Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, May corn was down 1 cent. May soybeans were steady. May soybean meal was up $5.50 and hit a two-week high. May bean oil was 60 points lower. May SRW wheat was down 3 3/4 cents and May HRW was 2 1/2 cents lower. Soybean meal was the standout performer overnight as it appears spreaders are starting to unwind their long bean oil, short meal spreads. May soybean meal is poised for a technically bullish weekly high close today, while also seeing a bullish upside price breakout from its recent sideways trading range. Corn futures are weighed down late this week by the slumping winter wheat futures markets that are hovering near their five-week lows scored on Thursday. The key outside markets see Nymex WTI crude higher and trading around $98.00 a barrel. The U.S. dollar index is slightly down. The yield on the benchmark 10-year U.S. Treasury note is presently 4.3 percent.
Latest on the war in the Middle East…
--Ceasefire agreement between U.S. and Iran appears to be largely holding
--U.S. and Iranian delegations are set to meet in Pakistan on Saturday
--Israeli strikes into Lebanon continued, as did Hezbollah’s rocket volleys across border
--Trump demands reopening of Strait of Hormuz ahead of U.S.-Iran peace talks
--Russian-flagged tanker transits Hormuz into Persian Gulf in rare passage
--Trump warns Iran not to charge fees for ships transiting Hormuz
President Trump demanded Iran reopen the Strait of Hormuz while Israel and Hezbollah exchanged fire, complicating upcoming talks aimed at turning a fragile ceasefire into lasting peace. The truce announced on Tuesday remains shaky, with Kuwait reporting large-scale drone attacks on “vital” facilities overnight and accusing Iran and its proxy groups of violating the terms of the agreement. There were no further reports of strikes on Friday, said a Bloomberg report. Meantime, Israel continued to target towns in south Lebanon, where its parallel campaign against Tehran-backed Hezbollah threatens to undermine negotiations. Hezbollah said it launched drones and rocket salvos toward Israel, while Israeli medics reported treating several people injured while rushing to shelters in central and southern Israel. U.S. and Iranian delegations are set to meet in Pakistan on Saturday, with shipping through Hormuz — which handled about a fifth of the world’s oil and liquefied natural gas before the war — a central sticking point. Vice President JD Vance is expected to lead the U.S. delegation in discussions scheduled for Islamabad, Pakistan’s capital.
Stormy weekend in the Plains, Midwest … The National Weather Service today said a warming trend is forecast to accompany inclement weather through the interior western
U.S. during the weekend. Scattered strong to severe thunderstorms with heavy rain early today across the Midwest will shift focus into the southern High Plains later on Saturday as moisture from the Gulf enters the southern Plains. The thunderstorms are expected to be stronger and could become severe later on Saturday across the southern High Plains. The potential severe weather should advance farther east across the rest of the southern Plains into Sunday morning. Meanwhile, rain and embedded strong thunderstorms should also be expanding across the upper Midwest Saturday night into Sunday morning ahead of a warm front.
U.S. consumer price index on deck today… The U.S. consumer price index report for March comes out this morning. The CPI is seen coming in at up 0.9%, month on month, with the core CPI reading (minus food and energy) seen up 0.3%. Year-on-year, CPI is expected up 3.3% and the core reading up 2.7%. Thursday’s core PCE price index, which is the Federal Reserve’s preferred gauge of underlying inflation, rose by 0.4% from the previous month in February, sustaining the 10-month high recorded over the previous two months. Those numbers came out in line with the market expectations. From the previous year, the core PCE price index rose by 3%, down from 3.1% in the prior month and remaining well above the Federal Reserve’s 2% annual inflation target.
