Good morning!
Another lightly traded overnight session for grains... Corn and wheat futures pivoted around changed in light overnight trade, while soybeans favored the downside. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are 3 to 4 cents lower and wheat is mostly 1 to 2 cents higher. The U.S. dollar index is anchored near unchanged and front-month crude oil futures are around 50 cents higher.
Congressional deadline approaches for final spending bill negotiations... Congressional leaders are “racing” to finalize a comprehensive legislative package before today’s deadline to ensure time for drafting and posting over the weekend. The stopgap spending bill proposes extending the current resolution deadline from Dec. 20 to March 14, providing a window for negotiations on fiscal year 2025 appropriations with the incoming Trump administration.
Farm bill extension stalled amid conservation, farmer aid disputes... As Congress races against the clock to finalize a farm bill extension, negotiations are stalled over conservation funding and economic aid for farmers. Disagreements center on reallocating conservation funds from the 2022 Inflation Reduction Act and providing $9.8 billion in economic relief for farmers. Lawmakers face a Dec. 20 deadline to attach the extension to a continuing resolution before the current one expires, avoiding a reversion to outdated farm laws from the 1930s. While Democrats have proposed reallocating funds to support struggling farmers, Republicans remain divided. There is some GOP pushback on making the conservation funds part of permanent new mandatory spending.
China posts record grain production... China’s total grain production reached a record of 706.5 MMT this year, the National Bureau of Statistics said, up 1.6% from last year. The corn crop was a record 294.92 MMT, up 2.1% from last year. Rice production rose 0.5% to 207.5 MMT, while wheat output grew 2.6% to 140.1 MMT. Soybean output fell 0.9% to 20.65 MMT. The bumper harvest was attributed to larger plantings of rice and corn, on top of better yields of rice, wheat and corn.
Ukraine’s grain crop a little bigger than previously expected, exports to fall sharply... Ukraine’s grain production could total around 55 MMT, up 1 MMT from the previous outlook, Ukrainian Agriculture Minister Vitaliy Koval said. Koval said Ukraine’s exportable surplus for 2024-25 will be 40.3 MMT, including 20.5 MMT of corn, 16.2 MMT of wheat and 2.9 MMT of barley, down from 51 MMT last year. As of Dec. 13, Ukraine had exported 19.4 MMT of grain, including 9.2 MMT of wheat, almost 8 MMT of corn and 1.9 MMT of barley.
GIWA raises Western Australian wheat production forecast... The Grain Industry Association of Western Australia (GIWA) raised its estimate for wheat production in the state, saying yields from the ongoing harvest continued to exceed expectations. Western Australia is now on track to produce 10.MMT of wheat, GIWA said in its monthly crop report, up 495,000 MT from its prior forecast. Wheat protein levels are low across the state due to dilution from the high yields, GIWA said. GIWA also raised its estimates for barley production to 5.087 MMT from 4.52 MMT a month ago and for canola to 2.83 MMT from 2.59 MMT.
Argentina’s top corn growing province in need of rainfall for planting... Corn planting is on hold in parts of Cordoba, Argentina’s top corn producing province, due to a lack of rain, the Buenos Aires Grain Exchange said. Planting has progressed “satisfactorily” in some areas of Cordoba, including Tercero Arriba, General San Martin, but the rest of the province is suffering from a lack of adequate rainfall. The exchange said corn planting was 56% done, with 98% of areas planted in normal or excellent condition. The exchange said soybean planting stood at 65%. Wheat harvest reached 64%.
Canada considering export taxes on key commodities... Canada is considering implementing export taxes on major commodities, including uranium, oil and potash, as a potential response to incoming President Donald Trump’s threat to impose broad tariffs. This move by the Canadian government is part of a strategic plan to counter possible trade tensions with the United States.
