First Thing Today | March 8, 2024

Good morning!

Please fill out our acreage survey... You should have received our annual spring acreage survey via e-mail. Please fill out the survey with your current planting intentions for this year. We’ll cover results and our acreage forecasts ahead of USDA’s March 28 Prospective Plantings Report. Click here to fill out the survey if you haven’t already responded. Please complete the survey only once.

Quiet overnight grain trade... Grain trade was light overnight ahead of USDA’s March crop reports later this morning. As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents lower, soybeans are fractionally to a penny lower in most contracts, winter wheat markets are steady to 3 cents higher and spring wheat is steady to fractionally lower. Front-month crude oil futures are around 50 cents lower and the U.S. dollar index is trading just below unchanged.

March S&D Report likely to feature modest adjustments... USDA is expected to make minor adjustments to its U.S. usage forecasts in the Supply & Demand Report at 11:00 a.m. CT, which would lead to slight changes to 2023-24 domestic ending stocks. Analysts expect USDA to project U.S. ending stocks at 2.159 billion bu. for corn (down 13 million bu. from February), 319 million bu. for soybeans (up 4 million bu.), 657 million bu. for wheat (down 1 million bu.) and 2.72 million bales for cotton (down 80,000 bales). A greater focus will be USDA’s changes to South American crop forecasts, especially for Brazil, which will impact global ending stocks.

Biden addresses farm sector, climate change and China in SOTU address... President Joe Biden’s State of the Union (SOTU) address touched on several key issues for agriculture. Regarding the farm sector, Biden said: “Because of my investments, family farms are better able to stay in the family and children and grandchildren won’t have to leave home to make a living. It’s transformative.” He added, “Because of my investments in the family farm led by my Secretary of Agriculture who knows more about this than anybody I know, we’re better able to stay on those farms so their children and grandchildren won’t have to leave home, leave home to make a living. It’s transformative.” On climate, Biden said: “We are also making history by confronting the climate crisis, not denying it… I’m taking the most significant action on climate ever in the history of the world. I am cutting our carbon emissions in half by 2030.” Regarding China, Biden noted: “Our trade deficit with China is down to the lowest point in over a decade. We’re standing up against China’s unfair economic practices. We want competition with China, but not conflict.”

Senate working to pass gov’t funding package today to avert partial shutdown... The $460 billion package, consisting of six bills, received overwhelming support in the House. The Senate plans to conduct a procedural vote at noon ET today to advance the funding bill. Meanwhile, work is ongoing on the remaining six bills, which include larger and more challenging appropriations measures such as Defense, Labor-HHS-Education and Homeland Security. The Senate aims to address these bills before the March 22 midnight deadline.

Ag trade deficit surges in January... The U.S. exported $14.90 billion of agricultural goods in January against imports of $17.44 billion, resulting in a deficit of $2.54 billion — a significant increase from December's $323 million gap. During the first four months of fiscal year (FY) 2024, U.S. ag exports stood at $63.14 billion against imports of $66.00 billion for a deficit of $2.86 billion. USDA forecasts ag exports at $170.5 billion and imports at $201.0 billion for FY 2024, which would imply a deficit of $30.5 billion.

FAO food price index drops for seventh straight month in February... The UN Food and Agriculture Organization global food price index dropped another 0.7% in February as decreases in the price for cereal grains and vegoils more than offset increases in sugar, meats and dairy. The February index was down 10.5% from last year and the lowest since February 2021. Compared to year-ago, prices declined 0.8% for meat, 13.4% for dairy, 22.4% for cereal grains and 11.0% for vegoils, while sugar prices rose 12.5%.

USDA announces rise in FY 2024 raw cane sugar TRQ... USDA announced an increase of 125,000 metric tons raw value (MTRV) in the fiscal year (FY) 2024 cane sugar tariff rate quota (TRQ) after determining that “additional supplies of raw cane sugar are required in the U.S. market.” USDA also said it would continue to monitor the situation ahead and will make “further program adjustments during FY 2024 if needed.” The increase is based on a conversion factor of 1 metric ton raw value equaling 1.10231125 short tons raw value. With this increase, the overall FY 2024 raw sugar TRQ is now 1,242,195 MTRV. The Office of the U.S. Trade Representative will allocate this increase among supplying countries and customs areas.

