Followthrough buying overnight... Corn futures enjoyed followthrough buying overnight and the market is up 2 to 3 cents as of 6:30 a.m. CT. Soybeans are 4 cents higher. Winter wheat futures are up 4 to 5 cents, while spring wheat is currently trading mixed, as early gains and the move above $6.00 for several contacts triggered profit-taking. The U.S. dollar index is higher today, while crude oil futures are down slightly.
Infrastructure, waterways focus for President Trump... President Donald Trump will deliver remarks on infrastructure with a specific focus on U.S. waterways in an appearance in Cincinnati. The remarks are part of the focus this week the White House has put on infrastructure. In the appearance, Trump will highlight some additional portions of the plan that includes federal grants to rural areas as well as to states and localities to create additional funding for projects. Given the backdrop of a barge behind him at the Port of Cincinnati, Trump is expected to talk about the thousands of miles of waterways used to move an array of products into export locations and to other users.
Lingering U.S./Mexico sugar issues but agreement in principle announced... Top officials from both countries on Tuesday announced a tentative accord. But the American Sugar Alliance has some concerns about a “major loophole” dealing with additional U.S. needs. Alliance spokesman Phillip Hayes said, “Mexico could exploit this loophole to continue to dump subsidized sugar into the U.S. market and short U.S. refineries of raw sugar inputs.” Hayes said the U.S. sugar industry wanted to work with Commerce Sec. Wilbur Ross on the provision that gives Mexico the right of first refusal to fill 100% of any additional sugar USDA determines is necessary to meet commercial demand for sugar that is used for everything from candy to beverages and processed foods. The agreement will be finalized over several days, but removes one contentious issue from the table when the U.S., Mexico and Canada begin formal talks to renegotiate the North American Free Trade Agreement.
U.S. corn industry applauds sugar accord with Mexico... John Bode, president and CEO of the Corn Refiners Association, said the agreement once finalized would protect a $500-million-a-year market in Mexico for his industry. The National Corn Growers Association also welcomed the agreement, noting that Mexico is the top export market for U.S. corn overall.
Trial that could oust Brazil’s Temer begins... A trial began Tuesday in Brazil’s Superior Electoral Court that could unseat President Michel Temer. He has been accused of involvement in illegal campaign financing during the 2014 presidential election, when Temer was a running mate to the eventual victor, Dilma Rousseff. Rousseff was since been impeached and suspended, putting Temer in charge. If the court finds that Temer was responsible for illegal fundraising of the votes he received in 2014, he would be suspended and replaced by someone who would serve the rest of the term through December 2018. The president is also dealing with allegations he condoned bribes paid as hush money for corruption cases involving his government. Temer has rejected calls for him to resign.
South Korea again dealing with bird flu... South Korea raised its bird flu alert status to its highest level on Monday after the first bird flu case since early April was detected. Since then, the country’s ag minister has ordered the cull of 186,000 farm birds to prevent the spread of bird flu as more cases of highly pathogenic H5N8 avian flu were confirmed. Since the outbreak first began in November 2016, around 38 million birds have been killed, representing more than a fifth of the country’s total poultry population, reports Ag Ministry Spokesman Lee Ju-meung. Lee also noted that a mass culling was unlikely in this latest flare up as the new cases have mostly been on small farms and the virus does not typically spread as fast during the summer.
JBS sells Argentine operations to Minerva... JBS SA has agreed to sell its Argentine operations, as well as its operations in Paraguay and Uruguay to Minerva SA, a smaller rival. The $300-million deal that is expected to close next month will be used to pay off debt. This comes as JBS’s parent company J&K Investimentos made a deal with federal prosecutors and agreed to pay a $10.3 billion real ($3.1 billion) fine for its role in crimes committed by the Batista family that controls the group.
Bearish reversals could lead to followthrough selling in cattle... A number of live cattle contracts posted bearish reversals Tuesday, setting the stage for followthrough selling today. And limits are expanded in the feeder cattle market. But while futures faced heavy selling yesterday, technical damage was limited. Today traders will zero in on the results of the online Fed Cattle Exchange Auction. Last week, sales took place at an average top price of $132.17, which eventually led to active trade on the Plains that averaged around $136.
Cash hog strength continues... Cash hog bids strengthened again across the Midwest on Tuesday, which makes traders comfortable with the June contract at a premium to the cash hog index. But the fact that the July and August contracts are below June futures signals traders expect cash prices to top out this month. Meanwhile, pork movement improved Tuesday after a light start to the week.
Overnight demand news... Taiwan tendered to buy 92,400 MT of milling wheat from the United States. Japan will buy 14,010 MT of feed wheat in its simultaneous buy and sell auction.
Today’s reports:
- 9:30 a.m., Weekly Ethanol Production -- EIA
- 9:00 a.m., Milk Cost of Production -- ERS
- 2:00 p.m., Broiler Hatchery -- NASS
