Followthrough buying in soybeans and wheat overnight... Corn futures are fractionally lower after favoring the downside overnight. Soybeans enjoyed gains overnight and as of 6:30 a.m. CT most contracts are 2 to 3 cents higher. Winter wheat futures are up 4 to 6 cents on followthrough buying after yesterday’s bullish reversal for the SRW wheat market. Spring wheat futures are 4 to 7 cents higher. The U.S. dollar index is slightly lower, while crude oil futures are firmer.
Trump to scale back trade opening with Cuba... President Donald Trump will issue a policy directive today aimed at scaling back some of the changes made by former President Barack Obama to U.S./Cuba policy, taking aim at tourist travel and transactions with Cuba’s military but leaving in several of Obama’s steps toward normalization. Trump will direct the Treasury and Commerce departments to prohibit direct financial transactions with Cuba’s military and intelligence services. The directive will allow exceptions for airlines and cruise lines and will aim to not disrupt business under way. Much rests on how final regulations are crafted; the announcement will trigger a 30-day process for Treasury and Commerce to begin drafting new regulations, and the changes won’t go into effect until that process is completed. The countries’ embassies will remain open. Individual travel will remain legal through more than 10 categories, including research and humanitarian work and family visits.
Impact of Trump’s Cuba policy changes... Trump had promised on the campaign trail to roll back Obama’s policy changes on Cuba, and officials say his announcements are aimed at following through on that. White House officials signaled that Trump will retain portions of the policy shift that has won the endorsement of those in agricultural states that want to expand trade with Cuba. While they say the coming changes should not impact U.S. farm product sales to Cuba, the new restrictions will bar U.S. companies from doing business with companies affiliated with the Cuban military. That would make future U.S. ag export sales more difficult.” Why? U.S. food and ag cargoes are unloaded at Mariel, about 25 miles west of Havana. The Cuban military runs the port, so a prohibition on dealing with military-related companies would shut off use of the port.
Strike disrupts shipments at Argentine port... Members of the CGT San Lorenzo Port workers union launched an open-ended strike on Wednesday, causing more than 20 grain cargo ships to drop anchor along Argentina’s Parana River yesterday. Strikes are common in South America, and they are typically short-lived.
Better demand at Chinese corn auction... China sold 1.254 MMT of corn from its state reserves today, which represents 58.5% of the grain offered. The bulk of the business was for 2013-crop corn, which sold at an average price of 1,366 yuan ($200.48) per metric ton. This was much improved from yesterday’s light sales.
Competitive Black Sea prices should blunt impact of smaller wheat crop on exports... Analysts polled by Reuters expect the Black Sea countries of Russia, Ukraine and Kazakstan to produce 105.8 MMT of wheat in 2017, which would be a decline of 7.5% from year-ago. This is expected to result in a 3.3% drop in exports to 50.4 MMT in 2017-18. Russia will likely ship a record 28.8 MMT of wheat in 2017-18, up 4.7% from year-ago, as competitive prices and high stockpiles should make up for a smaller crop size. Ukraine is expected to ship 14.6 MMT of wheat, which would be down 3.2 MMT from USDA’s forecast for the current marketing year. Kazakhstan is likely to export 7.0 MMT of wheat, according to the survey, up 2.9% from year-ago.
French crop condition ratings slide... FranceAgriMer now rates 74% of the soft wheat crop in good to excellent condition, a one-point drop from week-ago. It also lowered the amount of top-rated winter and spring barley to 65% and 73%, respectively. Sixty-two percent of the durum wheat crop is now rated good to excellent, down two points from week-ago. The French farm office rates 86% of its corn crop in top shape, down a point from last week. Hot, dry conditions have taken a toll on crops in this major producing region.
Dow-DuPont garners U.S. antitrust approval to create new firm... Dow Chemical Co. and DuPont Co. won U.S. antitrust approval for their $73-billion merger. The companies said the assets they agreed to sell to win U.S. approval didn’t go beyond what they had already agreed to with other jurisdictions. DuPont will sell off some of its herbicide and insecticide products and Dow will unload a plastics packaging unit, according to a settlement filed Thursday in federal court in Washington. The new company will be called DowDuPont Inc. They are expected to close the deal in August. The plan is to split the merged company into three within 18 months of closing, with the first spinoff a materials/science company that will retain the Dow name. The other two post-split companies will focus on ag and specialty products.
More cash cattle trade at softer prices... Some additional cash cattle trade took place in Nebraska at $124 to $125 and in the Iowa/Minnesota market at $126, which is down from trade earlier in the week that mostly ranged from $130 to $134. This signals recent declines in futures prices upped feedlots’ bargaining power. Futures are still below even this latest drop in the cash market.
Slaughter moderates as margins dwindle... Packer profit margins have slipped into the upper teens this week, as gains in the cash market have outpaced those of the product market. This week’s kill has also slowed from last week’s aggressive pace, though slaughter is still running ahead of year-ago levels.
Overnight demand news... Pakistan recently purchased around 60,000 MT of soybeans that will likely be sourced from the U.S. or Brazil.
Today’s reports:
- None.
