First Thing Today | February 14, 2024
Good morning!
Grains weaker overnight... Wheat futures led broad losses in the grain and soy complex during the overnight session as markets weakened amid technical selling and a lack of supportive news. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents lower, soybeans are 5 to 8 cents lower, winter wheat markets are 10 to 15 cents lower and spring wheat is 7 to 10 cents lower. Front-month crude oil futures are modestly firmer and the U.S. dollar index is mildly weaker.
Red Sea shipping update... An official with shipping giant Maersk told CNBC the company doesn’t expect Red sea vessel transits to resume “anytime soon.” Meanwhile, Egypt’s Suez Canal will coordinate with clients to find ways to reduce the effects of the Red Sea crisis on trade, Canal Authority Chairman Osama Rabie told the CEO of shipping giant MSC. Attacks by Yemen’s Iran-aligned Houthis on vessels in the Red Sea continue to disrupt global shipping and force firms to take longer, more costly routes.
Ukraine’s grain exports slow from year-ago... Ukraine has exported almost 2.4 MMT of grain so far this month, lower than the 2.7 MMT shipped over the same period in 2023, ag ministry data showed. Exports since the beginning of the 2023-24 marketing year on July 1 totaled 26.3 MMT, down from 29.7 MMT during the same period last year. That included 14.4 MMT of corn, 10.1 MMT of wheat and 1.5 MMT of barley.
Ukraine winter grains remain mostly favorable... Winter weather conditions have been mostly favorable for Ukrainian winter crops, APK-Inform consultancy quoted state meteorologists as saying. The forecaster said fields in most of the country’s regions had sufficient soil moisture and only some areas in the southern Kherson and Odesa regions had levels that were “less than the average long-term values.”
France raises wheat export forecast... France’s ag ministry raised the country’s 2023-24 export forecast outside of the EU by 150,000 MT to 10.25 MMT. The export outlook within the bloc was reduced 230,000 MT to 6.32 MMT.
Vilsack appears before House Ag Committee today... Look for USDA Secretary Tom Vilsack during his appearance today before the House Ag Committee to bring up certain facets of the 2022 Census of Ag report. On Tuesday, Vilsack said the report was “a wake-up call to everyone who plays a role in agriculture policy or who shares an interest in preserving a thriving rural America. We are at a pivotal moment, in which we have the opportunity to hold tight to the status quo and shrink our nation’s agriculture sector further, or we can choose a more expansive, newer model that creates more opportunity, for more farmers.”
WTO reform document lacks details on appeals process revival... A confidential document outlining reforms at the World Trade Organization (WTO) lacks specifics on how to revive the dormant appeals process. Despite being the seventh and final version of the reform proposal, the document does not provide details on an appeal mechanism to replace the defunct Appellate Body, which ceased operations in 2019 due to repeated U.S. actions blocking judge appointments. The document was presented during a special session in preparation for the 13th Ministerial Conference (MC13) scheduled for Feb. 26-29. While the document offers options for resolving trade disputes informally and establishes new deadlines for their resolution, it suggests the MC13 may still be unable to revive the appeals process at the WTO. Currently, more than 30 appeals are pending without the ability for adjudication.
UK inflation unchanged in January... The United Kingdom’s inflation rate was unchanged at 4.0% in January. Annual core inflation, minus food and energy costs, was unchanged at 5.1%. Both levels were weaker than anticipated, adding to expectations the Bank of England would cut interest rates by midyear.
Euro zone Q4 GDP confirmed up 0.1% from year-ago... The euro zone economy expanded 0.1% annually in the last three months of 2023, matching the first estimate. Among the bloc’s largest economies, GDP in Germany contracted 0.2% while France grew 0.7%, Italy expanded 0.5% and Spain jumped 2%.
Modi, UAE leader advance India-Middle East-Europe corridor despite conflict... India’s Prime Minister Narendra Modi and UAE leader Sheikh Mohammed bin Zayed Al Nahyan agreed to continue work on the India-Middle East-Europe Economic Corridor (IMEC) despite ongoing regional conflict stemming from the Israel/Hamas war. The agreement was reached during Modi’s visit to Abu Dhabi, where discussions heavily focused on the conflict in the Red Sea region. According to India’s Foreign Secretary Vinay Kwatra, both leaders have taken the initial steps to operationalize part of the IMEC. The corridor intends to increase efficiency, reduce costs, secure regional supply chains, increase trade accessibility, enhance economic cooperation, generate jobs and lower greenhouse gas emissions.
Packers slowing cattle slaughter to manage supplies... Cattle slaughter through the first two days of the week was estimated at 240,000 head, 10,000 behind last week and 8,835 lower than last year’s pace. Estimates for this week’s slaughter are just over 600,000 head as packers reduce runs in an attempt to manage supplies instead having to actively bid for cattle for a fifth straight week.
Overnight demand news... Japan tendered to buy 60,000 MT of feed wheat and 20,000 MT of feed barley. Jordan tendered to buy up to 120,000 MT of optional origin milling 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
- 9:30 a.m. Weekly ethanol production — EIA
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: February 2024 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: February 2024 — ERS
- 2:00 p.m. USDA Agricultural Projections to 2033 — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Turkey Hatchery — NASS
