Good morning!
Lower tone overnight... Corn futures faced pressure throughout the overnight session and as of 6:30 a.m. CT the market is 1 to 2 cents lower. Soybean futures are trading midrange with similar losses. Winter wheat futures are down 3 cents, while spring wheat is up a penny in most contracts. The U.S. dollar index is again posting strong gains, while crude oil futures are holding near unchanged.
Warm but wet forecast for western Corn Belt to start October... A frost advisory is in effect for southwest South Dakota and northwest Nebraska today, but concerns are limited since the bulk of a slow-developing crop made it to the end of September without a major frost/freeze threat. Flood warnings are also in effect for western and central areas of Texas. Looking ahead, the National Weather Service forecast for Oct. 2-6 calls for warm temperatures across the Midwest and Plains. Wet weather is expected across the western Corn Belt and into Wisconsin and the northwest half of Illinois. The rest of the eastern Corn Belt should see normal to below-normal rainfall. Wet weather is also likely on the Central and Southern Plains over this timeframe, which should help establish the winter wheat crop.
Rapid planting of winter grain in Russia and Ukraine... Farmers in Ukraine and Russia plan to seed about as many winter grain acres as in the previous season and planting progress is running ahead of year-ago in both countries. The quick planting pace paves the way for Russia’s total area to match or surpass last year’s big winter grain sowing area, possibly leading to “a repeat of a high [Russian] wheat crop in 2018" if weather is favorable, the ag consultancy SovEcon said in a note. Meanwhile, UkrAgroConsult reports, “Weather conditions in most Ukrainian regions are better than year-ago and this will allow farmers to complete sowing within an optimum period.”
Tax reform framework ideas to be presented today... Republican congressional leaders will join President Donald Trump in announcing a broad outline of their plan to overhaul the business and individual tax codes. Ag industry stakeholders will pay close attention, and will have an Indiana farmer, Kip Tom, join Trump when he goes to Indianapolis today to announce the plan.
EPA considers cutting biodiesel blending requirements... Yesterday, the U.S. Environmental Protection Agency (EPA) said it was seeking comment on a proposal to cut 2018 biodiesel blending requirements under the Renewable Fuel Standard. EPA explained that a possible decline in biodiesel imports could raise domestic prices, causing major economic harm. Therefore, the agency is considering issuing waivers to those required to blend biodiesel. EPA has already (in July) proposed cuts to the blending volumes for biomass-based diesel and advanced biofuel, and that was before the Commerce Department hiked duties on biodiesel from Argentina and Indonesia. The National Biodiesel Board said it was disappointed by the request for comment, noting that existing biodiesel capacity of more than 4 billion gallons was sufficient for meeting blending requirements for around 2 billion gallons.
Moore wins in Alabama... Roy Moore, a feisty former chief justice of Alabama’s Supreme Court, defeated Luther Strange in the runoff to be the Republican candidate for one of Alabama’s Senate seats on Tuesday. Trump and other party leaders had backed Strange. Trump deleted several tweets supporting Strange after the result was announced. Impact: Far-right conservatives and populists in the GOP will set their sights on additional Senate and House races, including in Tennessee where on Tuesday Sen. Bob Corker (R-Tenn.) said he would not seek re-election.
Cotton ginning cost-share payment being reviewed at OMB... The Office of Management and Budget (OMB) is contemplating another cotton industry payout. The Obama administration made a similar payment for 2015 when then-Agriculture Secretary Tom Vilsack concluded that he did not have the legal authority to make cottonseed eligible for the Price Loss Coverage program.
Beef price rally slows movement... Boxed beef values climbed $2.22 (Select) to $2.82 (Choice) on Tuesday and both cuts are up sharply for the week. But the price rise has come at the expense of movement. Packers moved just 105 loads yesterday versus 151 loads the week prior. This raises concerns that the product market may be nearing a top.
Big kill numbers to start the week... Packers slaughtered a daily record of 460,000 hogs on both Monday and Tuesday, helping this week’s kill to run ahead of last week’s impressive tally. But even so, cash hog prices have considered to slip. But average hog weights in the Iowa/southern Minnesota market slipped 0.1 lbs. the week ending Sept. 23 signaling demand may finally be catching up to supply.
Overnight demand news... Jordan made no purchase in its tender to buy 100,000 MT of barley. Japan’s ag ministry received no offers for feed-quality wheat or barley in its simultaneous buy and sell auction to purchase 120,000 MT and 200,000 MT of these grains, respectively.
Today’s reports:
- 9:30 a.m., Weekly Ethanol Production -- EIA
- 2:00 p.m., Livestock & Meat Domestic Data-- ERS
- 2:00 p.m., Broiler Hatchery-- NASS
