Good morning!
Grains firmer overnight... Wheat futures led followthrough buying in the grain and soy markets during the overnight session. As of 6:30 a.m. CT, corn futures are trading mostly 4 cents higher, soybeans are 7 to 8 cents higher and wheat is mostly 8 to 10 cents higher. Front-month crude oil futures are around $1.25 higher and the U.S. dollar index is trading just above unchanged.
September crop reports out later this morning... USDA will update its corn and soybean crop estimates at 11:00 a.m. CT, which will include its first objective field data. Analysts expect little change to those crop estimates from the initial forecasts last month, with the average pre-report estimates at 15.076 billion bu. for corn (15.147 billion bu. in August) and 4.589 billion bu. for soybeans (unchanged from August). Analysts expect slightly smaller corn and soybean ending stocks estimates for 2023-24. For 2024-25, projected ending stocks are expected to decline for corn and wheat, while a modest increase is anticipated for soybeans.
Francine slams through Louisiana Gulf Coast, weakens as it moves through the Delta... Hurricane Francine weakened after slamming into the coast of southern Louisiana on Wednesday evening, taking a slightly more easterly route than previously expected. As of early this morning, U.S. National Hurricane Center downgraded Francine to a tropical storm and said it could be downgraded further to a tropical depression by late today. Heavy rains are expected across the Delta and Southeast, with some of the rainfall likely to move into the southeastern Corn Belt by Friday. Several port locations have been shuttered with Port Fourchon, Louisiana, closed to vessel traffic along with ports of New Orleans, Plaquemines, Cameron, Lake Charles and Houma. Barges traffic has also been interrupted, with Mike Steenhoek of the Soy Transportation Coalition noting that companies are not sending barge flotillas into the region until the storm has passed.
Weekly Export Sales Report out this morning... For the week ended Sept. 5, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | (50,000)-50,000 | (173,097) | 700,000-1,600,000 | 1,822,479 |
Wheat | NA | NA | 300,000-550,000 | 340,032 |
Soybeans | (100,000)-0 | (227,961) | 900,000-1,600,000 | 1,658,699 |
Soymeal | 0-100,000 | 40,897 | 200,000-550,000 | 434,708 |
Soyoil | 0-10,000 | 1,922 | 0-10,000 | 3,298 |
China again raises 2023-24 soybean import forecast... China’s ag ministry raised the country’s 2023-24 (Oct.-Sept.) soybean import forecast by 3.92 MMT to 102.29 MMT, as declining global prices boosted demand. The ministry raised its 2023-24 soy crush forecast by 1.35 MMT to 97.5 MMT. In the last two months, the ministry raised the import forecast a total of 6.19 MMT and now sees soybean arrivals topping year-ago by 4.79 MMT. The ministry made no changes to its 2024-25 production or import forecasts for soybeans or corn. It expects 2024-25 soybean imports to decline 7.69 MMT (7.5%) to 94.6 MMT, while corn imports are projected to plunge 10 MMT (43.5%) to 13 MMT.
Firm forecasts EU wheat production at 12-year low... Strategie Grains cut its forecast for soft wheat production in the European Union by 2.1 MMT to a 12-year low of 114.4 MMT due to rain-hit harvests in top producers France and Germany. For France, the EU’s biggest wheat grower, the consultancy reduced its crop estimate by 600,000 MT to 25 MMT, the smallest since 1983. Strategie Grains also cut its EU corn production forecast by 2.1 MMT to 57.9 MMT as drought persisted in eastern areas of the bloc.
Ukraine farmers group sees corn production lower than ag ministry... The Ukrainian Agrarian Council says Ukraine’s corn production could more than the ag ministry forecasts. The head of the farmers union said production could be as much as 8 MMT to 9 MMT below last year’s crop of more than 31 MMT, which would be well below the ag ministry’s forecast of no less than 25 MMT. The main reason for the expected drop is extremely high temperatures that hit all of Ukraine since pollination.
Argentine farmers to plant more soybeans instead of corn... Argentine farmers are expected to plant more soybeans for 2024-25 as corn faces concerns with dry weather and fears of disease carried by the leafhopper insect, the Rosario Grain Exchange said. The exchange forecasts soybean planted area at 17.7 million hectares, up 7.5% from last year, which would likely produce a crop of 52 MMT to 53 MMT. Corn plantings could fall 21% to 8 million hectares, which would project a crop of 51 MMT to 52 MMT.
