First Thing Today | March 23, 2023

Good morning!

Price strength overnight... Corn futures built on Wednesday’s corrective gains overnight, while soybeans and wheat bounced after recent losses. As of 6:30 a.m. CT, corn futures are trading 2 to 6 cents higher, soybeans are 2 to 4 cents higher and wheat futures are mostly 5 to 10 cents higher. Front-month crude oil futures are around 50 cents lower and the U.S. dollar index is modestly firmer.

Weekly Export Sales Report out this morning... For the week ended March 16, traders expect:

Crushers association raises Brazil soybean crop forecast... Brazilian oilseed crushers association Abiove raised its soybean crop forecast for the country by 1 MMT to a record 153.6 MMT, citing strong yields and increased acreage. Abiove raised its 2022-23 Brazilian soybean export forecast by 300,000 MT to a record 92.3 MMT.

Two most important comments made by Powell and Yellen... Fed Chair Jerome Powell, speaking to reporters after the 25-basis-point rate hike said a rate cut isn’t in the Fed’s “base case” and noted that the recent collapse of Silicon Valley Bank likely resulted in tightening in financial conditions. Treasury Secretary Janet Yellen, meanwhile, told lawmakers regulators aren’t considering a blanket guarantee for all U.S. deposits without congressional approval.

Swiss National Bank raises interest rates... Swiss National Bank raised interest rates by 50 basis points despite the recent turmoil at Credit Suisse and in the wider banking sector. In a statement, the bank said that measures announced by Switzerland’s federal government to support Credit Suisse had “put a halt to the crisis.” It did not rule out further hikes as inflation continues to rise.

Treasury Dept. to release more Biden EV tax credit rules next week... The Biden administration is preparing to release next week several requirements to claim electric vehicle (EV) tax credits worth up to $7,500, including standards for the batteries and critical minerals that are meant to encourage more North American production and cut out supplies from China. Some foreign carmakers have complained their electric models made outside North America won’t qualify for the long-awaited incentive created by the Inflation Reduction Act. The Biden administration has been negotiating for months with automakers, foreign countries and lawmakers on the guidance.

China says U.S. should lift trade tariffs... The U.S. should lift all tariffs levied on China as soon as possible and meet in the middle on trade differences, Shu Jueting, a spokesperson for China’s commerce ministry said. Shu said China never deliberately pursued a trade surplus with the U.S. and tariffs have seriously interfered with the normal bilateral trade.

Malaysia CPO export duty remains at 8%... Malaysia raised its crude palm oil (CPO) reference price but will keep the export tax at 8%. The country calculated a reference price of 4,031.45 ringgit ($914.16) per metric ton for April, up from 3710.35 ringgit this month. The export tax structure starts at 3% for crude palm oil in a 2,250 to 2,400 ringgit-per-metric-ton range. The maximum tax rate is set at 8% when prices exceed 3,450 ringgit per metric ton.

China to resume some Brazilian beef imports... China resumed imports of Brazilian boneless beef aged under 30 months starting today, China’s customs authority announced. Sales of Brazilian beef to China were voluntarily halted by Brazilian authorities on Feb. 23, following the discovery of an atypical case of bovine spongiform encephalopathy.

Cold Storage Report out this afternoon... USDA will detail frozen meat stocks at the end of February. The five-year average is a 14.7-million-lb. decline in beef stocks and a 35.4-million-lb. rise in pork stocks during the month.

Cash cattle trade mixed... Cash cattle trade started around $1 lower in the Southern Plains on Wednesday, while trade in the northern market where market-ready supplies are tighter occurred at steady to $1 higher prices. April live cattle futures finished Wednesday nearly $2 below last week’s average cash cattle price.

Cash hog index posts another sharp drop... The CME lean hog index is down another 84 cents, marking a $2.18 drop over the past three days. Despite a sizable discount to the cash index, April lean hog futures faced pressure on Wednesday, signaling traders anticipate more near-term cash weakness.

Overnight demand news... Exporters reported no tenders or sales.

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
• 2:00 p.m. Chickens and Eggs — NASS
• 2:00 p.m. Cold Storage — NASS
• 2:00 p.m. Livestock Slaughter — NASS