Strong followthrough in beans overnight... Soybean futures sharply extended yesterday's strong gains overnight with old-crop contracts surging to contract highs. As of 6:30 a.m. CT, old-crop soybeans are trading 16 to 20 cents higher, while new-crop contracts are 7 to 9 cents higher. Corn futures are trading 1 to 2 cents lower, SRW wheat futures are narrowly mixed, HRW wheat futures are mostly 2 to 4 cents lower and HRS wheat futures are steady to 2 cents lower. The U.S. dollar index is under light pressure this morning.
Freeze hits SRW areas overnight... Sub-freezing temps were seen through northern SRW wheat production areas overnight with the lowest readings in Ohio. It will take at least a week to gauge any impacts, but damage should be relatively minimal for most areas as the SRW crop was in much better condition than HRW wheat to handle and rebound from this freeze event.
Chinese corn acres to increase slightly... Chinese producers intend to increase corn plantings by 1.75% this year, according to a survey of 110,000 farmers conducted by the China's National Bureau of Statistics (NBS). The survey found rice plantings are likely to increase 0.15%, while wheat seedings are expected to decline 0.56%. Chinese producers intend to plant 6.77% less area to cotton this year based on the survey. NBS gave no indication of soybean planting intentions.
Japan culls 112,000 chickens in bird flu battle... Japan has culled 112,000 chickens to combat its first outbreak of bird flu in three years, officials said. Japanese officials confirmed that it is an H5 strain of avian influenza and has prompted the country to engage a "high alert" on the situation. "We will do our best to contain the outbreak as quickly as possible," said Japanese Agriculture, Forestry and Fisheries Minister Yoshimasa Hayashi. The outbreak was discovered in the Kumamoto prefecture and authorities there banned the transport of eggs and chickens located within 3 kilometers (nearly 2 miles) of the infected farm. Importantly, the prefecture where the outbreak happened is next to the Kagoshima and Miyazaki prefectures, rated the top two chicken producing prefectures based on value.
Chinese GDP falls to 18-month low... China's first quarter gross domestic product (GDP) slipped to 7.4% over year-ago from a 7.7% rise in the fourth quarter of 2013. But that came in a tick better than economists were anticipating. Meanwhile, Chinese industrial output rose less than expected at 8.8% over year-ago in March, while retail sales increased slightly more than expected at 12.2%. Imminent measures by the Chinese government to boost economic growth beyond recent "mini-stimulus" efforts are not anticipated, but if economic data remains sluggish more aggressive steps are likely.
ADM announces strategic business plans... ADM will acquire the remaining 20% minority stake in Alfred C. Toepfer International (Toepfer), the company announced Tuesday. Since 2002, ADM has owned 80% of Toepfer; InVivo has held the remaining 20% since 2010. ADM also signed an agreement to sell its fertilizer business in Brazil and Paraguay to Mosaic and will also pursue the sale of its chocolate business.
PEDV the main factor USDA cites for forecast drop in 2014 pork output... U.S. pork production is forecast to decline around 2% in 2014 with the decline "largely" due to the porcine epidemic diarrhea virus (PEDV) situation, according to USDA’s Economic Research Service. While noting producers intend to boost farrowings, USDA says PEDV "will likely impact pigs per litter in the second quarter, resulting in continued declines in the March-May pig crop." USDA notes there is no "known cure" for PEDV and the industry is combating it "through enhanced biosecurity measures, supportive care of affected piglets, and controlled exposure of not-yet-afflicted animals to the disease."
Wholesale beef market shows initial signs of stabilizing... Boxed beef prices were higher yesterday and movement was improved at 181 loads, suggesting prices may have fallen far enough recently to attract fresh value buying. Unless packers get nervous about supplies after the Easter holiday, however, they are unlikely to pay steady to firmer prices for cash cattle in the Plains this week as the product market is not yet showing strong signs of a bottom and they are working with highly negative cutting margins.
Pork cutout continues to fall... The drop from the recent all-time high in wholesale pork prices continued Tuesday, with the cutout value down $2.26 on losses in all cuts except butts. While movement improved to 347.48 loads, the price drop gives packers no incentive to actively bid for cash hogs, especially with downtime planned for most plants around Easter.
Overnight demand news... Exporters reported no tenders or purchases.