Good morning!
Firmer tone for corn and beans to close the overnight session... Corn futures are fractionally to a penny higher after holding to a narrow range overnight. Soybeans faced pressure earlier in the overnight session, but the market is currently trading high-range and steady to fractionally higher. SRW wheat futures are around a penny lower, while HRW and HRS wheat are narrowly mixed. The U.S. dollar index and crude oil futures are both marginally higher.
Cool temps expected across nation’s midsection, with varied precip... The National Weather Service Outlook for May 29 to June 2 calls for cool conditions across the Corn Belt and Plains, with varied precipitation. Wet weather is expected across the Central and Southern Plains, and much of the eastern Corn Belt. Dry conditions are likely for much of the western Belt. Cool temps signal it will take time for soils to dry out enough for farmers to return to the fields after recent rains. But so far this season, they have done a good job aggressively planting in between showers.
Moody’s cuts China’s credit rating... Moody’s Investors Service cut its rating on China’s debt for the first time since 1989, saying the outlook for its financial strength will worsen. It raised some concern Chinese firms may face higher overseas borrowing costs, forcing them to raise more financing at home and squeeze market liquidity. Moody’s also cited the likelihood of a “material rise” in economy-wide debt and the burden that will place on the state’s finances, while also changing the outlook to stable from negative. China’s Ministry of Finance said Moody’s downgrade was “absolutely groundless” and the ratings company underestimates the government’s ability to deepen reform and boost demand.
Perdue to appear before House ag appropriators... Ag Secretary Sonny Perdue will appear before House ag appropriators this morning, where he will field questions about President Donald Trump’s budget proposal that included steep cuts to farm subsidies. Questions will also likely arise regarding USDA’s recent reorganization and how the budget proposals impact the plan. The focus in part will be on rural development changes.
Wet weather causing problems for Canadian growers... Heavy rains are in the forecast for the Canadian Prairies provinces of Alberta and Saskatchewan today and tomorrow, which will likely extend delays planting the nation’s canola and other spring crops. Concerns about the delays are mounting given that crop insurance planting deadlines lie in the near future. This comes after soggy conditions from fall into spring prevented farmers from harvesting all of their canola and wheat crops.
Turkey again limiting imports of some Russian commodities... Turkey is again restricting imports of wheat from Russia, possibly in response to remaining limits on supplies of some vegetables from Turkey to Russia, according to a Kremlin spokesman Dmitry Peskov. The state news agency RIA reports Turkey has also introduced quotas limiting sunflower oil imports.
Bunge shoots down talks of a merger with Glencore... Yesterday, reports circulated that Glencore Plc, the Swiss mining and commodities group, had made a takeover approach to U.S. grains trader Bunge Ltd. No such talks are underway, Bunge said in response to the rumors. Glencore also clarified that it had made an informal approach to discuss “a possible consensual business combination.”
Online auction to provide cash direction... Traders will watch today’s online Fed Cattle Exchange auction for some additional cash market insight. Last week, the average top price at the auction was $135.16, which led to cash action on the Plains mostly falling in a range from $133 to $135. Futures are trading well below those prices, signaling traders’ bias. But packers are enjoying wide profit margins of more than $150 a head and showlist numbers are down sharply this week.
Packers up bids as pork movement surges... Cash hog bids strengthened on Tuesday, signaling that some packers may still be in need of supplies for this weekend’s kill and/or that they are buying ahead. This week’s kill is running a bit ahead of week-ago and around 8,000 head in advance of year-ago as packers’ strong profit margins give them plenty of reason to keep kill lines full. Also of note, pork movement was impressive yesterday at 401.97 loads, despite pork prices nearing the $90.00 per cwt. mark.
Overnight demand news... Jordan made no purchase in its tender to buy 100,000 MT of milling wheat. Japan’s ag ministry received no offers in its simultaneous buy and sell auction to buy 200,000 MT of feed barley and 120,000 MT of feed wheat.
Today’s reports:
- 9:30 a.m., Weekly Ethanol Production -- EIA
- 2:00 p.m., Broiler Hatchery -- NASS
