Pro Farmer's First Thing Today: Ag Outlook Forum Begins, Oil Price Recovery and More
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Good Morning farm country. Davis Michaelsen here with your morning update for Thursday, February 18. From Pro Farmer’s First Thing Today, these are some of the stories we are watching this morning:
Corn futures are down a 1 to 3 after a quiet overnight session. Old-crop soybeans are 3 to 5 cents lower, while new-crop futures are mixed. Winter and spring wheat futures are up 1 to 4 cents. Crude oil futures continue to climb, and the U.S. dollar index is under light pressure. Mainland China markets reopened Thursday after being closed several days for the Lunar New Year.
USDA’s two-day Ag Outlook Forum gets started today. The theme of this year’s virtual event is “Building on Innovation: A Pathway to resilience.” A focal point is USDA’s initial 2021-22 balance sheets. Planted acreage projections will be released today, with full new-crop balance sheets coming Friday morning.
Argentina’s government is looking into reports consumer firms have deliberately reined in production as the government worked to hold down prices. The government previously issued resolutions such firms should increase output to the “highest degree of their installed capacity,” and capped prices on some goods.
Consumers used stimulus checks to boost retail spending in January to its largest increase in seven months, a significant jump that comes as manufacturers continued to increase output and employers resumed hiring. Retail sales jumped a seasonally adjusted 5.3% in January from a month earlier, and manufacturing output neared pre-pandemic levels.
In a sign of growing confidence over an oil-price recovery, the world’s largest oil exporter said it will reverse a recent big production cut in April. Oil prices returned to pre-pandemic levels recently as vaccination programs make progress.
Malaysia’s Sime Darby Plantation, the world’s largest planter of palm oil, expects Malaysian and Indonesian output to recover in 2021, with the company’s managing director indicating “I expect not less than what we achieved in 2019.” The company also expects prices to remain high.
The Senate Environment and Public Works Committee scheduled a hearing on transportation infrastructure on Feb. 24, titled “Building Back Better: Investing in Transportation while Addressing Climate Change, Improving Equity, and Fostering Economic Growth and Innovation.” Chair Tom Carper (D-Del.) said last week he was planning a hearing on the reauthorization of the federal surface transportation programs that will include “a strong climate title.”
The Biden administration is revamping a key infrastructure grant program to prioritize projects that address climate change and racial equity. The Transportation Department included the new criteria in its announcement yesterday that it will award $889 million in grants to major freight and highway projects in fiscal 2021 through the Infrastructure for Rebuilding America program.
Processing demand will be clipped this week given that a number of meat plants on the Plains have had to reduce processing or close altogether due to the Arctic blast and related natural gas shortages. That gave cattle traders incentive to pare some of futures’ premium to the cash market at midweek. The situation has also pushed boxed beef prices higher.
Average hog weights in the Iowa/southern Minnesota market fell another 1.1 lbs. to 287.2 lbs. the week ending Feb. 13, which is 1.9 lbs. above year-ago levels. Cold temperatures have limited animal weight gain and processing.
