 20% from last year and the lowest for the month in four years. During the first quarter of 2024, China imported 20.83 MMT of soybeans, down 10.8% from the same period last year and also a four-year low.
Disappointing China March trade data... China’s exports dropped 7.5% from year-ago to $279.68 billion in March, the biggest decline since August last year. Imports fell 1.9% to $221.15 billion, the first decline since last November. That left China with a trade surplus of $58.55 billion, the smallest since last October. China’s trade surplus with the U.S. was $22.94 billion in March.
Tai suggests end to China tariff review soon... U.S. Trade Representative Katherine Tai hinted that the review of Section 301 tariffs on China, imposed during the Trump administration, could conclude “soon.” Although no specific timeline was provided, Tai acknowledged the ongoing statutory four-year review of these tariffs and expressed hope for an imminent announcement of the outcome. Addressing the National Council of Textile Organizations, Tai emphasized the value of input from the textile industry, which has largely supported maintaining the tariffs. Speculation arose regarding the investigation’s results, especially concerning the textile industry’s concerns. Attention is now focused on Tai’s upcoming appearance before congressional trade panels next week, raising questions about whether this will serve as the platform for revealing the findings.
ADB forecasts robust growth for Asia despite China slowdown... The Asian Development Bank (ADB) predicts that despite a slowdown in China and uncertainties globally, Asia’s economic growth will remain robust this year. The bank, based in Manila, Philippines, revised its forecasts for the region, anticipating that developing economies will benefit from strong domestic demand. ADB now forecasts a 4.9% expansion for developing Asia in 2024, up from the 4.8% growth projected in December.
French wheat crop ratings continue to decline... As of April 8, France’s ag ministry rated the country’s wheat crop as 64% good or excellent, down on point from the previous week and the lowest for this time of year since 2020. The spring barley crop was rated 60% good or excellent, down one point and the lowest on record going back a decade.
IEA trims oil demand forecast... The International Energy Agency (IEA) trimmed its forecast for 2024 oil demand growth, citing lower than expected consumption in OECD countries and a slump in factory activity. IEA lowered its growth outlook for this year by 130,000 barrels per day (bpd) to 1.2 million bpd, noting pent-up demand in China after easing Covid curbs had run its course. Demand growth in 2025 will edge down to 1.1 million bpd, IEA forecasts, with global GDP growth expected to remain steady and continued expansion of electric vehicle (EV) adoption. As the global economy stabilizes and EVs become more prevalent, traditional oil demand growth is expected to decline.
British economy shows signs of exiting recession... The British economy expanded 0.1% from the previous month in February, growing for a second straight month after falling into recession during the second half of last year. But GDP contracted 0.2% from the previous year, signaling there’s still work to do to shore up the British economy.
Chinese meat imports slow dramatically in Q1... China imported 578,000 MT of meat during March, down 11.5% from last year. For the first quarter of this year, China imported 1.68 MMT of meat, down 270,000 MT (13.8%) from the same period last year. China doesn’t break down meat imports by category in the preliminary data, but the decline is due to reduced pork arrivals.
Limited cash cattle trade... Cash cattle trade has been light so far this week, with most of the sales taking place around $2.00 lower than last week. Given the sharp increase in weights and reduced slaughter runs, packer demand for cash cattle is limited.
Cash hog index, pork cutout jump... The CME lean hog index is up another $1.06 to $89.84 as of April 10. The pork cutout value firmed $1.04 to $101.29 on Thursday. Both the cash index and pork cutout value marked new highs in the seasonal price climb that’s showing no signs of slowing.
Overnight 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
- 11:00 a.m. Feed Grains Database — ERS
- 2:00 p.m. Season Average Price Forecasts — ERS
- 2:00 p.m. Wheat data — ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Turkey Hatchery — NASS
- 2:30 p.m. Commitments of Traders — CFTC
