First Thing Today | April 18, 2024

Good morning!

Corn and beans lower, wheat firmer overnight... Corn futures mildly extended Wednesday’s losses overnight, while soybeans erased gains from yesterday. Wheat was supported by light corrective buying. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 6 to 7 cents lower, winter wheat markets are steady to a penny higher and spring wheat is 4 to 6 cents higher. Front-month crude oil futures and the U.S. dollar index are both modestly weaker.

Attaché cuts Argentine corn crop estimate amid corn stunt disease pressure... USDA’s attaché in Argentina cut the country’s corn production forecast to 51 MMT from 57 MMT projected in January due to a 4% reduction in harvested acreage and impacts from corn stunt disease. The post noted, “This is an evolving disease, and its final damage will be known once the last fields are harvested in late June. Farmers will wait until combines begin to give real yield data and calculate if the produce will more than offset the cost of the harvesting. If not, many low-yielding fields could remain unharvested. Currently, most contacts are estimating production of 50 MMT to 52 MMT, but there is a downside as corn conditions get worse day by day. Several contacts are already estimating a potential crop of below 50 MMT.” For 2024-25, the attaché projects Argentina’s corn production at 48 MMT for corn, as producers switch to soybeans due to this year’s disease issue.

Weekly Export Sales Report out this morning... For the week ended April 11, traders expect:

Low water levels slow Paraguay soybean exports... Paraguay will produce a record soybean crop but exporters are worried about low river levels that are slowing shipments along the key Paraguay-Paraná waterway, with a drought in central-west Brazil affecting water levels running downstream. “Low rivers mean the barges can’t carry as much, and that slows down the entire process,” Sonia Tomassone, foreign trade adviser at the Paraguayan Chamber of Oilseed and Cereal Exporters (CAPECO), told Reuters. The level of the Paraguay River near the key grains port of Villeta is 0.74 meters, government data show, well down from over 5 meters at the same date a year ago. Meteorologists have warned that despite some recent rains, dry conditions in the Pantanal wetlands of western Brazil could continue to affect regional river sources. “The situation is going to improve at the mouth of the Paraguay River, but (the rains) aren’t lasting,” said Eduardo Mingo, director of meteorology and hydrology at Paraguay’s National Meteorological Center.

China’s barley, wheat and sorghum imports jump in March, corn drops... China imported 1.78 MMT of wheat, 1.72 MMT of barley and 560,000 MT of sorghum last month, up 34.2%, 135.4% and 200.4%, respectively, from year-ago levels. Corn imports fell to 1.71 MMT, down 22.0% from last year. Through the first quarter of 2024, China’s grain imports stood at 7.9 MMT of corn (up 5.1%), 4.29 MMT of wheat (down 1.4%), 4.43 MMT of barley (up 162.2%) and 2.17 MMT of sorghum (up 323.6%).

Farm bill update: Several loose ends remain... Most important is for House Ag Chair Glenn “GT” Thompson (R-Pa) to get some Democrats on board because several House Republicans are expected to oppose whatever package is developed. However, Democrats are balking at any changes to the Thrifty Food Program where even no outright cut in the program is still labeled as one. Democrats are trying to offer a compromise, though that is proving to be a tough task. But there must be progress since commodity group lobbyists will get a briefing on the latest, supposedly next week.

U.S. to reimpose oil sanctions on Venezuela... The Biden administration said it would not renew a license set to expire today that had broadly eased Venezuela oil sanctions, moving to reimpose punitive measures in response to President Nicolas Maduro’s failure to meet his election commitments. The U.S. Treasury Department announced on Wednesday it had issued a replacement license giving companies 45 days to “wind down” their business and transactions in the OPEC country’s oil and gas sector. While Maduro has honored some commitments under last year’s deal, he has failed to meet others, including allowing the opposition to run the candidate of its choice against him in the July 28 presidential election, senior U.S. officials said.

China’s pork imports plunge in March... China imported 90,000 MT of pork in March, down 39.3% from last year. Through the first three months of this year, China imported 260,000 MT of pork, down 51.7% from the same period last year.

Slow start to cash cattle trade... Cash cattle trade has been nonexistent so far, with packers slow to establish bids and feedlots seeking higher prices. Given the slow start to cash negotiations and this being a report week, active cash trade is not expected until Friday – potentially after USDA’s Cattle on Feed Report on Friday afternoon.

Cash hog index continues to climb, pork cutout pauses... The CME lean hog index is up another 38 cents to $91.36 as of April 16. The index has surged $26.31 on the seasonal rally since the beginning of the year and is nearly $20.00 above last year at this time. The pork cutout value was unchanged at $99.55 on Wednesday. Pork cutout has rallied $14.79 since the beginning of the yaer and is nearly $22.00 above last year.

Overnight demand news... Japan purchased 94,612 MT of milling wheat via its weekly tender, including 34,272 MT U.S. and 60,340 MT Canadian. South Korea purchased 50,000 MT of U.S. milling wheat but passed on a tender to buy up to 69,000 MT of corn from South America or South Africa. The Philippines purchased 50,000 MT of feed wheat expected to be sourced from Australia.

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. Weekly Export Sales — FAS
• 7:30 a.m. Extended Weather Forecast — NWS