Good morning!
Wheat and corn lower, beans higher overnight... SRW wheat futures fell to contract lows overnight, while HRW and HRS contracts held above their recent lows. Corn followed wheat to the downside, while soybeans posted mild corrective gains. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 1 to 2 cents higher, SRW wheat is 6 to 8 cents lower, HRW wheat is 4 to 5 cents lower and HRS wheat is 3 to 4 cents lower. The U.S. dollar index and front-month crude oil futures are both modestly lower this morning.
Trump pushes shutdown showdown, undermines bipartisan deal... The bipartisan funding deal negotiated by House Speaker Mike Johnson (R-La.) is dead amid opposition from President-elect Donald Trump and Vice President-elect JD Vance, escalating the likelihood of a pre-Christmas government shutdown. Some of the programs could be resurrected but nothing is certain at this stage. Criticizing the bill for favoring Democratic priorities, Trump and Vance urged Republicans to tie spending measures to a debt ceiling increase, labeling any compromise as a “betrayal of our country.” One possible option: A clean continuing resolution (CR) that runs until sometime after Christmas, then Congress could return to finalize whatever can be agreed to that holds, likely including disaster aid and perhaps the farmer aid language, and an extension of the 2018 Farm Bill. Other provisions in the prior CR package, including year-round E15 are dead. Maybe they can be enacted in the next Congress. Trump indicated he was open to including farm aid in a stripped-down bill if it omitted “Democrat giveaways” and raised the federal debt limit.
Weekly Export Sales Report out this morning... For the week ended Dec. 12, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) | |
| Corn | 800,000-1,600,000 | 946,863 |
| Wheat | 225,000-550,000 | 290,236 |
| Soybeans | 825,000-2,000,000 | 1,173,811 |
| Soymeal | 150,000-350,000 | 176,324 |
| Soyoil | 5,000-60,000 | 63,846 |
Strategie Grains expects big jump in EU wheat production... European Union soft wheat production could rise 11% in 2025-26 in a rebound from a 12-year low, Strategie Grains said. In its first production forecast for next season, the firm projected output of soft wheat at 126.6 MMT, up from 114.2 MMT this year. The firm projected EU wheat exports in 2025-26 at 29.3 MMT, up from 23.8 MMT expected in the current marketing year.
India doesn’t need wheat imports, will allow sugar exports if surplus supply... India’s food secretary says there’s no need for wheat imports and he expects domestic prices to moderate soon. He also said India may allow sugar exports if there are surplus supplies after meeting domestic consumer demand and ethanol blending requirements.
India exchange extends suspension of futures trading in key ag commodities... The Securities and Exchange Board of India extended the suspension of futures trading in key farm commodities, including soybeans, crude palm oil, wheat and others, until Jan. 31. Initially imposed in 2021 to curb food price inflation, the suspension has been periodically extended, most recently set to expire on Dec. 20. This shorter extension fuels speculation that trading might resume in early 2025.
Indonesia to raise CPO export tax to 10%... Indonesia plans to increase the crude palm oil (CPO) export tax to 10% from the current 7.5%, aiming to fund expanded biodiesel subsidies, according to Chief Economic Minister Airlangga Hartarto. The higher levy will take effect once the finance ministry finalizes the regulation. With the biodiesel program set to rise to 40% (B40), subsidy needs are projected to surge by 68%, per estimates by the palm oil fund agency. While no changes were announced for refined palm oil products’ export taxes (currently 3% to 6%), the government plans to allocate 15.62 million kiloliters of unblended biodiesel to fuel retailers in 2025, up from 13.4 million for the current B35 program.
BOE holds rates steady amid global monetary shifts... The Bank of England (BOE) maintained its key interest rate at 4.75%, resisting the push for cuts despite a struggling UK economy and surging wages. This marks the second pause in three meetings, though three of nine policymakers voted for a reduction to 4.5%, signaling growing dissent. BOE faces a challenging mix of rising wages and slowing growth, with inflation still above the 2% target. The UK’s economic forecast is bleak, with stagnation predicted for the fourth quarter and a contraction already in October. BOE signaled gradual rate cuts ahead, though policymakers remain divided.
