First Thing Today | July 1, 2022

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Good morning!

Modest corrective buying in corn and wheat, followthrough selling in soybeans... Corn and wheat futures worked mildly higher overnight following Thursday’s sharp losses. Soybeans extended yesterday’s sharp loses. As of 6:30 a.m. CT, corn futures are trading mostly 3 to 5 cents higher, soybeans are 4 to 10 cents lower and wheat futures are mostly 3 to 7 cents higher. Front-month U.S. crude oil futures are around $2 higher and the U.S. dollar index is up more than 300 points this morning.

Independence Day holiday schedule... Grain and livestock markets will trade normal hours today ahead of the holiday weekend. Markets and government offices are closed Monday, July 4, for Independence Day. Therefore, there will be no Pro Farmer market reports on Monday. Grain and livestock markets will resume trade at 8:30 a.m. CT on Tuesday, July 5. Have a happy and safe holiday.

Fed GDP tracker signals Q2 contraction... The Federal Reserve Bank of Atlanta’s closely watched GDPNow tracker estimated output contracted 1% during the second quarter. It would mark the second straight quarterly contraction. Two straight quarters of contraction wouldn’t itself indicate a recession has occurred, though it is a rule of thumb some analysts use. Recessions are determined by a panel at the National Bureau of Economic Research, a nonprofit academic group.

Record May soybean crush expected... Traders expect USDA to report a record 181.8 million bu. of soybeans were crushed in May, according to a Bloomberg survey. That would be the largest crush ever for the month and up 4.8% from last year. Corn-for-ethanol use is expected to total 449.1 million bu., which would be up 0.2% from May 2021.

Dockworker contract expires late today... The contract between the International Longshore and Warehouse Union, which represents 22,000 workers at 29 ports from San Diego to Seattle, and the Pacific Maritime Association, representing the shipping terminals, is set to expire at 7 p.m. CT. The union members primarily operate machinery like cranes and forklifts that move cargo containers on and off ships. Representatives of the two sides previously said they didn’t expect a deal by the deadline but they were dedicated to working toward an agreement. The National Retail Federation, which represents companies like Walmart and Target, and the Agriculture Transportation Coalition are among the industry groups pressing for a quick agreement. Automating the movement of containers at ports, resulting in fewer jobs, appears to be a key issue in the talks, which have been ongoing since May.

Argentine trucker strike ends... An Argentine trucker strike ended on Thursday after some unions upset with diesel shortages and prices reached a deal to lift the one-week protest around the major port of Rosario, which is expected to help the flow of grains for export. Some protests, however, could continue since some smaller trucker groups were not involved in the deal. Autoconvocados Unidos, one of the trucker unions participating in the strike called the lifting of the strike an act of good will.

EU slashes wheat production, but still sees record exports... The European Commission cut its EU soft wheat production forecast by 5.4 MMT from last month to 125.0 MMT. Production is now forecast to decline from 130.1 MMT last year. The commission cited reduced yields for several countries including France, Poland, Romania and Spain. Despite the sharp cut to production, the commission kept its projection of EU 2022-23 soft wheat exports at 38 MMT, which would be a record for the bloc.

China soybean auctions continue... China will put up for auction another 500,000 MT of state-owned soybean reserves on July 8. Beijing has been regularly selling reserve soybeans since March in an effort to boost domestic market supplies.

Euro zone inflation scores another record high... Euro zone consumer prices rose a record 8.6% on year in June after climbing 8.1% in May, according to a first estimate by Eurostat. Energy prices surged 41.9%, and prices for food, alcohol and tobacco jumped 8.9%.

China’s factory sector expands most in 13 months... The Caixin/Markit manufacturing purchasing managers index (PMI) rose to 51.7 in June, the first expansion of China’s factory sector in four months and the fastest growth in 13 months. China’s manufacturing activity was buoyed by the easing of Covid restrictions. The recovery suggested in the Caixin/Markit survey, which focused on more export-oriented and small firms in coastal regions, was stronger than China’s official PMI, which also showed expansion in the vast manufacturing sector.

China adjusts sow herd data for May... China’s ag ministry said its sow herd fell more than 8% in May compared with a year ago, more than the almost 5% decline previously estimated. But total size of the breeding herd at 41.92 million head did not change, according to data on the ministry website.

Cash cattle, futures diverging... Cash cattle prices reached a new high for the year in June – the highest price since 2015. But futures are struggling to find buyers, despite the cash strength. In fact, futures are trading well below the cash market, suggesting traders sense there will be pressure on cash prices through the third quarter.

Cash hog index peaking?... The CME lean hog index is down 40 cents today (as of June 29), the second consecutive day of price pressure. This could be the start of what is typically a lengthy period of pressure on the cash hog market as slaughter supplies build through the second half of the year. But with futures trading at discounts to the cash index, price pressure should be limited.

Overnight demand news... South Korea bought a total of 126,000 MT of optional origin corn from two separate tenders.  

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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