Pro Farmer's First Thing Today: Expanded Price Limits For Grain Futures, 30x30 Proposal and More
Get more daily market reports from Pro Farmer, start a free trial here.
Good Morning farm country. Davis Michaelsen here with your morning update for Friday, April 23. From Pro Farmer’s First Thing Today, these are some of the stories we are watching this morning:
Corn futures are down 5 to 10 cents after yesterday’s runup to another round of contract highs. Daily price limits expand to 40 cents for corn futures after yesterday’s limit-higher close. Soybeans are posting losses of 2 to 8 cents. Both corn and soybean futures are at their highest levels since 2013. SRW wheat futures are 6 to 7 cents lower, while HRW and HRS wheat futures are down 3 to 4 cents. Crude oil futures are slightly higher. The greenback is slightly lower.
The CME Group announced that after a routine biannual review, it has decided to expand daily price limits for Chicago Board of Trade grain and soy futures. The new limits will take effect May 2.
Cargill Inc. announced it will build a new, $350-million canola plant in Regina, Saskatchewan, hoping to profit from the recent surge in demand for oilseeds. Rising consumer demand for vegetable oils has pushed prices for many oilseeds to new highs, and a surge in demand for renewable diesel is being likened to the ethanol boom.
The ag consultancy IKAR lowered its forecast for Russia’s 2021 wheat crop from 81 MMT to 79.5 MMT, noting that farmers will need to resow wheat across a large area of Russia’s central region after the winter.
U.S. farmers want President Joe Biden to explain his 30x30 proposal and think USDA Secretary Vilsack is using “voluntary” as an escape word to avoid growing concern doubts about the executive action proposal.
President Biden in the next few days will unveil new tax rates for the wealthiest Americans. He’s expected to propose a top marginal income tax rate of 39.6% and a capital gains rate of 43.4%. Congressional Democrats have separately proposed a series of changes to capital gains taxation, including imposing the levies annually instead of when they are sold.
Other measures that the administration has discussed in recent weeks include enhancing the estate tax for the wealthy. Biden wants to impose so-called "stepped up basis" for accounting purposes, and value assets when they are passed on to an heir, not at their original cost.
Frozen beef stocks fell roughly 28.9 million lbs. during March, which was nearly double the five-year average drawdown for the month, yesterday’s Cold Storage Report showed. In addition, weekly beef export sales of 24,600 MT were up 38% from the previous four-week average and boxed beef values extended their historic runup. But cattle traders ignored these positive demand signals and pushed futures aggressively lower ahead of today’s Cattle on Feed Report.
Yesterday’s Cold Storage Report showed a drawdown in frozen pork stocks of 31.6 million lbs. during March, which was double the five-year average decline for the Feb. 28 to March 31 timeframe. The pork cutout value rose on Thursday and is now up $2.61 for the week as cash hog bids continue to climb.
