Good morning!
Followthrough selling overnight... Winter wheat futures led a round of followthrough selling in overnight trade, while corn and soybeans faced lighter pressure. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents lower, soybeans are steady to fractionally lower, winter wheat futures are 13 to 18 cents lower and spring wheat is 5 to 6 cents lower. Front-month crude oil futures are around 50 cents higher and the U.S. dollar index is around 225 points lower this morning.
Another slowdown in jobs growth expected... Economists polled by Reuters expect the Labor Department to report the U.S. economy added 200,000 non-farm payrolls in November, which would be down from 261,000 in last month’s report and the fourth straight monthly slowdown in jobs growth. The unemployment rate is expected to hold at 3.7%.
China gives major signal it may adjust its stringent zero-Covid policy... The top official in charge of China’s Covid response told health officials the country faced a “new stage and mission” in pandemic controls. “With the decreasing toxicity of the Omicron variant, the increasing vaccination rate and the accumulating experience of outbreak control and prevention, China’s pandemic containment faces a new stage and mission,” Vice Premier Sun Chunlan said Wednesday, according to state news agency Xinhua. Her comments came a day after a separate body of top health officials pledged to rectify some approaches to Covid control and said local governments should “respond to and resolve the reasonable demands of the masses” in a timely manner. As of Nov. 11, 40% of China’s over-80 population had received a booster shot, according to state media, while around two-thirds had received two doses. Meanwhile, several cities have made revisions to their policies, largely around testing and quarantine rules, while some have relaxed lockdown measures.
World food prices ease for eighth straight month... The UN Food and Agriculture Organization (FAO) global food price index ticked down 0.2 point in November – the eighth straight monthly decline – though it was 0.4 point (0.3%) above year-ago. Declines in cereal grains, dairy and meat slightly more than offset increases in vegetable oils and sugar. Compared to year-ago, prices were up 4.1% for meat, 9.1% for dairy and 6.4% for cereal grains, while vegoils dropped 16.2% and sugar declined 4.9%.
FAO cuts global cereal grain production forecast... FAO’s world cereal grain production forecast for 2022-23 was cut 7.2 MMT from last month to 2.756 billion metric tons, due mainly to smaller corn production. Cereal grin production is now expected to fall 57 MMT (2.0%) from 2021-22.
Senate passes legislation to avert rail strike... The Senate on Thursday passed legislation to avert a rail strike. The measure is headed to President Joe Biden’s desk to be signed into law. The bill adopts a tentative agreement reached in September between union leaders and freight operators. Four of the 12 unions representing rail workers have since rejected the deal, setting up the impending work stoppage. The agreement includes a 24% pay increase over five years, $5,000 bonuses, voluntary assigned days off, but only one paid day off. An additional measure passed in the House would have provided rail workers with seven paid sick days, but the Senate rejected the addition of paid sick time.
Mexico, U.S. trade officials discuss corn exports, energy policy... U.S. Trade Representative Katherine Tai met Mexican Economy Minister Raquel Buenrostro and stressed the importance of avoiding any disruption in U.S. corn exports to Mexico along with Mexico’s energy policy. The Mexican economy ministry has invited Tai’s team to hold consultations in the coming days in Mexico City. Buenrostro proposed establishing working groups, which would meet during December and early January to discuss the different aspects of the energy consultations.
China will support growth, sees moderate inflation in 2023... China’s central bank will focus on supporting the slowing economy, People’s Bank of China Governor Yi Gang said on Friday, adding that domestic consumer inflation is likely to stay moderate in 2023. The central bank’s accommodative policy will help support China’s economic recovery and employment, Yi said. “Our focus is growth right now,” Yi said, adding that China’s economic growth is slower than expected due to the impact from the Covid-19 pandemic and other headwinds.
Euro zone producer prices decline in October... The euro zone producer price index for October fell 2.9% from September but was up 30.8% compared with last year. Excluding energy, producer prices in October rose by 0.5% over one month and by 14.0% on an annual basis.
Russia mildly increases wheat export tax... Russia’s wheat export tax for Dec. 7-13 will be 2,806.8 rubles ($45.41) per metric ton based on an indicative price of $313.10. That’s up from a rate of 2,788.0 rubles per metric ton the previous week.
China to auction more state-owned soybeans... China will auction another 500,000 MT of soybeans from state-owned reserves on Dec. 9.
Packers still have some needs to fill... Cash cattle prices firmed in the northern market on Thursday, though some feedlots continued to hold out for even higher prices. Trade in the Southern Plains has been at mostly steady prices this week. Despite having fresh contract supplies available, cash sources signal packers still have some near-term slaughter needs to fill, which could increase cash prices from levels traded so far this week.
December hogs now virtually in line with cash index... The CME lean hog index is down another 65 cents to $83.24 (as of Nov. 30). December lean hog futures finished Thursday just 11 1/2 cents below today’s cash quote, suggesting traders sense a seasonal low is close.
Overnight demand news... Exporters reported no tenders or sales.
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. Employment Situation — BLS
- 2:00 p.m. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC