First Thing Today | June 2, 2022

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Good morning!

Firmer tone overnight... Corn and wheat futures posted corrective gains overnight after sharp losses Wednesday, while soybeans built on yesterday’s gains. As of 6:30 a.m. CT, corn futures are trading 2 to 4 cents higher, soybeans are mostly 6 to 9 cents higher and wheat futures are mostly 12 to 18 cents higher. Front-month U.S. crude oil futures are around $3 lower and the U.S. dollar index is more than 300 points lower this morning.

Ukraine working with UN to restore grain exports... Ukraine is working with international partners to create a United Nations-backed mission to restore Black Sea shipping routes and export Ukrainian ag products, foreign ministry spokesman Oleg Nikolenko said. “We call on countries whose food security may suffer more from Russian aggression against Ukraine to use their contacts with Moscow to force it to lift the blockade of Ukrainian seaports and end the war,” Nikolenko wrote on Facebook.

India allows small wheat exports, but some stocks still stuck at ports... India has allowed wheat shipments of 469,202 MT since banning most exports last month, but at least 1.7 MMT is lying at ports and could be damaged by looming monsoon rains, government and industry officials told Reuters. Shipments have been allowed to mainly Bangladesh, the Philippines, Tanzania and Malaysia, said a senior government official. Indian wheat exports fell to 1.13 MMT in May from a record 1.46 MMT in April, the official said.

Another bumper Aussie wheat crop expected... Australia is poised for a third year of near-record wheat production in 2022 as high international prices and good weather boost plantings. Australian farmers are wrapping up planting efforts on a record 14.45 million hectares (35.7 million acres), according to IKON Commodities. Analysts and traders expect the country’s wheat production to range from 30 MMT to 35 MMT, well above the 10-year average of 24.8 MMT.  

Euro zone producer price inflation soars... The euro zone reported its April producer price index (PPI) surged a stunning 37.2% versus year-ago, due mostly to surging energy costs. But excluding energy, the PPI was still up 15.6% annually.

Biden sees no quick fix on gas prices... The U.S. has no immediate way to slash the price Americans are paying for gasoline and is considering other proposals such as trying to set a lower price for sale of Russian crude, President Joe Biden told reporters at the White House on Wednesday. Meanwhile, Saudi Arabia and other OPEC members may boost oil output to offset a drop in Russian production, a move that could take some pressure off surging global inflation and pave the way for an ice-breaking visit to Riyadh by Biden.

Warning signs the U.S. electrical grid can’t handle summer heat... Last month, the North American Electricity Reliability Corporation, a nonprofit electrical grid watchdog, issued a new report warning that two-thirds of the U.S. faces a heightened risk of power outages this summer. Part of the problem is adverse weather conditions. A drought in the West has diminished hydroelectric capacity, and a drought in the Missouri River basin is denying thermal generators the natural cooling they need to stay operational. But a Washington Examiner report says not all of the grid’s troubles are related to weather. “Government regulations and taxes designed to reduce carbon emissions have also caused a huge loss in generating capacity from power plants reliant on fossil fuels. The Midcontinent Independent System Operator (covering a 15-state region extending north from the Gulf through the Midwest) alone has 3.2 gigawatts less power capacity this summer than it did last year, all due to the retirement of fossil fuel power plants.” “We are headed for a reliability crisis,” Mark Christie, a Republican-appointed commissioner on the Federal Energy Regulatory Commission, said, noting that utilities are being forced to move too quickly to supposedly “renewable” energy sources such as wind and solar. “We’re just not ready yet,” Christie warned.

Efforts to expand rail transportation... The Biden administration is awarding millions of dollars to expand and improve the nation’s rail tracks to reduce freight congestion and speed up the supply chain as shippers decry what they see as poor service. The Transportation Department announced it will spend almost $370 million in grants for 46 projects in 32 states and Washington, D.C.

China announces $120 billion investment in infrastructure... The boost to infrastructure spending is part of Beijing’s effort to stimulate the economy following months of harsh Covid lockdowns. Meanwhile, Beijing’s calls for faster implementation of growth-boosting policies have intensified with data showing China’s economy continued to decline in May.

Weekly export sales data delayed… Due to Monday’s holiday, export sales data for the week ended May 26 is delayed until Friday.

China soybean auctions continue... China will auction another 500,000 MT of imported soybeans from state-owned reserves on June 10. Beijing continues to hold the weekly auctions to help boost supplies for domestic users.

Strong futures rally firms up cash bids... More cash cattle traded at $135 in the Southern Plains on Wednesday, steady with prices the prior day. But the strong gains in cattle futures caused packers to bump bids a little in the northern market from earlier in the week. While this week’s average cash price is likely to soften, it won’t be as low as the initial trade in the Southern Plains suggested, as the northern market has been running stronger for a long time.

String of cash index strength ends... The CME lean hog index is down 24 cents today (as of May 31) to $104.91, breaking a nearly two-week string of gains. June hog futures finished yesterday nearly $5 above the cash index, while the July contract held a roughly $7.50 premium and August hogs ended around $4 above cash. Traders may wait on the cash index to firm again before extending those premiums.

Overnight demand news... Egypt bought 465,000 MT of wheat, including 175,000 MT from Russia, 240,000 MT from Romania and 50,000 MT from Bulgaria. Algeria purchased around 90,000 MT of milling wheat from an unspecified origin.

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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