First Thing Today | February 16, 2024
Good morning!
Corn and beans firmer, wheat lower overnight... Corn and soybeans posted corrective gains overnight, while wheat faced followthrough selling. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are 6 to 7 cents higher, winter wheat markets are 3 to 6 cents lower and spring wheat is around a penny lower. Front-month crude oil futures are around 50 cents lower and the U.S. dollar index is near unchanged.
Vilsack talks regulations, farm support and climate goals... USDA Secretary Tom Vilsack addressed regulations during a session with reporters at USDA’s 100th Outlook Forum near Washington, DC. Vilsack reiterated his stance against focusing farm bill support on larger farmers, citing Census of Agriculture data to support the need for assistance to small- and medium-sized farms. He expressed concerns about potential conflicts between the Securities and Exchange Commission (SEC) climate reporting rule and USDA’s efforts to promote climate-smart commodity practices, advocating for incentives over mandates to achieve climate goals. Vilsack also defended USDA’s regulatory efforts, particularly regarding electronic animal ID tags for cattle and bison, emphasizing their importance in disease outbreak mitigation despite the relatively small cost to ranchers.
Lawmakers push for ethanol-based SAF credits... Lawmakers, including Democratic Sen. Amy Klobuchar (Minn.) and Tammy Duckworth (Ill.), Republican Sen. John Thune (S.D.) and 40 others, wrote a letter to the Biden administration on Thursday to ensure American farmers can benefit from tax credits aimed at reducing climate-change pollution through the production of lower-emission jet fuel. Their concern centers on the potential revision of the Energy Department’s emissions-measuring method, known as GREET, which could impact the ability of the corn-ethanol industry to claim subsidies. The lawmakers called for the Treasury Department to act by March 1 and ensure the update properly credits practices like regenerative farming and carbon capture, recognizes the contributions of U.S. agriculture in indirect land-use changes and rewards modern practices like precision agriculture that increase per-acre yields.
French wheat crop rating at four-year low... France’s ag ministry rated 68% of the country’s wheat crop in good or excellent condition as of Feb. 12, unchanged from the previous week but the lowest for this time of year since 2020. Torrential rain last fall and in early winter delayed planting in France and also hampered the establishment of crops, particularly along the west coast.
Congress leaves for extended recess... Despite a lot of work to do, the House exited a day early and will be gone for a nearly two-week Presidents Day recess. The House will return Feb. 28, just three days before the first government funding deadline on March 1 (including for USDA). The Senate is out until Feb. 26, but several members are overseas for the annual Munich security conference.
House won’t pass another temporary spending bill to prevent partial gov’t shutdown... That’s according to Rep. Tom Emmer (R-Minn.), the Republican majority’s top vote-counter. With the current funding set to expire March 1 for some agencies including USDA and March 8 for others, Emmer’s statement increases the possibility of a shutdown as Congress faces limited time to finalize the fiscal year 2024 spending measure. Although Emmer remains hopeful that a shutdown can be avoided, conservative demands for policy changes pose a challenge to negotiations. Emmer also criticized the White House for not engaging in border security talks to release Ukraine aid, suggesting a potential reduction in aid levels to focus on military support.
China steps up ‘whitelist’ mechanism for property sector... Five state-owned Chinese banks have been matched with more than 8,200 residential projects for development loans under the “whitelist” mechanism aimed at injecting liquidity into the crisis-hit sector, government-backed media The Paper reported. The high number of projects already approved for possible support highlights the government’s efforts to free up funding for the debt-riddled industry, although it is unclear how many will secure loans. Under the “project whitelist” mechanism launched on Jan. 26, city governments are recommending to banks residential projects suitable for financial support and are coordinating with financial institutions to meet projects’ needs. A sixth state bank, Postal Savings Bank of China, has already approved some loans after receiving “whitelist” projects with 5.7 billion yuan ($792.5 million) of financing needs, although it has not given details on the number of projects involved, The Paper reported.
Beef prices strengthen, movement improves... Wholesale beef prices firmed $1.30 for Choice and $3.97 for Select on Thursday. Despite the strong price gains, packers moved 134 loads of product. With Choice above $295.00 and Select at nearly $288.00, retailer demand will be tested. Retailers have proven to be selective buyers at these levels since late last year.
Pork cutout surges back to resistance level... The pork cutout value firmed $4.04 on Thursday, led by gains of more than $6.00 in hams and bellies, though loins also jumped $4.70. At $89.95, the cutout is up against resistance that has capped price gains and slowed retailer buying in the recent past. Packers moved only 242.7 loads of product amid the strong price gains yesterday.
Overnight demand news... Egypt purchased 180,000 MT of wheat, including 120,000 Ukrainian and 60,000 MT Romanian.
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
- 2:00 p.m. Crop Values - Statistical Bulletin — NASS
- 2:00 p.m. Farm Numbers and Livestock Operations — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Potato Stocks — NASS
- 2:30 p.m. Commitments of Traders — CFTC
