Good morning!
Grains quiet ahead of USDA’s reports... Corn, soybeans and wheat held in tight trading ranges during the overnight session as traders await USDA’s December crop reports later this morning. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny lower, soybeans are around a penny higher and wheat futures are 2 to 4 cents lower. The U.S. dollar is around 250 points higher and front-month crude oil futures are about 35 cents lower this morning.
Modest changes expected in December crop reports... USDA will update its cotton production estimate in the Crop Production Report at 11:00 a.m. CT, but there will be no updates to the corn and soybean crops this month. Modest changes are expected to 2024-25 ending stocks, with the average estimates at 1.906 billion bu. for corn (1.938 billion bu. in November), 469 million bu. for soybeans (470 million bu. in November), 814 million bu. for wheat (815 million bu. in November) and 4.23 million bales for cotton (4.30 million bales in November).
Cordonnier leaves South American crop estimates unchanged... South American crop consultant Dr. Michael Cordonnier kept his Brazilian production estimates at 170 MMT for soybeans and 125 MMT for corn with a neutral to higher bias toward both crops. For soybeans, he noted crop conditions are generally favorable and if weather remains beneficial his estimate could move higher. For corn, Cordonnier said improved domestic prices could encourage more safrinha acres. Cordonnier kept his Argentine crop estimates at 57 MMT for soybeans and 48 MMT for corn with a neutral bias toward both.
China imports fewer soybeans than expected in November... China imported 7.15 MMT of soybeans in November, down 940,000 MT (11.6%) from the previous month and 770,000 MT (9.7%) less than last year. Through the first 11 months of the year, China imported 97.09 MMT of soybeans, up 9.4% from the same period last year.
China lowers corn crop, raises soybean and cotton production... China cut its 2024 corn crop by 3.17 MMT to 293.84 MMT, though still up 5 MMT from last year. The ag ministry raised soybean production 110,000 MT to 20.65 MMT and cotton output 180,000 MT to 5.9 MMT. The ministry left its 2024-25 import forecasts unchanged for corn and soybeans at 13 MMT and 94.6 MMT, respectively. Corn imports are expected to fall 10.41 MMT (44.5%), while soybean imports are projected to decline 7.69 MMT (7.5%) from last year. The ministry cut cotton imports 300,000 MT to 1.7 MMT, which would be down 1.55 MMT (47.7%) from last year.
China’s November trade data disappoints... China’s exports rose 6.7% from year-ago to $312.31 billion in November, falling sharply from a more than two-year high of a 12.7% surge the previous month. Still, it marked the eighth consecutive month of expansion in outbound shipments, as some manufacturers front-loaded orders in anticipation of further tariffs, notably from the U.S. under the second Trump administration. Imports dropped 3.9% to $214.87 billion, the second straight monthly decline and the steepest drop in nine months. That left China with a trade surplus of $97.44 billion, the largest since June. The trade surplus with the U.S. widened to $34.9 billion from $33.5 billion in October.
India sugar output to rebound to record next year; could revive exports... India is likely to produce a record amount of sugar in the next marketing year from October after millions of farmers expanded cane cultivation, encouraged by ample water supplies and declining prices of competing crops, farmers and industry officials told Reuters. The rebound in production would allow the world’s second-largest sugar producer to resume exports in 2025-26, they said, after a lack of rain cut cane yields and led to two years of restrictions.
USDA advances rule on climate-smart ag for biofuels... USDA submitted an interim final rule to the Office of Management and Budget (OMB) concerning technical guidelines for climate-smart agricultural practices for biofuel feedstocks. Based on earlier public feedback, the rule aims to establish voluntary standards for quantifying and verifying greenhouse gas (GHG) reductions in crops like corn, soybeans and winter oilseeds. It aligns with the Biden administration’s Clean Fuel Production Credit (45Z) initiative, targeting sustainable practices such as no-till farming, cover crops and improved nitrogen management. The standards may support U.S. clean fuel policies and emerging environmental service markets under the 2008 Farm Bill authority. USDA said it considers corn, soybeans, sorghum and spring canola as “the dominant biofuel feedstock crops” and is “considering winter oilseed crops (brassica carinata, camelina, pennycress and winter canola)” and sought feedback on whether biofuel feedstocks exist that should be analyzed as part of the effort, including crops, crop residues and biomaterials.
China’s meat imports rise in November... China imported 581,000 MT of meat in November, up 46,000 MT (8.6%) from the previous month and 24,000 MT (4.3%) more than last year. Through the first 11 months of this year, China imported 6.06 MMT of meat, down 11.2% from the same period last year.
Cash cattle climb, wholesale beef stabilizes... The average cash cattle price firmed 93 cents to $190.90 last week, the highest level since early August. Wholesale beef prices firmed $2.10 for Choice to $314.14 and $2.61 for Select to $279.34 on Monday. While beef prices have stabilized, packer margins remain solidly in the red, which has traders anticipating recent cash market strength will be short-lived.
Cash hog index continues to decline... The CME lean hog index is down another 27 cents to $83.46 as of Dec. 6, extending the seasonal slide. December lean hog futures, which expire Friday and are settled against the cash index on Dec. 17, finished 56 below today’s cash quote. February lean hog futures hold around a $3.00 premium to the cash index.
Overnight demand news... Jordan passed on a tender to buy up to 120,000 MT of optional origin milling wheat. Japan is seeking 112,889 MT of milling wheat via its weekly tender. Thailand tendered to buy 120,000 MT of optional origin feed wheat.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
- 8:00 a.m. America’s Farms and Ranches at a Glance: 2024 Edition — ERS
- 11:00 a.m. Crop Production — NASS
- 11:00 a.m. WASDE — WAOB
- 11:00 a.m. Cotton Ginnings — NASS
- 11:15 a.m. Cotton: World Markets and TradeFAS
- 11:15 a.m. Grains: World Markets and TradeFAS
- 11:15 a.m. Oilseeds: World Markets and TradeFAS
- 11:15 a.m. World Agricultural ProductionFAS