Corn starts week under pressure, but soybeans and wheat hold onto gains... Corn futures faced pressure overnight and the market is currently trading high-range and down 4 cents. Soybean futures traded in a wide range overnight, and as of 6:30 a.m. CT most contracts are up 3 to 4 cents. Winter wheat futures are fractionally higher, while spring wheat are up 3 cents. The U.S. dollar index is marginally lower, while crude oil futures are up slightly.
Rains fall, but weather concerns remain close at hand... Rain fell across most of the Midwest and Northern Plains over the weekend, but accumulation was erratic. The heaviest precip amounts were in eastern areas of the Corn Belt. Cooler temps have moved into the region, diminishing moisture needs. Two systems are expected to bring additional rainfall to the Midwest this week. But looking farther out, there is concern that a ridge of high pressure could move into the Plains and Midwest as the calendar flips to July, bringing high temps and limiting rainfall, says World Weather Inc.
China may make July announcement to buy record volume of U.S. soybeans... The U.S. Soybean Export Council says the Chinese Ministry of Commerce may make a commitment to buy a record volume of U.S. soybeans when its officials are in Iowa next month. Members of the ministry, a delegation due to sign an accord in Des Moines on July 13, have discussed the possibility with the council’s top representative in China, said spokeswoman Lisa Humphreys of the council. A record commitment would exceed the 13.4MMT it agreed to buy in February 2012, also at a ceremony in Des Moines. The delegation will also tour U.S. farms and port facilities in places including Seattle, while a U.S. agricultural-trade delegation will visit China in September, according to the council.
EPA reportedly reevaluating proposed 2018 advanced biofuel mandate... Some in the oil industry have raised concerns regarding advanced biodiesel mandates and have lobbied the Environmental Protection Agency (EPA) to also lower cellulosic ethanol targets to better match production. This apparently led to a pullback announcement on Renewable Fuel Standard (RFS) volume requirements late last week, sources signal. The Office of Management and Budget reportedly had completed vetting the RFS proposal and initially authorized EPA to release proposed mandates. However, some sources speculate the delay could allow an announcement to coincide with President Donald Trump’s planned visit June 21 to Cedar Rapids, Iowa.
Chief ag trade negotiator for USTR announced… Greg Doud, a former Senate Agriculture Committee staffer with farm bill experience, is Trump’s pick to serve as chief agricultural negotiator for the U.S. Trade Representative’s Office. Doud is currently president of the Commodity Markets Council.
Budget work a focal point this week... Some agriculture/food policy cuts could be part of a GOP leadership budget proposal that could surfaced this week. If Republicans in the House concur, it could for the first time in years be able to pass spending bills without the help of Democrats. But even if the House GOP plan is approved, Senate Democrats would have leverage on the spending bills because Republicans lack the 60 votes required in that chamber to pass spending bills. Other focal points this week will include any additional details on Trump’s trade policy agenda, his trip to Iowa and the results of a Georgia House election. The battle to replace Republican Tom Price, Trump’s Health and Human Services secretary, has been the most expensive House race in history. Get more details.
Tax overhaul speech this week... House Speaker Paul Ryan (R-Wis.) plans to make a major speech on tax overhaul to the National Association of Manufacturers in Washington on Tuesday, as Ryan and his team mark the one-year anniversary of the unveiling of the “Better Way” blueprint.
U.S. beef a hot commodity in China... U.S. beef is in high demand in China now that the 14-year ban on the product has been lifted. “The number of inquiries to our exporters number in the hundreds, if not low thousands, since the announcement of the agreement,” says Joel Haggard, senior vice president for the U.S. Meat Export Federation in Asia-Pacific. China’s total beef demand has been sharply rising, and U.S. beef is expected to be a hit both in terms of quality and price. U.S. beef is expected to hold a price advantage to similar cuts of premium Australian meat because of low grain prices in the United States. But there are still some limits on Chinese beef buys, meaning American beef shipments will roll in slowly to start.
China still working to build its hog herd... China’s central Hunan province took delivery of 1,012 American boars on Sunday, signaling producers there continue to build herds. This comes despite talk of overcapacity and slowing demand that are expected to hurt profits next year. The hog imports are meant to improve the quality of the local breeding swine, according to Wang Xinwu, deputy head of the province’s inspection and quarantine bureau.
Futures start the week below cash cattle market... Futures start the week at a discount to last week’s cash cattle trade and near oversold territory, but momentum is on bears’ side. Traders will watch showlist numbers and boxed beef action before forming cash opinions for this week.
Traders on watch for signs of a top in the cash hog market... Traders expect the cash hog market to put in a seasonal top soon, which resulted in lean hog futures slipping slightly below the cash hog index last week. Higher cash hog bids have cut into packer profit margins. Any signs of retreat for the cash market would likely garner quite a bit of attention.
Weekend demand news... Jordan issued a new tender to buy 100,000 MT of animal feed barley and 100,000 MT of hard milling wheat from optional origins. Iran exported 35,000 MT of wheat to Oman last week.
Today’s reports:
- 10:00 a.m., Weekly Export Inspections -- AMS
- 2:00 p.m., Milk Production -- NASS
- 3:00 p.m., Crop Progress -- NASS