Sharp slowdown in jobs growth expected... Economists polled by Reuters expect the Labor Department to report non-farm payrolls increased 200,000 during February, which would be a sharp drop from the 353,000 jobs added in January. The unemployment rate is expected to remain at 3.7%.

Japan trims wheat sales price... Japan will reduce the rate at which it sells imported wheat to domestic flour mills from April by an average of 0.6% to reflect softer import prices, the ag ministry said. For the six months starting April 1, the ministry’s wheat selling price to local millers will average 67,810 yen ($459) per metric ton, down from 68,240 yen the previous six months. Japan buys five types of milling wheat from the U.S., Canada and Australia through import tenders and sells to domestic millers at prices set twice a year.

French wheat crop ratings unchanged... As of March 4, France’s ag ministry rated the country’s wheat crop 68% good or excellent, unchanged from the previous week. That was the lowest for this date since 2020. Just 28% of the country’s spring barley crop was seeded, well below 96% at this point last year and the five-year average of 71%.

India’s rice prices score another new high... India’s rice export prices surged to a record high this week as traders sought clarity over how the export levy is calculated. India’s 5% broken parboiled variety was quoted at a record $552 to $560 per metric ton, up from $546 to $554 last week. Thailand’s 5% broken rice prices rose to $620 to $622 per metric ton, from $615 last week. Vietnam’s 5% broken rice was offered at around $580, down from $600 a week ago.

China’s EV sales growth slows but market share rising... China’s electric vehicle (EV) sales growth slowed in the first two months of this year. Sales of battery-powered EVs rose 18.2% in January-February versus 20.8% for all of 2023, based on data from the China Passenger Car Association. Together with plug-in hybrids, new energy vehicle (NEV) sales jumped 37.5% in the two-month period, versus 36.2% for 2023. The result outpaced the overall passenger vehicle market’s 16.3% growth as widespread discounts fueled demand. NEVs accounted for 33.5% of total car sales in January-February versus 28.3% in the same period a year earlier, grabbing market share from gas-powered cars for which sales rose 7.8%.

Euro zone economic growth inches up from year-ago... The euro zone economy expanded 0.1% annually in the final quarter of 2023, final estimates confirmed, the same as an upwardly revised reading for the third quarter. Among the largest economies, France expanded 0.7%, Italy grew 0.6% and Spain jumped 2%, while GDP in Germany shrank 0.2%.

Cash cattle trade higher... Light cash cattle trade started around $185.00 in the northern market on Thursday, which was up from week-ago and a high for this year. Activity remained quiet in the Southern Plains, though cash sources also expect trade at higher prices there today.

Cash hog index continues methodical climb... The CME lean hog index is up another 17 cents to $81.48 as of March 6. The index is up $16.43 since marking a seasonal low at the beginning of this year and $2.39 above last year at this time. April lean hog futures finished Thursday at a $3.045 premium to today’s cash quote.

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. Employment Situation — BLS
• 11:00 a.m. WASDE Report — WAOB
• 11:00 a.m. Livestock and Meat International Trade Data — ERS
• 11:00 a.m. Cotton Ginnings — NASS
• 11:00 a.m. Crop Production — NASS
• 11:15 a.m. Cotton: World Markets and Trade — FAS
• 11:15 a.m. Grains: World Markets and Trade — FAS
• 11:15 a.m. Oilseeds: World Markets and Trade — FAS
• 11:15 a.m. World Agricultural Production — FAS
• 2:00 p.m. County Estimates - All Rice — NASS
• 2:00 p.m. Peanut Prices — NASS
• 2:30 p.m. Commitments of Traders — CFTC