First Thing Today | Aug. 13, 2021
Friendly USDA data lifts corn, soybean and wheat… Corn futures are 4 to 6 cents higher, while soybean futures are up 13 to 20 cents. Winter and spring wheat futures are 10 to 14 cents higher. The U.S. dollar index is under pressure; crude oil futures are down slightly.
Argentine exchange expects soybean plantings to slide for sixth year in a row… The Rosario Grains Exchange forecasts soybean production will rebound to 49 MMT in 2021-22, a 4-MMT jump from this year’s drought-clipped crop. The exchange expects soybeans to lose acres to corn, with bean plantings expected to slide 3% to 16.4 million hectares (40.5 million acres), which would be the smallest area planted to the oilseed since 2006-07. The exchange expects Argentine producers to expand corn plantings by 6% to 6.8 million hectares (16.9 million acres), lifting the country’s 2021-22 corn crop to 55 MMT. Also of note, the Rosario exchange lowered its 2021-22 wheat harvest forecast by 400,000 MT to 20.1 MMT. USDA projected Argentina’s wheat crop would total 20.5 MMT yesterday.
Russian tax on wheat exports edges lower… Russia has set its duty on wheat exports Aug. 18-24 at $30.40 per metric ton, a 60-cent retreat from the week prior and a buck under where the duty started the month. The formula-based tax was launched in June as part of the country’s effort to ensure adequate domestic supplies and tame food inflation.
Sunny weather should speed along French wheat harvest… French farmers had harvested 72% of their soft wheat crop as of Aug. 9, just a six-point gain from the week prior as rains continued to slow efforts, reports the French farm office. Soggy late-season weather has also raised quality concerns. Drier weather moved in midway through this week and is expected to help accelerate efforts. Harvest lags the five-year average pace by 11 days.
Uptick in demand at Chinese auctions of state corn reserves… China sold nearly 123,600 MT of imported the GM corn at its latest auction of state reserves. That represented 47% of the grain put up for auction, a notable improvement from recent poor showings. The state stockpiler also sold all of the roughly 36,800 MT of imported non-GMO corn from Ukraine it put up for auction.
Cotton AWP moves higher… The Adjusted World Price (AWP) for cotton moved up to 76.74 cents per pound, effective today, marking nine straight weeks of being at 70 cents or more. Meanwhile, USDA announced Special Import Quota #17 would be established Aug. 19 for 55,262 bales of upland cotton, applying to supplies purchased not later than Nov. 16 and entered into the U.S. not later than Feb. 14.
Shipping disruptions continue… A key Chinese terminal at the Ningbo-Zhoushan port — one of the world’s busiest by container volumes — was closed indefinitely Thursday after just one worker was diagnosed with Covid-19. This is just the latest example of the unpredictable bumps coming from China. It will add to supply-chain disruptions such as the global microchip shortage, and Beijing’s proclaimed zero-tolerance on the virus could lead to other similar decisions. Meanwhile, the hub of Los Angeles is already bracing for another potential decline in traffic from China. The resulting delays could also add to the price of container shipping, which is already up more than 220% this year.
Moderate Democrats pressure Pelosi to take up physical infrastructure package… Nine moderate House Democrats will send a letter today to House Speaker Nancy Pelosi (D-Calif.) warning they will not vote for the budget resolution until the House has voted on and approved the bipartisan infrastructure package approved this week by the Senate. Pelosi has pledged she will not bring the physical infrastructure package up in the House until the Senate has sent over the “social” infrastructure package. If the nine withhold their support for the budget resolution that the House was set to consider the week of Aug. 23, that would prevent the measure from moving forward. Democrats have just a three-seat margin in the House.
