Good morning!
Soybeans firmer, corn and wheat weaker overnight... Soybeans mildly built on Friday’s corrective gains during overnight trade while the corn and wheat markets pulled back. As of 6:30 a.m. CT, corn futures are trading fractionally to 4 cents lower, soybeans are 3 to 4 cents higher, SRW wheat futures are 5 to 6 cents lower, HRW wheat is 2 to 5 cents lower and HRS wheat is 1 to 2 cents lower. Front-month crude oil futures are around 75 cents higher and the U.S. dollar index is modestly weaker.
Banking concerns ease, geopolitics in greater focus... The U.S. and European banking systems appear to have stabilized – at least for the moment. First Citizens Bancshares has agreed to buy pieces of Silicon Valley Bank. Meanwhile, Deutsche Bank shares are firmer today amid easing fears for that bank’s health. But geopolitics is moving closer to the front burner as Russian President Vladimir Putin announced this weekend he will station tactical nuclear weapons in Belarus.
Some beneficial precip in the Plains... Welcome rain and snow fell across the Central Plains during the weekend, lifting topsoil moisture in southern Nebraska, northwestern Kansas and northeastern Colorado. World Weather Inc. says dry areas in the southwestern Plains are unlikely to see much moisture for a while. Meanwhile, planting delays are likely over the next 10 days in the Delta and possibly in early April in some lower Midwest locations. World Weather says concerns over flooding in the Red River valley and Upper Midwest remains elevated.
China sells most of the wheat put up for auction... China sold 132,641 MT (94.3%) of the state-owned wheat reserves put up for auction last week. The average sales price was 2,733 yuan ($397.11) per metric ton, down slightly from 2,799 yuan the previous week.
The week ahead in Washington... Biden administration officials will continue to present their fiscal year 2024 spending requests to congressional panels this week ahead of lawmakers’ two-week Easter recess. This includes USDA Secretary Tom Vilsack, who will appear on Tuesday before the House Agriculture panel, Wednesday with Senate Ag Appropriations Subcommittee and Thursday with House Ag Appropriations Subcommittee appropriators. On Wednesday, President Joe Biden co-hosts the second Summit for Democracy — a virtual gathering of world leaders, civil society and private-sector leaders intended to promote democracy in the face of rising autocracies. The key economic data this week will be Friday’s personal income and expenditures for February. The core personal consumption expenditures price index is the Fed’s preferred inflation gauge. There are multiple key reports for agriculture, including Thursday’s Hogs & Pigs Report and the Prospective Plantings and Quarterly Grain Stocks Reports on Friday.
Biden urged to speed up West Coast port labor talks... A group of more than two hundred importers, exporters, logistics providers and retailers urged the White House to intervene in West Coast port labor talks that have been underway since last May. In a letter Friday to Biden, groups including the National Retail Federation, the American Trucking Associations, and the U.S. Chamber of Commerce, urged the administration to help speed the agreement on a new labor contract between the International Longshore and Warehouse Union and the Pacific Maritime Association. The group asked the White House to appoint a new point person on the talks now that Labor Secretary Marty Walsh has left his post, and to offer mediation services to the ILWU and PMA given the lack of progress to date. The request came as cargo volumes have dropped off at West Coast ports since the pandemic’s record highs, in part because retailers and importers have sought to avoid potential disruption and delays because of the labor negotiations.
Kashkari: Banking turmoil increases risk of recession... Minneapolis Fed President Neel Kashkari said recent bank turmoil has increased the risk of a U.S. recession. “What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. Would that slow down the economy? This is something that we’re monitoring very, very closely,” Kashkari, a voter on monetary policy this year, said in an interview on CBS’s Face the Nation. Before this month’s bank collapses and market turmoil, Kashkari had said the Fed should lift rates to about 5.4% — from a target range of 4.75% to 5% currently — and then hold them there until inflation cooled.
IMF urged Beijing to rebalance the economy toward consumption... The head of the International Monetary Fund (IMF) struck a positive note on China’s outlook, describing it as one of the “green shoots” in the world economy and urging authorities to rebalance the economy toward consumption. IMF Managing Director Kristalina Georgieva said the “strong rebound” in the China economy is important not only for itself, but for the world. “The robust rebound means China is set to account for around one third of global growth in 2023 — giving a welcome lift to the world economy,” Georgieva said in prepared remarks to the China Development Forum in Beijing on Sunday. IMF’s January forecast for China puts GDP growth at 5.2% this year, an increase of more than two percentage points from the 2022 rate, and driven by the anticipated rebound of private consumption as the economy reopened and activity normalized, she said.
China’s sow herd higher than target... China’s sow herd increased 1.7% in February compared with a year earlier to 43.4 million head, 5% more than the targeted capacity, state media reported. However, that was down 0.6% from January.
Wholesale beef still sputtering... Choice boxed beef prices fell $2.90 on Friday and movement slowed to 108 loads. Seasonally, the wholesale beef market should begin to strengthen soon as Lent is nearing an end and the grilling season is just around the corner. Plus, beef supplies continue to tighten as market-ready numbers shrink and carcass weights are well under year-ago.
Slide in cash hog index continues... The CME lean hog index is down 40 cents to $76.99 (as of March 23). That marks the fifth straight daily decline totaling $3.02 from the recent peak. After strong corrective gains last Friday, April lean hog futures finished 18 1/2 cents above today’s cash quote.
Weekend 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 www.profarmer.com.
Today’s reports
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Oil Crops Yearbook — ERS
- 2:00 p.m. Peanut Stocks and Processing — NASS