Agriculture industry starts talks with Trump team on tariffs, immigration... The U.S. agriculture industry has started talks with Donald Trump’s transition team in a bid to advocate for the sector as the president-elect pledges tariffs and mass deportations. Groups including the National Grain and Feed Association and the International Fresh Produce Association were among those involved in the discussions, people with the situation told Bloomberg. The National Council of Agricultural Employers also has a meeting scheduled. Some industry advocates are lobbying for the expansion of a visa program for temporary workers, and others want China to stick to crop purchases pledged during the Phase One trade deal negotiated by Trump in his previous term, the sources noted. One possible solution being touted by industry groups is convincing China to stick to the $50 billion a year in ag purchases it pledged during the Phase One deal, while also having the Asian country approve crop traits that would give U.S. supplies better access to the Chinese market. Railroad inspection delays at the border with Mexico and the European Union’s Deforestation Regulation are also among topics of interest for the industry.
Trump trade adviser warns China against currency manipulation... Peter Navarro, President-elect Donald Trump’s incoming senior counselor for trade and manufacturing, told Reuters the new administration would not look “fondly” on any attempt by China to manipulate its currency. Navarro added, “The history of China as a currency manipulator is well known.” On Wednesday, Reuters reported China’s top leaders and policymakers are considering allowing the yuan to weaken in 2025 as they brace for higher U.S. trade tariffs. Navarro said Trump could choose to escalate tariffs even further if China weakens its currency, rather than waiting for the biannual Treasury report into whether foreign trade partners are manipulating their currencies.
China’s credit growth unexpectedly slows despite stimulus effort... China’s aggregate financing, a broad measure of credit, increased 2.34 trillion yuan, according to Bloomberg calculations based on data released by the People’s Bank of China, down from 2.5 trillion yuan in the same month a year ago. Chinese banks extended 580 billion yuan ($79.72 billion) in new yuan loans in November, up from 500 billion yuan in October but well below 1.09 trillion yuan last year. New yuan loans totaled 17.1 trillion yuan for the first 11 months of the year.
China’s plunging bond yields draw Japan comparisons... China’s falling bond yields are drawing comparisons to Japan’s deflationary struggles following its 1990s real estate crash. After a Politburo pledge of aggressive monetary easing, the yield on China’s 10-year bonds hit a historic low of 1.77%, with speculation it could fall to 0%. However, investor skepticism remains as Chinese stocks dropped sharply amid vague details on fiscal stimulus plans.
North Dakota greenlights CO2 storage for Summit pipeline... North Dakota’s Industrial Commission unanimously approved a plan allowing Summit Carbon Solutions to store millions of tons of carbon dioxide underground, despite objections from some landowners. The project, utilizing a pipeline network across five states, will gather carbon emissions from ethanol plants and inject them into geological formations west of Bismarck. Meanwhile, the Minnesota Public Utilities Commission unanimously approved a permit for Summit Carbon Solutions to construct a 28-mile pipeline to transport pressurized carbon dioxide running from an ethanol plant in Fergus Falls to the North Dakota border. The company still awaits permits in South Dakota and Nebraska. While Summit plans to rely on federal tax credits to finance the project, concerns remain about its long-term viability if those incentives are revoked by Congress.
Wholesale beef strengthens... Wholesale beef prices firmed $4.01 for Choice to $315.24 and $2.37 for Select to $280.48 on Thursday. The price strength ended three days of declines for Choice beef. Even with yesterday’s wholesale beef strength, packer margins dropped further into the red this week as cash prices posted strong gains.
Cash hog index firms, pork cutout weakens... The CME lean hog index is up 30 cents to $83.91 as of Dec. 11, the second straight daily gain. December lean hog futures, which expire today and will be settled against the index early next week, finished Thursday 36 cents below that level. The pork cutout fell 56 cents on Thursday to $92.31.
Overnight demand news... South Korea purchased 50,000 MT of non-GMO soybeans.
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
- 11:00 a.m. Feed Grains: Yearbook Tables — ERS
- 2:00 p.m. Cost of Pollination — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Turkey Hatchery — NASS
- 2:30 p.m. Commitments of Traders — CFTC