Climate farming bill hits House hurdles... Legislation that aims to boost climate-friendly farming practices is getting bogged down amid opposition in the House and questions over how USDA would carry out its mandates. The Growing Climate Solutions Act, which would reward agricultural practices that sequester carbon, breezed to passage in the Senate in June. Supporters, including agriculture and environmental groups, billed it as a way to help farmers’ bottom lines while cutting greenhouse gas emissions from agriculture. But Republicans in the House oppose the idea of federal intervention in carbon markets, while progressive Democrats fret over a boon for big industrial operations.
Census shows second lowest population growth on record, with white population declining… The white population saw a historic decline, a census report revealed Thursday, with growing numbers of Latino, Asian and multiracial resident, beginning a push to redraw the nation’s political map. The results will lock in the political map until the 2030 census and, more immediately, set the stage for next year’s battle for control of the U.S. House of Representatives. With Democrats holding a narrow margin in the House, some analysts expect that Republicans could pick up enough seats just through partisan gerrymandering to win the majority in 2022. White people remained the largest racial or ethnic group in the nation at 57.8% of the total. But there were more than 5 million fewer white people than there had been 10 years ago, marking the first time on record that their overall population shrank. The nation’s population grew just 7.4% during the decade, the second slowest on record for a decennial census. Only the 1930s (the era of the Great Depression) saw slower growth.
Home prices surged in almost every corner of the U.S. in the second quarter… Robust demand continued to overwhelm the supply of homes for sale. The median sales price for single-family existing homes was higher in the second quarter compared with a year ago for 182 of the 183 metro areas tracked by the National Association of Realtors, the association said Thursday. In 94% of those metro areas, median prices rose by more than 10% from a year earlier.
U.S. ITC to hold vote on preliminary vote on Russia, Trinidad and Tobago fertilizer investigation… The U.S. International Trade Commission (ITC) is scheduled to hold a preliminary vote today on whether imports of urea ammonium nitrate (UAN) from Russia and Trinidad and Tobago are materially injuring or threatening material injury to a U.S. industry. If the ITC makes a negative finding regarding a specific country, then the antidumping and countervailing duty investigations would end. Otherwise, the investigations would continue. Commerce is to reach its preliminary determination Aug. 16.
BRF posts Q2 loss… Brazilian meat processor BRF reported a net loss of 240 million reais ($45.7 million) for the second quarter, with high grain prices and lingering impacts of the Covid-19 pandemic weighing. The pork and chicken processor is more reliant on Brazil’s market than rivals Tyson Foods and JBS SA, both of whom reported strong earnings earlier this week thanks to strong sales in the U.S.
Impressive beef rally continues… Choice boxed beef values soared $7.13 yesterday to $317.93 per cwt. and Select climbed $2.32 to $290.31 per cwt., with movement slowing to 97 loads. Increasingly large price gains for Choice values could choke off movement and put in a top. The outsized gains for Choice beef have also widened its premium to Select to $27.62. Beef prices have climbed for 16 consecutive days. Meanwhile, cash cattle prices climbed to $125 in Kansas yesterday, after starting the week at $121, but volume was light. Iowa trade set back to $124 after $126 action earlier in the week. But again, volume was light. Nebraska trade picked up from $123 to mostly $124.50.
Hogs hold up in face of disappointing export news… Lean hog futures climbed for a second day on Thursday amid a technical-based rebound after its dive to six-week lows earlier in the week. Export news was disappointing for the lean hog market yesterday, with sales slumping to 14,600 MT the week ended Aug. 5, down 48% from the prior four-week average. USDA also lowered its pork export forecast for both 2021 and 2020, though both figures are still expected to be up from 2020. USDA cited “recent trade data and continued slower demand growth from Asia,” for the cut. The pork cutout value dropped $4.59 yesterday and movement slowed to 279.43 loads.
Overnight demand news… There is no business to report.
Today’s reports
- 11:00 a.m. Feed Grains Database — ERS
- 1:00 p.m. Weekly Red Meat Production Report — AMS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Season Average Price Forecasts — ERS
- 2:00 p.m. Wheat Data — ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Turkey Hatchery — NASS
- 2:30 p.m. Commitments of Traders Report — CFTC