India’s refiners shift to soyoil instead of palm oil... India’s palm oil imports fell 26% in August from July to 797,482 MT, the Solvent Extractors’ Association of India (SEA) said. Imports of soyoil rose 16% to 454,639 MT, while sunflower oil imports fell 22.5% to 284,108 MT, it said. The drop in imports of palm and sunflower oils lowered the country’s total edible oil imports by 17% to 1.53 MMT.
Scott lays out options for farm bill... House Ag ranking member David Scott (D-Ga.) wrote a letter to rank-and-file members on options to pass a farm bill. Scott suggested considering a two-year ad hoc package to bolster the farm safety net for 2024 and 2025 crop years if a new farm bill can’t pass this year. Some agriculture groups are pushing for such an ad hoc package, along with a one-year farm bill extension, likely through the appropriations process. Agriculture groups argue that another extension would leave farmers with an outdated safety net not reflective of current economic conditions. House Ag Chair Glenn “GT” Thompson (R-Pa.) has opposed Speaker Mike Johnson’s (R-La.) plan to attach a farm bill extension to a continuing resolution (CR), according to Scott’s letter. Thompson believes there is still a path to passing a full five-year farm bill this year, signaling confidence in achieving a bipartisan agreement before the end of Congress. Scott suggested the bill could be tied to must-pass legislation like the National Defense Authorization Act or a year-end omnibus and emphasized that any final bill must be bipartisan to pass through the Democratic Senate and White House.
EA cuts oil demand growth forecast on China slowdown... The International Energy Agency (IEA) cut its 2024 oil demand growth forecast by 70,000 barrels per day (bpd), or 7.2%, to 900,000 bpd, citing a slowdown in Chinese demand as the main driver. IEA left its 2025 demand growth forecast unchanged at 950,000 bpd but suggested the global oil market could be oversupplied next year if the wider OPEC+ producer group proceeds with its plan to unwind voluntary output cuts.
China to cut rates on $5 trillion mortgages... China is poised to cut interest rates on more than $5 trillion of outstanding mortgages as early as this month, people familiar with the matter told Bloomberg. Beijing is accelerating actions to reduce the borrowing costs for millions of families to spur consumption in an attempt to boost its flagging economy. Some banks are making final preparations for the upcoming adjustments on mortgage rates, which could be up to a 50-basis-point immediate rate reduction.
China asks its carmakers to keep key EV technology at home... China has strongly advised its carmakers to make sure advanced electric vehicle technology stays in the country, people familiar with the matter told Bloomberg, even as they build factories around the world to escape punitive tariffs on Chinese exports. Beijing is encouraging Chinese automakers to export so-called knock-down kits to their foreign plants, the people said, meaning key parts of a vehicle would be produced domestically and then sent for final assembly in their destination market. China’s commerce ministry held a meeting in July with more than a dozen automakers, who were also told they shouldn’t make any auto-related investments in India, the people said.
Feedlots passing on weaker cash cattle bids... Feedlots in the Southern Plains reportedly passed on $1.00 lower bids from packers on Wednesday, sparking speculation the six-week drop in cash cattle prices may be coming to an end. Packers have solidified margins in the black with the string of lower cash prices, giving them some room to raise bids if needed.
Seasonal slide continues for hog/pork fundamentals... The CME lean hog index is down another dime to $85.46 as of Sept. 10, the lowest level since April 2. The pork cutout dropped $1.89 to $92.91 on Wednesday, the lowest since March 21.
Overnight demand news... Egypt purchased 430,000 MT of Russian 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. Crop Production — NASS
· 11:00 a.m. WASDE — WAOB
· 11:00 a.m. Cotton Ginnings — NASS
· 11:15 a.m. Cotton: World Markets and Trade — FAS
· 11:15 a.m. Grains: World Markets and Trade — FAS
· 11:15 a.m. Oilseeds: World Markets and Trade — FAS
· 11:15 a.m. World Agricultural Production — FAS