First Thing Today | February 13, 2024
Good morning!
Quiet grain trade overnight... Corn, soybeans and wheat held in tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are 1 to 3 cents lower, winter wheat markets are 2 to 3 cents lower and spring wheat is mostly 3 to 5 cents lower. Front-month crude oil futures are around 45 cents higher and the U.S. dollar index is about 100 points lower.
Cordonnier cuts South American crop estimates... South American crop consultant Dr. Michael Cordonnier cut his Brazilian soybean crop estimate 2 MMT to 147 MMT, noting continued disappointing yields as harvest progresses. Cordonnier lowered his Brazilian corn crop forecast 3 MMT to 112 MMT amid lower plantings for first-crop corn and expected smaller safrinha seedings. In Argentina, he cut his soybean and corn crop forecasts 2 MMT each to 50 MMT and 54 MMT, respectively, as recent heat and dryness stressed crops in the core production area. Cordonnier still expects total South American soybean production to rise 12.2 MMT (6.1%) from last year but now forecasts corn production will fall 5.1 MMT (2.9%).
Houthi rebels fire missiles at corn cargo ship in Red Sea destined for Iran... Houthi rebels launched two missiles at a cargo ship bound for Iran in the Red Sea on Monday, causing minor damage but no injuries, according to U.S. military officials. The missiles were fired from Houthi-controlled areas in Yemen toward the MV Star Iris, a Greek-owned, Marshall Islands-flagged vessel carrying corn from Brazil to Iran. While a spokesman for the Houthi military claimed the ship was American, maritime data confirmed it as Greek-owned. This incident, the first of its kind targeting an Iranian-bound ship, saw the Houthis allegedly informing Iran beforehand.
Port of Antwerp disrupted by Belgian farmers’ protests... Operations at the port of Antwerp, one of Europe’s biggest container ports, were seriously impacted on Tuesday as hundreds of farmers on tractors blocked the roads around the port demanding looser environmental rules and better protection against cheap imports. The delays this is causing for freight handling come on top of the problems that port companies are already experiencing as attacks on vessels in the Red Sea force shipping companies to stay away from the Suez Canal and opt for longer routes instead.
Ukrainian farmers to reduce spring plantings 3.7%... Ukrainian farmers plan to reduce the sown area to spring crops by 3.7% (500,000 hectares) this year, mostly by lowering the area for corn, a survey from Ukraine’s ag ministry showed. The survey said farmers plan to reduce corn plantings by 9% but could increase the area sown to sugar beets, rapeseed and soybeans, while they are still undecided on seedings of sunflowers.
France cuts wheat seedings estimate... France’s ag ministry lowered its estimate of the area sown with winter wheat by 130,000 hectares to 4.36 million hectares. That would be down 7.7% from last year’s seedings and the second lowest in the past 30 years after heavy rain disrupted planting. The ministry reduced its projection of the winter barley area to 1.27 million hectares from 1.31 million previously. That would be down 6.6% from 2023 but in line with the average of the past five years. For winter rapeseed, France’s main oilseed crop, the 2024 area was trimmed to 1.34 million hectares from 1.35 million expected in December, now 0.6% below last year but nearly 16% above the five-year average.
Ukraine considers skipping EU ag subsidies for eased green deal requirements... Ukraine is contemplating forgoing agriculture subsidies from the European Union (EU) in exchange for leniency regarding the EU Green Deal requirements. Discussions about Ukraine’s potential accession to the EU are scheduled to begin next month. To access approximately 96.5 billion euros ($103.95 billion) in subsidies under the Common Agricultural Policy (CAP) over seven years, Ukrainian farmers would need to comply with the Green Deal requirements. However, Ukrainian officials argue these requirements could hinder their business operations. They propose negotiating fewer trade and environmental restrictions for Ukrainian farmers in exchange for subsidies. Protecting the competitiveness of Ukraine’s agriculture sector is a priority in these negotiations. This stance suggests Ukraine’s accession to the EU may face significant challenges, particularly as previous reports hinted at potential subsidy cuts for existing EU members if Ukraine were to join, leading to farmer protests within the EU.
Senate passes foreign aid bill, House unlikely to pass in current format... The Senate early this morning passed a $95 billion foreign aid package to send money to Israel, Ukraine and Taiwan. The vote was 70-29. The bill will now go to the House, but Speaker Mike Johnson (R-La.) Monday evening issued a statement essentially saying the current Senate aid approach is dead on arrival without significant border security protection language.
Fuel retailers push Carper on year-round E15 sales... Fuel retailers are pressuring Sen. Tom Carper (D-Del.), who chairs the environment committee and is not seeking re-election, to support legislation allowing the year-round sale of gasoline blended with 15% corn ethanol (E15). They argue that such a move would promote environmentally friendly fuel, lower costs for consumers and encourage investments in lower-carbon transportation energy. These retailers claim Carper’s opposition is the main obstacle to passing such bills. They assert that allowing year-round sales of E15 would prevent disruptions, complexity and price increases in the gasoline market. However, independent refiners oppose E15 legislation and seek broader changes to the nation’s renewable fuel mandate. Carper has previously shown sympathy toward the concerns of independent refiners.
USDA’s $306 million Phase 1 ERP payments reflected in latest data... USDA’s recent announcement of approximately $306 million in final Phase 1 Emergency Relief Program (ERP) payments is evident in the program’s latest data. As of Feb. 11, a total of $8.56 billion has been disbursed under ERP, with $7.68 billion allocated to Phase 1. Prior to USDA’s announcement, Phase 1 payments totaled $7.45 billion. ERP Phase 2 payments increased slightly to $882.6 million. With USDA imposing a deadline for county office action on Phase 1 final payments by Feb. 16, it is anticipated they will rise further in the upcoming data for the week ending Feb. 18.
WHO: Low risk in China’s human case of bird flu... China on Jan. 27 reported a case involving a person infected with combined H3N2 and H10N5 strains of avian influenza. The World Health Organization says “the likelihood of human-to-human spread is considered low.”
Cattle futures pull back despite jump in cash prices... Live cattle futures faced corrective selling on Monday, despite confirmation of a $3.35 jump in the average cash cattle price to $181.15 – the highest level since the week ended Nov. 3 of last year. Cash cattle prices have firmed for four straight weeks, gaining $7.68 over that period. Given negative margins and recent big purchases, packers will try to slow play cash cattle negotiations this week and reduce kills as they attempt to manage supplies without actively raising bids again this week.
Cash hogs, pork cutout firm... The CME lean hog index is up a dime to $73.70 as of Feb. 9, snapping a two-day skid. Wholesale pork prices rebounded from last week’s losses with a $2.57 gain on Monday, led by more than $5.00 gains in bellies and hams, moving the cutout back into the upper-$80.00 range.
Overnight demand news... South Korea purchased 68,000 MT of corn expected to be sourced from South America or South Africa. Jordan purchased 60,000 MT of optional origin hard milling wheat. Algeria tendered to buy up to 160,000 MT of Brazilian or Argentine corn and 35,000 MT of optional origin soymeal. Japan is seeking 115,035 MT of milling wheat in its weekly tender.
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
- 11:00 a.m. Feed Grains: Yearbook Tables — ERS
- 11:00 a.m. Meat Price Spreads — ERS
- 11:00 a.m. 2022 Census of Agriculture — NASS
- 2:00 p.m. Dairy Monthly Tables and Dairy Quarterly Data — ERS
- 2:00 p.m. Farm Numbers and Land in Farms - Statistical Bulletin — NASS