BOJ holds rates steady amid uncertainty... The Bank of Japan (BOJ) maintained its short-term policy rate target at 0.25%, with Governor Kazuo Ueda emphasizing the need for further data on wage trends and economic policies under President-elect Donald Trump before considering a rate hike. Ueda noted that while Japan’s economic trajectory aligns with BOJ forecasts, the sustainability of wage increases remains uncertain. The decision was not unanimous, as board member Naoki Tamura advocated for a rate hike to 0.5% due to rising inflationary pressures. BOJ’s next meeting is scheduled for Jan. 23-24, with attention turning to the Jan. 9 regional economic report for potential rate hike indicators.
Chinese banks raise mortgage rates for the first time since 2021... Some Chinese commercial banks in cities such as Guangzhou, Qingdao and Nanjing have raised first-home mortgage rates by 5 to 20 basis points since November to as high as 3.1%, Chinese media reported. Some 17 out of the 42 cities with available data lifted first-home mortgage rates in November, according to figures from Data Motion, the first increase since October 2021. The increases underscore the mounting pressure on Chinese banks, which have been pushed by Beijing to cut mortgage rates to spur home purchases after property developers were hit by a debt crisis.
Senate passes WRDA 2024, awaiting likely presidential signature... The Water Resources Development Act (WRDA) of 2024 cleared the Senate on Wednesday with an overwhelming bipartisan vote of 97-14. This passage in the Senate followed the House’s approval of the bill on Dec. 10, where it passed with a vote of 399 to 18. It is now headed to President Joe Biden for likely final approval. This bipartisan legislation authorizes critical U.S. Army Corps of Engineers water resources projects. Keys: It adjusts the cost-share ratio for inland waterways projects to 75% federal funding and 25% Inland Waterways Trust Fund, provides 100% federal funding for projects under the Bipartisan Infrastructure Law, reauthorizes FEMA’s National Dam Safety Program through 2028 and streamlines Corps processes and enhances economic development through funding mechanisms.
EPA greenlights California’s gas car ban by 2035 amid potential legal clash... EPA earlier this week approved California’s plan to ban new gasoline-powered vehicle sales by 2035 and enforce stricter emission standards for heavy-duty trucks. This decision aligns with outgoing President Joe Biden’s clean energy agenda but may face opposition from Trump, who has signaled potential legal challenges. EPA granted two waivers under the Clean Air Act, allowing California to implement the Advanced Clean Cars II rule and the Heavy-Duty Omnibus rule. Governor Gavin Newsom hailed the decision as a victory for public health and climate action, while critics, including Trump, argue it restricts consumer choice and oversteps federal authority. The move impacts over a dozen states adopting California’s standards, covering 40% of the U.S. auto market.
California declares emergency over H5N1 situation... California declared a state of emergency over the H5N1 virus as it spread more widely in dairy herds and after it has infected dozens of farm workers. The declaration aims to streamline and expedite the state’s response by allowing more flexibility for staffing, contracting and other rules, Gov. Gavin Newsome said. Four southern California dairies tested positive on Dec. 12, “necessitating a shift from regional containment to statewide monitoring and response,” Newsom said in his emergency declaration. Earlier cases had been centered in the Central Valley in the middle of the state. In California, the top U.S. milk-producing state, 649 herds have tested positive since late August, roughly 60% of its herds.
Wholesale beef prices retreat again... Wholesale beef prices weakened for a second straight day on Wednesday, with Choice down 79 cents to $314.84 and Select down $2.95 to $285.55. The $315.00 and $285.00 levels have become the comfort zone for both packers and retailers.
Cash hog index rises again... The CME lean hog index is up another 18 cents to $84.16 as of Dec. 17, the fourth gain in the last six days. While the net gain during that span is only 84 cents, the index is showing signs of a potential seasonal bottom. The pork cutout firmed $1.58 on Wednesday to $96.35, as gains in ribs, hams and bellies offset losses in the other cuts.
Overnight demand news... South Korea purchased 201,000 MT of corn – 65,000 MT expected to be sourced from South America and 136,000 MT from unspecified origins – 86,800 MT of U.S. milling wheat and 40,000 MT of Canadian wheat. Japan purchased 77,220 MT of milling wheat via its weekly tender, including 55,420 MT U.S. and 21,800 MT Australian. Thailand purchased 100,000 MT of feed wheat – one cargo each of U.S. and Australian.
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
- 7:30 a.m. Weekly Export Sales — FAS
- 7:30 a.m. Extended Weather Forecast — NWS
- 8:00 a.m. Food Expenditure Series — ERS
- 2:00 p.m. Livestock Slaughter — NASS
- 2:00 p.m. Milk Production — NASS