Good morning!
Corn and wheat firmer, beans weaker this morning... Grains traded on both sides of unchanged overnight, though a modestly firmer tone has developed in the corn and wheat markets while soybeans have weakened. As of 6:30 a.m. CT, corn futures are fractionally higher, soybeans are 1 to 2 cents lower and wheat is mostly a penny higher. The U.S. dollar index is more than 200 points higher and front-month crude oil futures are about $1.00 higher this morning.
U.S. tariff uncertainties drive demand for Ukrainian corn... Potential tariffs by the incoming Trump administration has increased demand for Ukrainian corn, Hellenic Shipping News reported. While U.S. corn is the most economical option for European markets, traders have increasing concerns regarding potential tariffs and how that will impact global trade, encouraging more buyers to source corn from Ukraine. Some say a similar trend is emerging in Asian markets, particularly China. Traders anticipate more Asian demand for Ukrainian corn in early 2025.
Reuters: China considering weaker yuan as Trump trade risks loom... China’s top leaders and policymakers are considering allowing the yuan to weaken in 2025 as they brace for higher U.S. trade tariffs as Donald Trump returns to the White House, three people familiar with the situation told Reuters. The potential strategy reflects China’s recognition that it needs bigger economic stimulus to combat Trump’s threats of punitive trade measures. The tightly managed yuan is allowed to move 2% on either side of a daily mid-point fixed by the central bank. While the People’s Bank of China is unlikely to say it will no longer uphold the currency, it will emphasize allowing the markets more power in deciding the yuan’s value, one source.
Xi readies bargaining chips for U.S. trade war... China got a head start on a looming trade war with the U.S. by showcasing a new range of tools it’s prepared to use if Donald Trump makes good on his threat to punish the world’s second-biggest economy with tariffs, Bloomberg reports. Restrictions imposed this month by the Biden administration on China’s access to vital components for AI chips provoked Beijing into providing the world a preview of its targets in a second trade war. Days after the curbs, President Xi Jinping opened a probe into Nvidia Corp. and banned the export of several rare materials with military applications. Beijing has also limited sales to the U.S. and Europe of key components used to build drones. The retaliation appeared calibrated to threaten the U.S. without rocking the fragile bilateral relationship, or inviting blowback on China’s own economy. While Beijing appears to be bracing for battle, there are some in China who favor a softer response at a time when the economy is battling its longest streak of deflation this century and a housing crash about to enter a fourth year.
U.S. to hit Chinese cleantech imports with more tariffs... The U.S. Trade Representative’s Office will announce a doubling to 50% of the tariff on Chinese solar wafers and polysilicon today, and hit tungsten products with a 25% levy, the Financial Times reported, citing people familiar with the matter.
India lowers wheat stocks limit... India lowered the limit of wheat stocks that traders and millers can hold, the government said, in an effort to boost availability and moderate domestic prices that hit a record high this month. Traders can now hold only 1,000 MT of wheat, half of the previous allowance. The government has also tightened stock-holding limits for wheat processors to 50% of their monthly installed capacity.
Ag aid package talks continue in fluid situation... Farm-state officials continue to talk about a farm aid package along the lines we discussed Tuesday, including around $9 billion in direct payments for 2024 and another $1 billion for crop insurance rebates. Outgoing Senate Ag Chair Debbie Stabenow (D-Mich.) is pushing for specialty crop payouts and a budget baseline for her urban ag program. Once a final package is agreed, party leaders will have to sign on. All this, including one-year funding for so-called “orphan” programs, is part of extending the 2018 Farm Bill due to the inability of lawmakers to reach an agreement on a new measure. Last-minute changes are possible due to very liquid talks.
RFK Jr. meeting with lawmakers in busy schedule... Robert F. Kennedy Jr., President-elect Donald Trump’s nominee to lead the Department of Health and Human Services (HHS), has a packed agenda with nearly two dozen meetings on Capitol Hill. One key meeting includes the incoming leader of the Senate HELP Committee, which could oversee his confirmation hearing. Sen. Chuck Grassley (R-Iowa) noted plans to discuss Kennedy’s impact on the agricultural sector but stated that their meeting will wait until January. Of note: Kennedy continues to push people for key USDA roles under Brooke Rollins, Trump’s nominee to lead USDA. Mainstream ag lobbyists want production ag personnel in those top spots.
House passes WRDA... On Tuesday, the House passed the Water Resources Development Act (WRDA) of 2024 with overwhelming bipartisan support. This legislation authorizes vital projects for the U.S. Army Corps of Engineers to enhance water infrastructure across the nation. Key provisions included $9.8 billion for 160 feasibility studies and 12 new or modified construction projects, enhancements to ports, harbors, flood systems and water-related infrastructure. The Senate passed its version of WRDA 2024 unanimously on Aug. 1, authorizing $3 billion for 81 feasibility studies and 8 construction projects. Both versions now head to a conference committee to reconcile differences. Stakeholders are optimistic about a final bipartisan bill likely included in an end-of-year legislative package.
Trump appoints Ferguson as FTC chair... Donald Trump named Andrew Ferguson as the next chair of the Federal Trade Commission (FTC). Ferguson, currently one of the FTC’s two Republican commissioners, will not require Senate confirmation. Under outgoing chair Lina Khan, FTC has aggressively targeted big firms, especially tech giants and sought to block mergers. While Ferguson is expected to continue scrutinizing tech platforms, he is likely to adopt a more business-friendly approach toward other industries, including artificial intelligence. Trump stated that Ferguson would oppose “Big Tech censorship.”
Cash cattle trade steady... Light cash cattle trade started at roughly steady prices in the Southern Plains on Tuesday afternoon. The cash trade came much earlier in the week than anticipated and gives feedlots hopes packers may eventually raise cash bids again this week.
December hogs tracking cash index ahead of expiration... The CME lean hog index is down another 13 cents to $83.33 as of Dec. 9. December lean hog futures finished 40.5 cents below that level on Tuesday and will continue to keep a close relationship ahead of Friday’s contract expiration. February lean hog futures faced heavy selling yesterday but still finished $1.245 above today’s cash quote.
Overnight demand news... Thailand purchased 65,000 MT of feed wheat from an unspecified origin. South Korea tendered to buy 50,000 MT of optional origin non-GMO soybeans. Jordan tendered to buy up to 120,000 MT of optional origin wheat. Japan tendered to buy 65,000 MT of feed wheat and 25,000 MT of feed barley.
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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Feed Grains Database — ERS
- 11:00 a.m. Meat Price Spreads — ERS
- 2:00 p.m. Dairy Monthly Tables — ERS
- 2:00 p.m. Season Average Price Forecasts — ERS
- 2:00 p.m. Wheat data — ERS
- 2:00 p.m. Broiler Hatchery — NASS