First Thing Today | July 6, 2022

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Good morning!

Corrective buying overnight... Corn futures traded lower for much of the overnight session but are mildly firmer this morning, while soybeans and wheat are showing stronger corrective gains following Tuesday’s sharp losses. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are 10 to 15 cents higher, SRW wheat futures are mostly 18 to 19 cents higher, HRW wheat is 12 to 13 cents higher and HRS wheat is 3 to 6 cents higher. Front-month U.S. crude oil futures are around 75 cents higher and the U.S. dollar index is up around 450 points this morning.

Corn, soybean CCI ratings drop, spring wheat improves... When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 5.4 points to 364.1. That’s now 6.8 points below the five-year average for the beginning of July. The soybean crop dropped 5.7 points to 354.9, which is 2.5 points below average for the date – the first time the crop rating has been below average so far during the growing season. The spring wheat crop improved 7.9 points to 368.3 and is now 30.5 points above average for the beginning of July. Click here for details.

Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update for the week ended July 3.

  • Corn: 7% silking (11% average), 64% rated good/excellent (67% last week)
  • Soybeans: 96% emerged (96% average), 16% blooming (22% average), 3% setting pods (3% average), 63% rated good/excellent (65% last week)
  • Spring wheat: 20% headed (57% average), 66% rated good/excellent (59% last week)
  • Winter wheat: 54% harvested (48% average)
  • Cotton: 44% squaring (44% average), 13% setting bolls (12% average), 36% rated good/excellent (37% last week)

Ukraine expects grain crop of at least 50 MMT... Ukraine expects a grain harvest (not including oilseeds) of at least 50 MMT this year, which is “not bad given all the difficulties,” the country’s first deputy agriculture minister said, though down sharply from last year’s record 86 MMT crop. The official says most of Ukraine’s wheat crop will be milling quality and the country would need to export at least 30 MMT of grains in 2022-23.

Ukraine grain traders union raises production forecasts... Ukraine’s grain traders union UGA revised up its forecast for the country’s grain and oilseed production by 2.9 MMT to 69.4 MMT, including 27.3 MMT of corn, 20.8 MMT of wheat, 9 MMT of sunflower seed and 1.65 MMT of rapeseed. UGA says the country will be able to export 10 MMT each of corn and wheat in 2022-23, with total grain and oilseed exports likely to be between 25 MMT and 31.5 MMT, depending on the situation with blocked ports.

China finds first cases of new Omicron subvariant... China reported its first cases of the highly transmissible Omicron BA.5.2 subvariant of Covid-19. The cases were detected in Xi’an; authorities sent parts of the city into lockdown in response. Meanwhile, Shanghai is once again reporting new cases of Covid-19, raising fears of new restrictions.

Euro zone retail sales increase, but purchases of essentials declines... Compared to last year, retail sales in the euro zone rose 0.2% in May, according to Eurostat. Despite the marginal overall increase in retail spending, sales of food, drinks and tobacco dropped for a second straight month amid a spike in prices, falling 3.6% compared with last year. Prices of food, alcohol and tobacco are estimated by Eurostat to have risen 7.5% from year-ago in May.

Blinken visiting Southeast Asia, including meeting with Chinese counterpart... U.S. Secretary of State Antony Blinken departs Washington today on a trip to Southeast Asia that will include stops in Bali, Indonesia, for a meeting of G-20 foreign ministers, as well as Bangkok, Thailand. The State Department has confirmed Blinken will meet with his Chinese counterpart Wang Yi while in Bali.

Senate movement on coming reconciliation package... Senate Majority Leader Chuck Schumer (D-N.Y.) will submit text today to the Senate parliamentarian reflecting an agreement among all Democrats — including Sen. Joe Manchin (D-W.Va.) — to allow Medicare to negotiate prescription drug costs. The parliamentarian will then begin the “Byrd Bath” review process to make sure the proposal conforms with the Senate’s arcane reconciliation rules. The remainder of the package is murky but will likely contain Green New Deal language that includes an incentive payment for Sustainable Aviation Fuel.

OPEC chief Barkindo dies... OPEC Secretary-General Mohammed Barkindo passed away at the age of 63, just weeks before his term leading the cartel was to end July 31. The native Nigerian had led the Nigerian National Petroleum Corporation (NNPC) and oversaw OPEC since 2016. Barkindo’s successor at OPEC Haitham al-Ghais from Kuwait had already been chosen to take over Aug. 1, so there will be no disruption in guidance of the cartel.  

Fed study: Nothing on horizon to rival dollar’s status... The U.S. dollar’s prime international status remains unchallenged, according to a study by Federal Reserve Bank of New York staff, despite challenges from sources including geopolitics and technologies like digital currencies. Even so, the study cites some factors that could erode the international use of the dollar over time.

Light beef movement... Choice boxed beef prices firmed 84 cents on Tuesday, but packers moved only 109 loads of product on the day. With retailers likely to do only some fill-in buying following the holiday, beef movement isn’t expected to be strong. Prices will likely be as much of a determinant of post-holiday beef demand than movement.

Hog traders expecting cash market strength... Summer-month hog futures posted strong gains on Tuesday in the face of broad-based risk aversion. While the cash index is down 12 cents today (as of July 1), the fourth straight daily decline, yesterday’s price performance in hog futures suggests traders anticipate the cash market will strengthen short-term as July hogs finished at around a $1.50 premium.  

Overnight demand news... South Korea purchased 140,000 MT of corn from unspecified origins and 65,000 MT of feed wheat likely to be eastern European origin. Japan tendered to buy 70,000 MT of feed wheat and 40,000 MT of feed barley.

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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