Pro Farmer's First Thing Today: CRP Enrollment, Biden Kicks Off Climate Summit and More
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Good Morning farm country. Davis Michaelsen here with your morning update for Thursday, April 22. From Pro Farmer’s First Thing Today, these are some of the stories we are watching this morning:
Corn futures hit new contract highs overnight and the market is currently trading high-range and up 3 to 6 cents, with old-crop leading. The market is at its highest level since July 2013. Soybean futures also climbed to new highs overnight with futures currently up 13 to 18 cents. Old-crop contracts are leading gains, and the front-month is at its highest level in seven years. Winter wheat futures are 7 to 8 cents higher, while spring wheat is up 9 cents. SRW and HRS wheat are registering new contract highs. The U.S. dollar index is under light pressure, as are crude oil futures.
Chinese buyers have reportedly bought at least 500,000 MT of new-crop French wheat for shipment between July and September, with some saying the purchase could be as high as 1 MMT. The news reminds of tight feed supplies within China.
Ag Secretary Tom Vilsack announced USDA will open enrollment in the Conservation Reserve Program (CRP) with “higher payment rates, new incentives, and a more targeted focus on the program’s role in climate change mitigation.” It didn’t take long for commodity traders to wonder if this is the first of several steps by Democrat-controlled USDA and the Biden administration to boost the idling of acres by a significant amount, despite tight carryovers of some key crops.
President Joe Biden, beginning at 7:00 a.m. CT, kicks off a two-day virtual climate summit aimed at jump-starting negotiations for a global deal to curb emissions worldwide.
California Democratic Governor Gavin Newsom, standing at a parched Lake Mendocino, declared a drought emergency in Sonoma and Mendocino counties. The governor has been under pressure from some to declare a statewide drought emergency but has balked at such a move.
Chinese hog producer Wens Foodstuff Group yesterday reported a 71% dive in first quarter earnings, despite gains from the poultry side of its business. And the country’s No. 2 and its No. 4 hog producers also issued profit warnings last week.
Tyson Fresh Meats is now a member of the U.S. CattleTrace, a program formed by a number of state cattlemen’s organizations aimed at developing a national infrastructure for animal disease traceability in the U.S. cattle industry. The group uses ear tags with ultra-high frequency technologies to do so.
Cattle futures came under heavy pressure at midweek, with futures divorcing themselves from action in the product market. Boxed beef values continue to soar, and prices are at their second highest levels on record. An uptick in cow processing has sparked some concerns about an abundance of ground beef, and rising feed prices have caught the market’s attention.
Lean hog futures faced pressure on Wednesday, with rising feed costs grabbing the market’s attention. The market is also on edge ahead of another USDA update on weekly pork exports. Last week’s report featured a major slowdown in pork exports, particularly to China.
