First Thing Today | April 8, 2022

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Good morning!

Quiet trade ahead of USDA report... Grain and soy complex futures held in narrow ranges in light trade overnight as traders await USDA’s April World Agricultural Supply and Demand Estimates (WASDE) Report later this morning. As of 6:30 a.m. CT, corn futures is trading fractionally on either side of unchanged, soybeans are 3 to 6 cents higher, SRW wheat is 2 to 4 cents higher, while HRW and HRS wheat are mostly 1 to 3 cents higher. Front-month U.S. crude oil futures are just above unchanged, while the U.S. dollar index is around 160 points higher this morning.

April WASDE Report out later this morning... USDA will release its April WASDE Report at 11 a.m. CT. Typically the April report is a virtual yawner, featuring only minor fine tuning to the old-crop balance sheets. Global supply issues due to the war between Russia and Ukraine, and potential impacts that could have on demand for U.S. products creates a little more uncertainty for today’s report. Pre-report estimates from a Reuters poll expect U.S. ending stocks to come in at 1.415 billion bu. for corn (1.440 billion bu. in March), 262 million bu. for soybeans (285 million bu. in March) and 656 million bu. for wheat (653 million bu. in March). Global ending stocks for corn, soybeans and wheat are all expected to tighten a little from last month.

RFA’s Cooper: EPA’s SRE announcement a ‘hollow victory’ for biofuels... Geoff Cooper, chief executive of the Renewable Fuels Association, called EPA’s decision to rescind 36 refineries’ previously granted waivers from 2018 biofuel-blending requirements but not require the facilities to buy compliance credits to fulfill the quotas “a hollow victory for the biofuels industry.” Cooper said, “EPA admits that those exemptions never should have been granted in the first place, but now is sweeping them under the rug and letting the refiners who got these exemptions off the hook. The so-called ‘alternative compliance approach’ issued by EPA is really a no-compliance approach.”

FAO global food price index surges to record-high... Global food prices as measured by the UN Food and Agriculture Organization (FAO) surged 12.6% in March to an all-time high behind record levels for vegoils, cereal grains and meat. Sugar and dairy prices also rose significantly but didn’t hit record highs. FAO’s global food price index is up 33.6% from last year. Compared to year-ago, prices jumped 56.1% for vegoils, 37.3% for cereal grains, 23.6% for dairy, 22.6% for sugar and 19.0% for meat.

FAO lowers 2022 world wheat production forecast... FAO’s global wheat production forecast for 2022 was lowered slightly, “largely as a result of the conflict in Ukraine,” but it still points to an increase of 1.1% from 2021 to 784 MMT. FAO says, “Wheat production in Ukraine is now forecast to fall below the five-year average, primarily reflecting expectations that at least 20% of the winter planted area may not be harvested due to direct destruction, constrained access or a lack of resources to harvest crops. Furthermore, yields are also expected to decline in 2022, as disrupted access to inputs and farmland is seen hindering the timeliness of agricultural operations. For the Russian Federation, continued conducive weather has bolstered harvest expectations and, based on reports from the country, wheat production is forecast at a level above the five-year average; however, this outlook remains preliminary particularly in consideration of uncertainties regarding the importation of some agricultural inputs.” FAO also noted “long-term dryness is impairing yield prospects” in the United States.

Russian wheat export tax jumps... Russia’s wheat export tax for April 13-19 will be $101.40 per metric ton, based on an indicative price of $344.90 per metric ton, up $5.30 from the previous week. The wheat export tax has risen for four consecutive weeks and is at its highest level.

Russia/Ukraine update... The European Union on Friday formally adopted its fifth package of sanctions against Russia, including bans on the import of coal, wood, chemicals and other products. It will also prevent many Russian vessels and trucks accessing the EU and ban all transactions with four Russian banks, including VTB. On Thursday, the United Nations General Assembly suspended Russia from the U.N. Human Rights Council over reports of “gross and systematic violations and abuses of human rights” in Ukraine. Russia's deputy U.N. Ambassador Gennady Kuzmin described the move as an “illegitimate and politically motivated step” and then announced that Russia had decided to quit the Human Rights Council altogether. Ukraine and Russia are “constantly” holding peace talks online but the mood has been affected by events including the deaths of civilians in Bucha, Ukrainian negotiator Mykhailo Podolyak said on Friday. Britain added Vladimir Putin’s daughters to its sanctions list, mirroring moves by the United States.

Additional commercial operations with confirmed HPAI cases... USDA’s Animal and Plant Health Inspection Service (APHIS) added more commercial operations as being confirmed with highly pathogenic avian influenza (HPAI). New cases were confirmed in commercial operations in North Carolina (216,049 broiler chickens and 65,601 broiler chickens in Wayne County), Missouri (a pending number of commercial turkeys in Dade County), Minnesota (20,438 commercial turkeys in Waseca County), and South Dakota (42,500 commercial turkeys in McPherson County). All of those are listed as April 6 confirmations.

China to buy more pork for reserves... China’s state planner will buy another 40,000 MT of frozen pork for state reserve – its fourth round of stockpiling this year. The move is an effort to support domestic prices, which have fallen sharply. While lower pork prices are helping ease consumer inflation, they are squeezing hog production margins. China has previously purchased 118,000 MT of pork for reserves, though that’s a small fraction of its annual production, which reached 53 MMT last year.

June cattle at discount to cash... June live cattle futures are trading around $5 below the cash cattle market, whereas they typically hold a premium at this time of year. Part of traders’ bearish attitudes into summer are tied to high slaughter weights and hefty cow slaughter, which is expected to continue and put more beef on the market. There are also concerns about beef demand given near-record retail prices and talk of potential economic recession.

Another decline in cash hog index... The string of lower daily declines in the CME lean hog index extended to six, with the price down another 40 cents today (as of April 6). Despite a 30-cent rise in April lean hog futures yesterday, the lead contract finished $1.63 below the cash index. Until the cash index shows signs of a bottom, traders are likely to be comfortable with a small discount in April hogs.

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

Today’s reports


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