First Thing Today | April 10, 2023
Good morning!
Varied price tone to open the week... Wheat futures traded solidly higher coming out of the extended holiday weekend, while corn favored the downside and soybeans traded mixed. As of 6:30 a.m. CT, corn futures are trading steady to 2 cents lower, soybeans are fractionally lower to 2 cents higher, SRW wheat is 3 to 4 cents higher, HRW wheat is 8 to 9 cents higher and spring wheat is 6 to 8 cents higher. Front-month crude oil futures are near unchanged, while the U.S. dollar index is around 150 points higher.
Warm, dry forecast for central United States... Above-normal temps are expected this week, along with mostly dry conditions across the central United States. That will improve field conditions for spring planting in the Corn Belt but will continue to stress dry HRW areas of the Southern Plains. Warmer, drier weather will be welcome in the Delta and Southeast after heavy weekend rainfall.
Russia threatens to bypass Black Sea grain deal... Russia on Friday threatened to bypass the UN-brokered grain deal unless obstacles to its agricultural exports were removed, while talks in Turkey agreed removing barriers was a necessary condition to extending the agreement beyond next month. Russian Foreign Minister Sergei Lavrov said Russia could work outside it if Western countries maintain what he said were obstacles to agricultural exports that were getting tougher. Lavrov said that if the West did not want to be honest about what UN Secretary-General Antonio Guterres had sought to do with the deal, then Ukraine would have to use land and river routes to export its grain.
Poland to temporarily halt Ukraine grain imports... Imports of Ukrainian grain to Poland will be temporarily halted to mitigate impact on prices, but transit will still be allowed, Polish Agriculture Minister Robert Telus said on Friday. Telus said, “Transit will be allowed but will be closely monitored in both countries, so that Ukraine grain doesn’t stay in Poland.”
Russia considering raising calculation price for wheat export duty... Russia is considering raising its base price for calculating the wheat export tax to 17,000 rubles ($212.23) per metric ton from 15,000 rubles, Vedomosti daily newspaper reported, citing two unnamed sources in exporting companies. The move would reduce the rate for export shipments.
Russia raises wheat export tax... Russia’s wheat export tax for April 12-18 will be 5,339.4 rubles ($65.31) per metric ton based on an indicative price of $289.20. That’s up from a rate of 5,179.4 rubles per metric ton the previous week.
India likely to see below-normal monsoon rain this year... The coming season may bring only 94% of the rain India usually gets from June to September, Skymet Weather Services Pvt said. A lack of rain spells trouble for the economy as it might cut yields of summer-sown crops like rice and sugar cane, driving up food prices. The India Meteorological Department, the nation’s official forecaster, is likely to provide its monsoon prediction later this month.
Port workers return... Normal operations resumed at the Ports of Los Angeles and Long Beach, as dockworkers returned to container terminals for the Friday evening shift. “It’s a go,” said Alan McCorkle, chief executive officer of Yusen Terminals LLC at the Port of Los Angeles. “Labor is showing up.” Worker shortages shuttered container terminals on Thursday evening and Friday morning.
The week ahead in Washington... Congress remains on recess this week. The World Bank and the International Monetary Fund hold their spring meetings in Washington D.C. The economic focus will be Wednesday’s consumer price index data for March, with expectations consumer inflation will slow to 5.2% annually from a 6% gain in February. The highlight for agriculture will be USDA’s April Supply & Demand Report on Tuesday.
World Bank to prioritize climate... Treasury Secretary Janet Yellen said she expects an update to the World Bank’s mission to include building resilience against climate change and pandemics in its core goals as the bank holds its 2023 Spring Meetings this week. Ajay Banga, the U.S. nominee for World Bank president, said he’ll take a stronger stance on climate change. Environmental groups are protesting the event, calling on the bank and its shareholders to stop funding fossil fuels and instead fund clean energy and justice investments.
March jobs growth about as expected... Last Friday’s jobs reports showed non-farm payrolls increased 236,000 in March, down from a gain of 311,000 the previous month. While the jobs growth was about as expected, the numbers favored monetary policy hawks who want to see the Fed further raise interest rates to tame inflation. “I continue to anticipate that the US economy will grow and the labor market will remain strong, and inflation will come down,” Treasury Secretary Janet Yellen said in an AFP interview.
JPMorgan’s Dimon sees bank crisis near end even if more fail... The bank crisis that rattled global markets last month is probably nearing an end, even if more unforeseen failures occur, JPMorgan CEO Jamie Dimon said. Only a handful of lenders have the problems that toppled Silicon Valley Bank, and when the industry starts reporting quarterly earnings next week, the numbers will probably be good, Dimon told CNN last week. Asked if more bank failures might come, he said he didn’t know. Yellen said the U.S. is committed to ensuring that all deposits are safe and monitoring banking system conditions. “Our banking system is sound and it’s resilient” and has strong capital and liquidity, Yellen said.
Demand for China’s wheat auctions slowing... China sold 107,843 MT (77.3%) of state-owned wheat reserves put up for auction last week at an average sales price of 2,689 yuan ($391.14). The average sales price was up from 2,628 yuan the previous week. China sold 136,677 MT (15.1%) of state-owned rice reserves put up for auction at an average price of 2,537 yuan ($369.03) per metric ton.
Attitudes remain bullish toward cash cattle trade... Cash cattle prices jumped sharply for a second straight week last week, signaling packers’ need for cattle was even greater than anticipated. Traders expect another rise in cash cattle prices this week, though gains likely won’t rival those of the past two weeks. While live cattle futures posted contract highs amid the surging cash prices, traders remain relatively cautious given the cash strength.
Cash hog index continues to fall... The CME lean hog index is down another 46 cents, extending the prolonged decline. At $72.88 (as of March 6), the cash index is down $7.13 from the March peak and just 77 cents above the January low.
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
- 10:00 a.m. Export Inspections — AMS
- 3:00 p.m. Crop Progress Report — NASS
