Rains weigh on markets overnight... The arrival of needed rains weighed on the grain markets overnight. As of 6:30 a.m. CT corn futures are down 1 to 2 cents, while soybeans are 4 to 5 cents lower. Winter wheat futures are down 1 to 2 cents, while spring wheat contracts have slumped 9 to 10 cents. The U.S. dollar index is moderately higher, while crude oil futures are down slightly.
Weekly export sales out this morning... For the week ended June 8, traders expect corn sales between 600,000 MT and 1 MMT (500,000 MT to 700,000 MT old-crop and 100,000 MT to 300,000 MT new-crop), wheat sales between 350,000 MT and 550,000 MT, soybean sales between 350,000 MT and 750,000 MT (250,000 MT to 450,000 MT old-crop and 100,000 MT to 300,000 MT new-crop), soymeal sales between 50,000 MT to 250,000 MT (50,000 MT to 200,000 MT old-crop and 0 to 50,000 MT new-crop) and soyoil sales between 5,000 MT and 35,000 MT (5,000 MT to 25,000 MT old-crop and 0 to 10,000 MT new-crop).
NOPA expected to report modest uptick in crush for May... Members of the National Oilseed Processors Association will likely report they crushed 143.192 million bu. of soybeans last month, according to analysts surveyed by Reuters. This would be down 9.088 million bu. from last year, but up 4.058 million bu. from April. They expect the report to show soyoil stocks totaled 1.745 billion lbs. at the end of May, up 20 million lbs. from the month prior.
Argentine exchange ups soybean outlook... The Rosario grains exchange estimates Argentine farmers will harvest 57.3 MMT of soybeans this marketing year, which is a slight boost from its 57.0-MMT estimate last month. The exchange also projected wheat plantings will total 5.6 million hectares in 2017-18, which would be an 8% expansion from 2016-17. This is its first projection for the coming season.
Record-setting crops translate to big demand for silo bags in Brazil... The harvest of huge corn and soybean crops in Brazil has left farmers in need of quick and inexpensive storage solutions, since the country does not have enough silo space to handle the influx of grain. Ipesa do Brasil, a top producer of plastic silo bags, estimates that around 15 MMT to 20 MMT of grain could be stored in such bags this season, a 30% surge from two years ago. A record 80,000 silo bags were sold this year, says André Pessôa, a partner at Agroconsult. He details that under the right conditions, such bags can store grains for between six months and a year.
Hot, dry weather taking a toll on EU wheat crop... Strategie Grains has lowered its estimate of the European Union’s soft wheat crop by 1.1 MMT to 141.6 MMT, noting that heat and dry conditions in recent weeks have curbed crop prospects. However, this would still be up 5.5 MMT from last year’s crop. The consultancy detailed that the cut was due to lower yield projections for Spain, Germany and France. The EU will likely export 24.4 MMT of soft wheat in 2017-18, according to Strategie Grains, which is down 1.6 MMT from last month’s estimate.
Public comments requested on U.S./Mexico sugar trade accord... The Commerce Department is taking public comment on its preliminary agreement with Mexico to create a new ratio to address subsidized Mexican sugar imports to the U.S. Initial comments on the agreement are due June 21, rebuttal comments, June 26. Commerce and Mexico will sign a final the sugar deal June 30. Both governments and representatives from Mexico’s sugar industry initialed the accord on Wednesday. It is expected to be finalized after gathering feedback from the public over the next week. The sugar accord cuts the amount of refined sugar that Mexico can send to the U.S. to 30% of the total quota from 53%. It increases the proportion of raw sugar to 70%, while raising prices for both raw and refined shipments. However, a group representing major U.S. sugar refiners didn’t endorse the deal, saying it contains a loophole that would allow Mexico to continue dumping sugar into the U.S. at artificially low prices.
China’s central bank leaves rates unchanged... The People’s Bank of China has left interest rates unchanged, unlike its decision in March when it raised rates within hours of the Federal Reserve’s hike. Today and tomorrow will also see rate decisions in Turkey, Russia and Japan.
Farm bill listening session... The House Agriculture Committee will hold its first listening session away from Washington on June 24 to collect comments from farmers and others who will be affected by farm bill policies the committee writes this session. The hearing is in Gainesville, Fla., where the University of Florida is an agricultural research leader.
White House rural task force meets today... USDA Secretary Sonny Perdue today will lead the initial meeting of the White House Task Force on Agriculture and Rural Prosperity. Joining him will be Budget Director Mick Mulvaney, Trade Representative Bob Lighthizer, Energy Secretary Rick Perry and the chairman of the Federal Communications Commission, Ajit Pai, among other government officials. Today’s session is focused on how the task force can identify legislative, regulatory and interagency policy changes that will promote agricultural and economic development, as well as improve the quality of life in rural America, USDA said in a statement. A report with recommendations for action is due within six months.
First shipment of U.S. beef on its way to China... Nebraska’s Greater Omaha Packing says it sent a shipment of beef by air freight Wednesday to a buyer in Shanghai -- the first U.S. beef destined for China under the new trade agreement. It didn’t take long for the first shipment to be sent, as final protocols for exporters to ship beef to China were just announced Monday.
Futures remain sharply below cash cattle... Cash cattle trade in the Plains so far this week has come in $3 to $5 below the average cash price from last week. Despite the big discount futures hold to the cash market, they sold off aggressively Wednesday, with the June and August contracts ending limit down. As a result, the daily trading limit for live cattle futures is expanded to $4.50 today.
Pork demand stays strong... The pork cutout value inched only a penny higher Wednesday, but movement stayed strong at 317.30 loads despite the wholesale price being at its highest level since November 2014. Strong pork prices and movement have kept packer cutting margins deep in the black, which continues to support the cash hog market. Cash hog bids are expected to remain firmer across the Midwest today.
Overnight demand news... South Korea’s Korea Feed Association bought around 65,000 MT of yellow corn from optional origins, but it made no purchase in its second tender for up to 65,000 MT of corn. The country’s Korea Corn Processing Industry Association also bought around 60,000 MT of corn to be sourced from optional origins. Tunisia bought around 25,000 MT of soft milling wheat and 25,000 MT of feed barley from optional origins. Japan purchased 98,536 MT of food-quality wheat from the U.S. as well as 28,620 MT from Canada and 35,130 MT from Australia. Jordan made no purchase in its tender to buy 100,000 MT of feed barley.
Today’s reports:
- 7:30 a.m., Weekly Export Sales -- FAS
- 7:30 a.m., Drought Monitor -- USDA/NWS
- 7:30 a.m., Extended Weather Outlook -- NWS
- 11:00 a.m., Livestock, Dairy, & Poultry Outlook: June 2017 -- ERS
- 2:00 p.m., Turkey Hatchery -- NASS