ConocoPhillips mulls return to Venezuela to drill for oil… ConocoPhillips has dispatched a team to Venezuela to evaluate the prospects for a return to drilling in the oil-rich Caribbean nation almost two decades after billions of dollars in assets were seized by the socialist regime, Bloomberg reported. “The undertaking makes ConocoPhillips just the second major U.S. oil company to publicly disclose an on-the-ground inspection in Venezuela, home to some of the world’s biggest crude reserves. The purpose of the trip is to ‘better understand the potential for in-country oil and gas opportunities,’ Dennis Nuss, a spokesman, said in a statement on Thursday. ‘We will evaluate Venezuela against other international opportunities as part of our disciplined investment framework,’ “ he said and as reported by Bloomberg. Exxon Mobil Corp. quit the country after asset seizures by the late dictator Hugo Chavez. “Rebuilding Venezuelan oil output to 3 million barrels a day would require ‘probably hundreds of millions of dollars’ over a long time horizon, Dan Ammann, upstream president at Exxon, said during the CERAWeek by S&P Global conference in Houston last month,” said the report.
Top Ukraine negotiator says progress made on peace deal with Russia… Ukraine’s top negotiator with Russia said he sees progress toward a potential peace deal with the Kremlin, adding that a resolution to the war may not take long to achieve, Bloomberg reports. “While negotiations to end Europe’s bloodiest conflict since World War II have publicly yielded few results, Kyrylo Budanov expressed optimism that the talks are evolving toward a settlement. Ukraine’s former top military spy said he believes Russia also wants to stop the war,” said the report. “They all understand the war needs to end. That’s why they are negotiating,” Budanov said in an April 4 interview with Bloomberg. “I don’t think it will be long.”
Head of Cargill world trading leaving the firm… Alex Sanfeliu, head of world trading at Cargill Inc., is leaving the company after three decades for another opportunity. Sanfeliu led a team handling trading in commodities such as corn, wheat, and soybeans, and has held several roles in his 30 years at Cargill. Cargill has been restructuring its business, cutting the number of business units and announcing job cuts, with several executives also retiring or changing roles, said Bloomberg. Geneva-based Sanfeliu, who started at as a junior trader at Cargill in 1995, is departing for another opportunity, said the people, who asked not to be identified discussing private matters. He led a team handling trading in everything from corn to wheat and soybeans. Cargill, the largest private company in the U.S. by revenue, has been restructuring its business for more than a year. The company cut the number of business units to three from five and announced 8,000 job cuts. Several executives have also retired or changed roles.
Malaysian palm oil futures weaker... Malaysian palm oil futures eased slightly, hovering below MYR 4,650 per MT after recent gains, pressured by a firmer ringgit. The benchmark contract is heading for a weekly drop of over 4%, breaking a five-week winning streak, after Malaysian Palm Oil Board monthly data showed March production rose 7.21% month-on-month to 1.38 million MT. Still, weakness was limited as palm oil inventories fell 16.14% last month to 2.27 million MT while exports surged 40.69% to 1.55 million MT. Broader edible oil markets also strengthened, with strength in Dalian and Chicago contracts, reflecting hopes of easing geopolitical tensions in Iran. In India, the top buyer, expectations of restocking ahead of stronger seasonal demand grew after imports dropped 19% to a three-month low in March. Meanwhile, Indonesia, the world’s largest grower, issued a decree outlining its biofuel mandate timeline. Traders now await fresh shipment estimates from cargo surveyors later today for more direction.
Cattle futures gain as light cash trade seen at higher levels… June live cattle on Thursday rose $1.275 to $247.20. May feeder cattle gained $2.425 to $370.425. The cattle futures markets saw more technical buying after nearby live cattle futures prices earlier this week hit a record high. Better risk appetite in the general marketplace late this week also favors the cattle market bulls. USDA at midday Thursday reported very light cash cattle trading this week, with steers averaging $245.89 and heifers $246.00. The agency on Monday reported cash cattle trading last week averaged $244.96. Recent wholesale beef price weakness and firmer cash trade continues to pressure packer margins, which are now deep in the red.
Follow-through technical selling in lean hog futures… June lean hog futures on Thursday fell $0.525 to $104.125 and hit a two-week low. The hog futures market saw some follow-through technical selling after strong losses posted Wednesday that deflated the bulls. The latest CME lean hog index is up 24 cents at $90.30. Today’s projected cash index price is down a penny at $90.29. The national direct five-day rolling average cash hog price quote Thursday was $68.26.