First Thing Today | March 28, 2024

Good morning!

Grains quiet overnight trade... Corn, soybeans and wheat traded in narrow ranges during the overnight session ahead of USDA’s reports later this morning. As of 6:30 a.m. CT, corn futures are trading steady to fractionally higher, soybeans are 3 to 4 cents lower and wheat futures are fractionally to 2 cents higher. Front-month crude oil futures are more than $1.00 higher and the U.S. dollar index is up nearly 200 points this morning.

Good Friday schedule... Grain and livestock markets are closed for Good Friday, so there will be no Pro Farmer updates on March 29. Government offices are open, though there are no USDA reports. Pro Farmer wishes everyone a blessed Easter!

March planting intentions, grain stocks data out later this morning... USDA will release its Prospective Plantings and Quarterly Grain Stocks Reports at 11:00 a.m. CT. Much of the pre-report attention is on planting intentions, but quarterly stocks have proven to be strongly market-moving, especially for corn. For planting intentions, analysts expect: corn at 91.776 million acres; soybeans at 86.530 million acres; all wheat at 47.330 million acres, including 34.870 million acres of winter wheat, 10.891 million acres of other spring wheat and 1.652 million acres of durum; and cotton at 10.906 million acres. Analysts expect March 1 stocks of 8.427 billion bu. for corn, 1.828 billion bu. for soybeans and 1.044 billion bu. for wheat.

Weekly Export Sales Report out this morning... For the week ended March 21, traders expect:

Baltimore bridge collapse update... Federal officials told Maryland lawmakers that replacing the Francis Scott Key Bridge in Baltimore would cost at least $2 billion, according to Bloomberg, citing a person familiar with the matter. President Joe Biden said on Tuesday the federal government should pay for the rebuild and he’d work with Congress on it. Debris from the collapsed bridge is blocking the shipping channel connecting the port to the Chesapeake Bay and the Atlantic Ocean. Remains of the bridge must be cleared before the port can restart operations, which experts say could take months. There is a difference of opinion as to whether shipping through a cleared channel will be halted during reconstruction of the bridge. Some predict intermittent stoppages. But transportation analyst Ken Ericksen of Polaris Analytics and Consulting says: “There may be limited transits or restrictions during certain hours, but one stipulation is that trade cannot be disrupted. All Maryland elected officials and DOT Secretary Pete Buttigieg have essentially said navigation is too important not only for the Baltimore area but for the United States.”

EU forecasts 2024 wheat production falling to four-year low... In its first projections for 2024-25, the European Commission projected EU soft wheat production at 120.8 MMT, down nearly 4% from the previous crop and the lowest level since 2020-21. The commission estimated soft wheat area in the EU at 20.95 million hectares, down from 21.75 million in 2023-24, while the average yield was projected unchanged from this season at 6 metric tons per hectare. EU soft wheat exports in 2024-25 were pegged at 31 MMT, unchanged from the volume expected in the current marketing year.

Malaysia to request more rice supplies from India... Malaysia will submit a request to India to procure an additional 500,000 MT of white rice, its agriculture minister said. The request would be in addition to the 170,000 MT of white rice India has previously allocated to Malaysia for this year.

Indonesia to double replanting subsidy... Indonesia aims to double subsidies for palm tree replanting to 60 million rupiah ($3,785.49) per hectare from May to boost farmers’ participation, Chief Economic Minister Airlangga Hartarto said. The government aims to get 180,000 hectares (444,790 acres) of smallholders’ plantations replanted every year, but the program has been lagging due to administrative hurdles and farmers’ concerns over loss of income while they wait for the trees to mature. Only 331,000 hectares have been approved for replanting so far, of the total 2.5 million hectares targeted.

Yen on intervention watch... Japanese officials held an emergency meeting to discuss the weak yen and suggested they were ready to intervene to stop what they described as disorderly and speculative moves in the currency. In a sign of growing urgency to put a floor under the yen after the currency fell to a 34-year low against the U.S. dollar, the Bank of Japan (BOJ), the Finance Ministry and Japan’s Financial Services Agency held a meeting. In a briefing afterwards, top currency diplomat Masato Kanda said he “won’t rule out any steps to respond to disorderly FX moves.” Kanda also said BOJ would respond through monetary policy if currency moves affected the economy and price trends.

Data confirms UK economy fell into recession to end 2023... Britain’s economy entered a shallow recession last year, the final estimate of 2023 GDP data confirmed. The British economy contracted 0.2% annually in the fourth quarter of 2023, marking its first shrinkage since the 2020-21 recession, primarily driven by high inflation, soaring borrowing costs and sluggish external demand. For all of 2023, the UK economy expanded only 0.1%, marking the weakest annual growth since the 2009 financial crisis, excluding the pandemic-hit year of 2020.

Euro zone bank lending stagnates... Bank lending to euro zone companies and households continued to stagnate in February, with high interest rates likely to have discouraged borrowers as well as lenders, European Central Bank data showed. Bank lending to households in the euro zone increased 0.3% from year-ago to 6.87 trillion euros in February, the same pace as the previous month and the slowest rate since March 2015. Lending to companies rose 0.4% from year-ago to 5.13 trillion euros, after a 0.2% increase in January.

U.S. hog herd expected to be virtually unchanged... Analysts expect this afternoon’s Hogs & Pigs Report to show the U.S. hog herd was virtually the same size as year-ago at 74.136 million head as of March 1. The breeding herd is expected to be down 3.5%, while the market hog inventory is anticipated to be up 0.3% from last year. The winter pig crop is expected to be up 1.4% amid a 3.4% jump in pigs per litter. Spring and summer farrowing intentions are anticipated to be down 2.3% and 2.2%, respectively.

Signs of a top in wholesale beef... Wholesale beef prices dropped $2.51 for Choice and $1.83 for Select on Wednesday. Choice beef has declined $5.15 since March 21, suggesting a short-term top is in place. Given recent heavy pressure on cattle futures and wholesale beef values, cash cattle prices will likely be down notably from last week’s all-time high.

Bigger moves in cash hog index, pork cutout... The CME lean hog index increased another 56 cents to $84.25 as of March 26, the biggest daily gain since Feb. 21 and the highest level since Oct. 3, 2023. The pork cutout value dropped $1.27 on Wednesday, the largest daily decline since March 5. Despite yesterday’s drop, the pork cutout value remains on its seasonal climb.

Overnight demand news... South Korea bought 134,000 MT of corn via two separate tenders, with all of the purchases expected to be sourced from South America or South Africa. Saudi Arabia tendered to buy 595,000 MT of optional origin milling wheat.

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

• 7:30 a.m. Weekly Export Sales — FAS
• 11:00 a.m. Grain Stocks — NASS
• 11:00 a.m. Prospective Plantings — NASS
• 11:00 a.m. Rice Stocks — NASS
• 2:00 p.m. Fruit and Tree Nuts Outlook: March 2024 — ERS
• 2:00 p.m. Rice Yearbook — ERS
• 2:00 p.m. Agricultural Prices — NASS
• 2:00 p.m. Egg Products — NASS
• 2:00 p.m. Hogs and Pigs — NASS
• 2:00 p.m. Peanut Prices — NASS