First Thing Today | April 19, 2024
Good morning!
Grains firmer overnight... Corn, soybeans and wheat posted corrective gains during the overnight session. As of 6:30 a.m. CT, corn and soybean futures are trading 2 to 3 cents higher, SRW wheat is 5 to 6 cents higher, HRW wheat is around a penny higher and HRS wheat is 8 to 9 cents higher. Front-month crude oil futures are about 80 cents lower and the U.S. dollar index is modestly weaker.
Israel retaliates against Iran... Israel launched missiles at Iran late Thursday in retaliation for an April 13 attack. An Iranian official told Reuters there were no plans to respond against Israel for the incident. This development may have contributed to a sense of temporary relief among investors, prompting a reversal of some earlier knee-jerk market movements.
EPA to allow summer sales of E15... EPA today will announce plans to temporarily expand E15 sales beyond June 1 for the 2024 summer driving season, three sources familiar with the matter told Reuters. EPA has taken similar actions the past two years, granting a 20-day waiver and then repeatedly extending it through Sept. 15.
China’s ‘healthy, robust’ winter wheat crop lays foundation for bumper grain production... China is set for another year of bumper harvest of grains and oilseeds, helped by expanded planting of winter wheat and rapeseed and healthy growth of seedlings, the country’s agriculture ministry said. Good prices and government subsidies encouraged farmers to expand winter wheat and rapeseed plantings, an ag ministry official said. “I went to the main producing areas of Hebei, Shandong, Henan and Anhui, indeed the wheat fields are healthy, robust... good seedlings lay the foundation for a good harvest,” he said.
India’s wheat stocks fall to 16-year low... India’s wheat stocks held in government warehouses dropped to their lowest level in 16 years after two straight years of reduced production prompted New Delhi to sell record volumes to tame inflation. Wheat reserves in state warehouses totaled 7.5 MMT at the beginning of April, down from 8.35 MMT last year, according to data compiled by the state-run Food Corporation of India. Over the past decade, wheat stocks on April 1 averaged 16.7 MMT. Despite the tight supply, New Delhi has resisted calls to encourage imports by cutting or removing the 40% tax.
French wheat crop ratings hold... France’s ag ministry rated 64% of the wheat crop as good or excellent as of April 15, unchanged from the previous week but the lowest for this date since 2020. The country’s winter barley rating was also unchanged at 67% good/excellent.
Poland to pay farmers subsidy hurt by low prices... Poland will pay 2.1 billion zlotys ($516.49 million) in subsidies to farmers to compensate them for low grain prices, according to a draft regulation. “The aid is intended to compensate farmers for losses incurred in connection with the market situation caused by Russia’s aggression against Ukraine and to increase grain turnover, thus accelerating the emptying of warehouses before the upcoming harvest,” the regulation said.
China’s sow herd contracting... China’s hogs, sow and pig herds are declining amid government efforts to decrease production capacity, with prices expected to recover in the second quarter, the ag ministry said. China had 39.92 million sows at the end of March, down 500,000 head (1.2%) from the previous month and 7.3% below year-ago. China’s pig herd fell 5.2% from year-ago to 408.5 million head.
Drop in cattle placements expected... USDA’s Cattle on Feed Report this afternoon is expected to show dow, which would be the seventh straight month of year-over-year increases in feedlot numbers. After a sharp increase in the number of calves moved into feedlots during February, placements last month are expected to have declined 7.0% from last year. Marketings are expected to be down 11.9%.
Wholesale beef prices continue to slide... Choice wholesale beef prices dropped $1.01 to $295.80 on Thursday, while Select fell $1.61 to $289.27. Falling wholesale beef prices have kept packer margins deep in the red and made them unwilling to raise cash cattle bids. With feedlots in no hurry to move cattle at lower prices again this week, active cash trade doesn’t appear likely until later today.
Cash hog index climbs, pork pauses... The CME lean hog index is up another dime to $91.46 as of April 17. After recent declines, the premium in May lean hog futures tightened to $3.265 as of Thursday’s close. The pork cutout value firmed 41 cents on Thursday to $99.96. While it has spent three consecutive days below $100.00, there appears to be solid retailer demand just under that level as movement firmed to 303.7 loads yesterday.
Overnight demand news... South Korea purchased 137,000 MT of corn expected to be sourced from the U.S., South America or South Africa.
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. Cattle on Feed — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC
