First Thing Today | April 26, 2022

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Good morning!

Corn and spring wheat extend gains, soybeans and winter wheat rebound... Corn and spring wheat futures extended Monday’s gains overnight amid planting delays concerns. Soybeans and winter wheat rebounded from Monday’s losses on corrective buying. As of 6:30 a.m. CT, corn futures are trading around 4 cents higher, soybeans are 9 to 12 cents higher, winter wheat futures are mostly 20 to 23 cents higher and spring wheat is 14 to 22 cents higher. Front-month U.S. crude oil futures are around 50 cents higher this morning, while the U.S. dollar index is more than 100 points higher.

Big drop in already poor HRW CCI rating... When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop plunged 10.8 points to 260.7, led by a 6.2-point drop in the Kansas crop and a nearly 3-point decline in Oklahoma. The SRW rating inched 0.4 point higher to 350.6. The HRW crop stands 69.5 points below the five-year average for the date, while the SRW crop was 9.1 points below normal. Click here for more details.

Crop progress & Condition Report highlights… Following are highlights from USDA’s crop progress and condition update for the week ended April 24.

  • Corn: 7% planted (15% five-year average), 2% emerged (3% average)
  • Soybeans: 3% planted (5% average)
  • Spring wheat: 13% planted (15% average), 2% emerged (4% average)
  • Winter wheat: 11% headed (19% average), 27% rated good/excellent (30% last week)
  • Cotton: 12% planted (11% average)

Canadian acreage intentions out later this morning... Statistics Canada is expected to report Canadian all-wheat acreage intentions of 24.2 million acres, based on a Reuters survey, which would be up from 23.5 million acres last year. Canola planting intentions are expected to decline to 22.1 million acres from 22.5 million last year.

Russia/Ukraine update... Russia renewed its attacks on Ukraine’s infrastructure, striking at least five railroad stations in the west with missiles. The country’s railroad director said there had been casualties but released no details. Meanwhile, Russian Foreign Minister Sergei Lavrov warned there’s a “serious” danger of nuclear conflict — just one week after he said Moscow was committed to avoiding the use of nukes. Lavrov said on state television he regards NATO as engaging in a “proxy war” by providing weapons to Ukraine. In Germany, U.S. Defense Secretary Lloyd Austin will host talks with more than 40 countries on providing more arms to Ukraine. The secretary-general of the United Nations is due to meet Russian President Vladimir Putin in Moscow today.

Ukrainian grains slowly arriving at Romanian Black Sea port... Around 80,000 MT of Ukrainian grain is currently in the Romanian Black Sea port of Constanta, with another 80,000 MT “approved and en route,” according to the port’s manager. The port has storage capacity for about 2 MMT of grains. Romania earlier this month said it plans to re-open a Soviet-era train track at its port of Galati on the Danube River, which would help speed up Ukrainian grain transports. It was unclear when the track, which needs repair work, would reopen.

U.S. to ramp up global food aid... Biden administration is weighing swift action to ramp up global food assistance amid rising concerns that Russia’s invasion of Ukraine is stoking a hunger crisis in many poorer nations. The White House is considering attaching a global food aid request to the military aid package for Ukraine to move the relief quickly. “I don’t know if it’d be that much, but we want money for food aid, yes,” Sen. Lindsey Graham (R-S.C.) said Monday when asked about the potential aid package. “The world food program is under siege, so we need to do something.”

India ready to ship more wheat, if allowed... India is prepared to help the world with more supplies of wheat to tame food inflation if Word Trade Organization (WTO) rules allow, Foreign Minister Subrahmanyam Jaishankar said. He said India had already raised its exports of wheat to make up for supply disruptions from the Black Sea region and could do more if global trade rules allowed.

Consultant raises Argentine soybean crop peg... Crop Consultant Dr. Michael Cordonnier raised his Argentine soybean crop estimate by 1 MMT to 40 MMT, noting yields are rising as more of the later-maturing acres are harvested. Cordonnier left his Argentine corn crop estimate at 49 MMT. He also left his Brazilian soybean and corn crop estimates at 123 MMT and 112 MMT, respectively.

Court decision sets June 3 deadline for EPA to finalize RFS levels... A consent decree approved by the U.S. District Court for the District of Columbia has EPA committing to June 3 as the deadline to finalize its 2021 and 2022 Renewable Fuel Standard (RFS) levels. The action would also include the 2020 RFS levels as EPA has taken the action to do all three years — 2020, 2021 and 2022 — in one rulemaking. The decree stated that no later than June 3, EPA is to sign the final rule for the RFS obligations. However, the decree also stated the deadline could be extended if the parties involved can show “good cause” for such a delay. EPA will also have to put forth a notice in the Federal Register for public comment on the consent decree. So far, there has been no action showing in official channels on EPA submitting its final rule on the 2020, 2021 and 2022 RFS levels to the Office of Management and Budget (OMB) for review, presumably still a necessary step in the regulatory process on this matter. Also pending is the separate proposal from EPA to deny all pending small refinery exemptions (SREs) under the RFS, totaling more than 60 covering multiple compliance years. The rejection of 36 SREs for the 2018 compliance year has upped expectations remaining SREs could also be rejected.

China to step up economic support... China’s central bank said it would intensify its support of the economy, and especially small businesses, as Covid-induced lockdowns threaten growth. The People’s Bank of China also promised more funds, via relending programs, to the coal and aviation sectors.

Rough start to the week for cattle market... Cattle futures faced heavy pressure on Monday amid bearish fundamental news, technical-based selling and heavy pressure from outside markets. Yesterday’s price performance in futures likely points to lower cash cattle prices this week, though active trade isn’t likely until late in the week.

Cash hog index firms, pork cutout weakens... The CME lean hog index is up another 83 cents today as it continues to climb seasonally. The pork cutout value fell $5.49 on Monday, led by a $24.18 drop in belly prices. Packers continue to struggle to find strong retailer demand when the cutout pushes above the $110.00 level, as it did late last week.

Overnight demand news... Turkey tendered to buy 210,000 MT of milling wheat from unspecified origins.

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 USDA reports scheduled.
 

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