First Thing Today | May 9, 2022

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Good morning!

Wheat firmer, corn and soybeans weaker to start the week... Wheat futures extended last week’s gains overnight amid crop concerns, while the corn and soybean markets were pressured by improved weather. As of 6:30 a.m. CT, wheat futures are trading 12 to 21 cents higher, corn is 8 to 10 cents lower and soybeans are 10 to 13 cents lower. Front-month U.S. crude oil futures are more than $2.50 lower and the U.S. dollar index is around 150 points higher this morning.

Improved weather for many major U.S. crop areas... Warmer, drier weather is forecast across much of the Corn Belt, Delta and Southeast this week, according to World Weather Inc. The exception will be far northern areas of the country, with frequent rain expected across the upper Midwest and Northern Plains. Periodic rains are forecast for some HRW and cotton areas of the Southern and Central Plains. Meanwhile, World Weather says Brazil’s safrinha corn crop in Mato Grosso and Goias is no longer expected to receive significant precipitation during the next ten days.

Russia/Ukraine update... The U.S. announced new sanctions on Russia yesterday, cutting off Kremlin-controlled media outlets from American advertisers and prohibiting the country from using U.S.-provided management and accounting consulting services, according to a senior administration official and a White House fact sheet. Meanwhile, the U.S. announced it would sanction executives of Gazprombank for the first time but it is not freezing assets or prohibiting transactions with the bank. The EU has so far not disconnected the lender, a subsidiary of Gazprom, from the SWIFT international payments system. President Joe Biden on Friday announced another security assistance package for Ukraine totaling $150 million he said would include artillery munitions, radars and other equipment.

China’s soybean imports rise in April... China imported 8.1 MMT of soybeans last month, up 27.2% from March and 8.5% more than April 2021, as delayed shipments from Brazil arrived at Chinese ports. Through the first four months of 2022, China imported 28.4 MMT of soybeans, down 0.8% from the same period last year. China-based consultancy Mysteel expects China’s soybean imports this month to climb to about 9.4 MMT.  

China’s export growth slows in April amid Covid lockdowns... China’s exports grew 3.9% in April from a year earlier, dropping sharply from the 14.7% growth reported in March and the slowest pace since June 2020. Imports were the same as last year, improving a tick from the 0.1% decline in March. China posted a trade surplus of $51.1 billion in April, up from $47.4 billion in March. China’s trade surplus with the U.S. increased by 14.7% versus year-ago to $32.2 billion, up from $32.1 billion in March.

China to step up economic support... China’s central bank said on Monday it would step up support for the real economy, while closely watching domestic inflation and monitoring policy adjustments by developed economies. The People’s Bank of China (PBOC) will keep liquidity reasonably ample, prioritize stability and take steps to boost confidence, the bank said in its first-quarter monetary policy implementation report. Beijing will keep its economic operations within reasonable range, the central bank said, adding that it will not resort to flood-like stimulus and will not use property as short-term stimulus for economy.

Ukraine spring planting ‘active’ despite war... Ukraine has sown about 7 million hectares of spring crops so far this year, 25% to 30% less than in the corresponding period in 2021, according to the country’s ag minister. He says, “The sowing campaign is going on actively despite the difficulties associated primarily with logistics.” He noted the sowing this year was not of the same quality as last year and the planted area for corn was smaller. The ag minister says the country exported nearly 1.1 MMT of grain in April. He highlighted the importance of exports of Ukrainian grain via Romania while Russia is blockading Ukrainian ports but said those exports could be complicated in two months by exports of the new wheat crop in Romania and Bulgaria. Ukraine reportedly is in talks with Poland and Lithuania to export its summer grain harvest through their ports.

The week ahead in Washington... House and Senate lawmakers are both in with the focus on additional Ukraine aid, which may include ag-related provisions seeking to boost wheat and soybean plantings, and Cabinet members testifying on the Biden administration’s fiscal year 2023 budget requests, including USDA Secretary Tom Vilsack on Tuesday. EPA and the Army Corps of Engineers on Monday will hold the first of several roundtables on the Biden administration’s plans to rewrite the Waters of the U.S. (WOTUS) rule via the Clean Water Act. The key economic report this week comes Wednesday, with the release of the Consumer Price Index, which is expected to show a decrease in the year-over-year inflation rate to 8.1% from 8.5%. The highlight for ag will be Thursday’s Supply & Demand Report that will feature the first official look at the 2022-23 balance sheets, in addition to changes to the old-crop usage forecasts. The big question with corn is whether USDA lowers its yield to reflect the slow planting pace as of May 1 — a rare occurrence in the past. There are major uncertainties with harvested acres and yield in USDA’s first U.S. winter wheat crop estimate. Globally, focus will be on how much more “Ukraine factor” is added to the old-crop grain and oilseed balance sheets and the new-crop assumptions for both Ukraine and Russia.

Producers frustrated over lack of WHIP+ details for eligible 2020 and 2021 commodities... USDA Secretary Tom Vilsack appears Tuesday before a Senate Ag Appropriations Subcommittee on USDA’s fiscal year 2023 budget. Vilsack usually has some updated policy news whenever he appears before a congressional panel. And that is what producers want relative to WHIP+ (expected to be renamed). Vilsack has frequently said details would come in May so some news is expected, hopefully including when payments will be issued. WHIP+ livestock details have already been unveiled and will take place in two tranches, something also expected for eligible commodities.

High-stakes port contract negotiations... West Coast dockworkers and cargo-handling companies are due this week to begin contract negotiations that carry high stakes for the American economy. The labor talks cover about 22,400 workers at 29 ports, including the big Southern California facilities that make up the country’s busiest gateway for imported goods. The Wall Street Journal (WSJ) reports similar negotiations have been long and contentious in previous years, leading to extensive disruptions and delays in the flow of goods. WSJ says the risks “have seldom been as high as they are this year, two years into a supply-chain crunch that was brought on by the Covid-19 pandemic and that has strained factory production, hobbled retail sales and helped push inflation to a 40-year high.”

China’s meat imports plunge in April... China imported 592,000 MT of meat in April, down nearly 36% from last year. China’s preliminary trade data doesn’t break down meat imports by category, but the sharp reduction was due to significantly lower pork arrivals. Through the first four months of this year, imports at nearly 2.3 MMT also fell 36% from the same period last year.

Cattle bulls must defend support... Friday’s price action left live cattle futures just above key support – levels bulls must defend early this week to avoid chart-based selling. Fundamentally, the cash market remains strong, though that will likely end soon, while packers are struggling to get retailers to pay up for beef at a time when they should be gearing up for grilling-season features.

Hog traders maintain pessimistic attitudes... Hog futures finished poorly Friday amid recent weakening of the cash index and concerns about impacts to pork demand given potential economic impacts from what looks like an extended battle by the Fed to contain inflation. While the market should strengthen seasonally as slaughter supplies decline, there are likely enough headwinds to keep bulls contained until the cash index shows solid strength.

Weekend demand news... South Korea purchased 65,000 MT of corn likely to be sourced from South America.

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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