First Thing Today | March 26, 2024

First Thing Today
First Thing Today
(Pro Farmer)

Good morning!

Grains weaker overnight... Corn, soybeans and wheat faced mild price pressure during a relatively quiet overnight session. As of 6:30 a.m. CT, corn future are trading fractionally to a penny lower, soybeans are mostly 4 cents lower, SRW wheat is steady to fractionally lower, HRW wheat is mostly a nickel lower and HRS wheat is 1 to 3 cents lower. Front-month crude oil futures are modestly firmer while the U.S. dollar index is around 400 points lower.

Cordonnier leaves South American crop estimates unchanged... South American crop consultant Dr. Michael Cordonnier left his Brazilian crop estimates at 145 MMT for soybeans and 112 MMT for corn, maintaining his neutral/lower bias toward both. Cordonnier left his Argentine crop forecasts at 51 MMT for soybeans and 55 MMT for corn, with a neutral/slightly lower bias as he awaits damage assessments from last week’s flooding in east-central production areas of the country.

HRW wheat conditions continue to improve in March... State-level winter wheat condition ratings signaled more general improvement in the HRW crop over the past month, despite a minor downtick in top producer Kansas. The “good” to “excellent” ratings for HRW wheat rose 12 points in Colorado (to 68%), six points in Nebraska (66%), five points in Texas (51%) and three points in Montana (48%) during March. The “good” to “excellent” ratings for HRW wheat declined four points in Kansas (53%) and two points in South Dakota (56%) over the past month. Conditions were unchanged in Oklahoma with 70% of the crop rated “good” to “excellent.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved another 1.5 points from the end of February to 351.7 and stood 28.4 points above USDA’s final national rating at the end of November. Click here for details. USDA will issue its initial national winter wheat crop conditions ratings of the spring on Monday, April 1.

India’s rice exports at risk due to tax demands... India’s exporters have received notices from the customs department demanding payment of duty differentials on rice exported in the past 18 months, four exporters told Reuters, a rare tax demand that could cripple rice shipments from the country. Exporters were paying a 20% duty based on the Free on Board (FOB) value of rice. However, the customs department now requires them to consider the transaction value and pay any resulting duty difference. According to the government’s new calculations, exporters would need to pay an additional duty of around $15 per metric ton on rice exported in the past two years, said a New-Delhi based dealer with a global trade house.

Baltimore bridge collapses into river after being struck by ship... A significant portion of the 1.6-mile Francis Scott Key Bridge on the Patapsco River in Baltimore Harbor collapsed into the sea after being struck by a cargo ship at approximately 1:30 a.m. local time. It was not immediately clear how the bridge collapse would affect access to the Port of Baltimore, one of the nation’s largest shipping hubs.

Environmental and refining groups contest EPA’s RFS for 2023–2025... Environmental organizations and refining groups are challenging EPA’s renewable fuel standards (RFS) for 2023 to 2025, claiming the agency’s analysis is flawed. The Center for Biological Diversity and National Wildlife Federation argued EPA’s decision to maintain biofuels volumes exacerbates climate, environmental and justice harms instead of mitigating them, contrary to the goals of the Clean Air Act. The environmental groups assert that biofuels harm habitats, air and water quality, and impose increased costs on consumers without demonstrating significant climate change mitigation benefits. They argue EPA’s analysis only assessed modest changes, overlooking broader environmental impacts. Multiple challenges have been consolidated, including objections from refiners who claim EPA unlawfully imposed high biofuel mandates, leading to increased costs without boosting renewable fuel production. Refiners also accuse EPA of setting unreasonably burdensome requirements for renewable fuel made from food waste, without adequate explanation or consideration of alternatives. Various legal representatives are involved in the challenges, including the Center for Biological Diversity, Earthjustice and other law firms representing different petitioners.

U.S., UK accuse China of cyberespionage... U.S. and British officials on Monday filed charges, imposed sanctions and accused Beijing of a sweeping cyberespionage campaign that allegedly hit millions of people. Nicknamed Advanced Persistent Threat 31 or “APT31,” officials from both countries said the hacking group was an arm of China’s Ministry of State Security. Targets included White House staffers, U.S. senators, British parliamentarians and government officials across the world who criticized Beijing. China called the accusations “pure political maneuvering” and “completely fabricated and malicious slanders.” China’s foreign ministry said Beijing “will take necessary measures to safeguard China's legitimate rights and interests.”

China files WTO complaint against U.S. over EV materials... China has filed a complaint to the World Trade Organization over U.S. rules that block electric vehicle (EV) manufacturers from sourcing materials from China and other foreign adversaries, according to the ministry of commerce.

China wants banks to speed up new loans to property developers... Chinese regulators are pushing banks to speed up approvals of new loans to cash-starved private property developers in a bid to boost the floundering sector, people with knowledge of the matter told Reuters. The effort uses the “whitelist” mechanism, Beijing’s support measure aimed at easing the sector’s unprecedented liquidity squeeze and spurring home purchases, as new home prices fell in February for an eighth straight month. Most top domestic banks have so far shied away from significantly bolstering credit exposure to the crisis-hit sector despite repeated encouragement from Beijing.

ERP payouts update... Total payments under USDA’s Emergency Relief Program (ERP) have stayed at $8.64 billion as of March 24, despite a slight increase in Phase 2 payments. Phase 2 ERP payouts rose from $883.94 million to $884.0 million in the most recent week, while Phase 1 ERP payments remained largely unchanged at $7.75 billion.

February frozen meat stocks signal strong demand... USDA’s Cold Storage Report showed frozen pork stocks declined contra-seasonally during February, while beef inventories fell more than average. Beef inventories at the end of February totaled 442.8 million lbs., down 28.5 million lbs. from January. The five-year average was a 12.9-million-lb. decline during the month. Beef inventories dropped 58.0 million lbs. (11.6%) from year-ago and were 59.8 million lbs. (11.9%) less than the five-year average. Pork stocks dropped 6.8 million lbs. during February to 456.5 million lbs., whereas the five-year average was a 29.7-million-lb. increase for the month. Pork inventories fell 65.1 million lbs. (12.5%) from February 2023 and were 93.0 million lbs. (16.9%) less than the five-year average.

China’s sow herd, hog slaughter shrinks in February... China had 40.42 million sows at the end of February, down 0.6% from January and 6.9% less than last year, the ag ministry said. The number of pigs slaughtered in February fell 6.9% from last year to 21.04 million head, a 43.5% drop from January.

Cash cattle post all-time high... Cash cattle prices averaged $189.56 last week, up $2.09 from the previous week and 81 cents above the previous high from June 2023. Despite the cash market strength, April live cattle futures dropped $1.30 on Monday and finished the day at a $3.36 discount to last week’s cash price, signaling traders sense a short-term top is close.

Cash hog index declines... The CME lean hog index is down 12 cents to $83.48 as of March 22, only the seventh daily decline since the seasonal rally started at the beginning of the year. As of Monday’s close, April lean hog futures held a $1.67 premium to today’s cash quota.  

Overnight demand news... South Korea purchased 134,000 MT of corn – 66,000 MT expected to be sourced from South America and 68,000 MT expected to be sourced from South America or South Africa. South Korea also bought 77,774 MT of U.S. medium brown rice. Egypt tendered to buy an unspecified volume of soyoil from multiple sources.

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

 

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