Good morning!
Grains modestly favor the upside overnight... Corn, soybeans and SRW wheat modestly favored the upside, while holding in tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading steady to fractionally higher, soybeans are 2 to 3 cents higher and SRW wheat are mostly a penny higher, while HRW and HRS futures are steady to fractionally lower. Front-month crude oil futures are modestly firmer, while the U.S. dollar index is down around 300 points, dropping to the lowest level since late July.
Merry Christmas from Pro Farmer... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Monday, Dec. 25 for Christmas, so there will be no Pro Farmer reports that day. Grain and livestock markets resume trading at 8:30 a.m. CT on Tuesday, Dec. 26. Pro Farmer wishes you a blessed Christmas!
U.S., allies mull action against Houthi missile attacks... Washington is reportedly mulling striking the Houthi base in Yemen, just days after announcing a multinational task force to safeguard navigation in the Red Sea. But the pledge did little to deter the Houthis, who instead vowed to ramp up their attacks and target U.S. warships if Washington executed attacks in Yemen. Washington currently has at least three destroyers stationed by the Red Sea. “Even if America succeeds in mobilizing the entire world, our military operations will not stop unless the genocide crimes in Gaza stop and allow food, medicine, and fuel to enter its besieged population, no matter the sacrifices it costs us,” Mohammed al-Bukaiti, a senior Houthi official, posted on X.
German farmers reduce wheat plantings... Germany’s winter wheat sown area for 2024-25 was reduced by 7.3% from the year before to 2.60 million hectares, its national statistics agency estimated. German farmers have also reduced winter rapeseed plantings by 4.7% to 1.11 million hectares. Planting weather was unfavorable amid heavy rains.
Russia cuts wheat export tax... Russia’s wheat export tax for Dec. 27-Jan. 10 will be 3,859.7 rubles ($42.12) per metric ton based on an indicative price of $250.00. That’s down from a rate of 4,048.1 rubles per metric ton the previous week and back-to-back weekly decline.
Indonesia secures rice import commitments from India, Thailand... Indonesia’s food procurement agency Bulog has signed deals for 1 MMT of rice from India and 2 MMT of rice from Thailand to shore up supplies for 2024. Indonesian President Joko Widodo said he’s still worried about food supplies, as the “super El Niño” reduced the country’s production.
Five major Chinese banks cut interest rates on some deposits... Five of China’s largest state banks lowered interest rates on some deposits on Friday, the third round of such cuts this year, offering the prospect of reduced lending costs at a time when the government is urging banks to support the economy. Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank were among banks to cut rates for time deposits by as much as 25 basis points. Banks cut annual interest rates for one-year and two-year time deposits by 10 basis points and 20 bps to 1.45% and 1.65%, respectively, and rates for three-year and five-year time deposits by 25 basis points. They cut large-scale certificates of deposit rates even more.
China seeks exemptions from U.S. sanctions on Russian LNG plant... China is preparing to ask the U.S. for exemptions from sanctions on a new Russian liquefied natural gas (LNG) export plant, Bloomberg reported, citing people familiar with the matter. State-owned companies CNOOC Ltd and China National Petroleum Corp (CNPC), who have a stake in Novatek PJSC’s Arctic LNG 2 project in Russia, are planning to ask for the exemptions as the U.S. measures threaten deliveries. LNG vessels could fall foul of U.S. sanctions if they pick up fuel from Arctic LNG 2, the report said, adding that CNOOC and CNPC also purchase LNG from the U.S., and don’t want to endanger their supply from American projects.
Angola exits OPEC over oil production quota dispute... Angola decided to leave OPEC (Organization of the Petroleum Exporting Countries) due to a dispute over oil production quotas, ending its 16-year membership. This departure follows similar exits by other countries like Qatar, Indonesia and Ecuador in recent years. This exit reduces OPEC’s membership to 12 nations, and while it poses challenges as the cartel seeks to stabilize oil prices, it may not immediately disrupt the organization or the broader OPEC+ group, which includes Russia.
H&P Report expected to show slightly smaller hog herd... Analysts expect USDA’s Hogs & Pigs Report this afternoon to show the U.S. hog herd as of Dec. 1 at 74.475 million head, which would be down 0.5% from year-ago. Fall farrowings are anticipated to have declined 4.8% from last year, resulting in a 1.7% smaller pig crop. Winter and spring farrowing intentions are expected to be down 2.1% and 1.7%, respectively. As is typically the case with the H&P Reports, any revisions to past data will be key, with the fall slaughter rates signaling upward adjustments are likely.
November feedlot placements expected to decline from year-ago... Analysts polled by Reuters expect USDA’s Cattle on Feed Report this afternoon to show the feedlot inventory up 2.2% from year-ago at 11.950 million head. That would be the third straight month of year-over-year increases in feedlot numbers. After two months of placements topping year-ago, analysts anticipate that category will decline 3.8%, while marketings in November are expected to be down 6.7%.
Cold Storage Report also out this afternoon... USDA will detail frozen meat stocks at the end of November. The five-year average is a 10.4-million-lb. increase in beef stocks and a 45.2-million-lb. decline in pork stocks during the month.
Cash cattle trade starts around $170... Cash cattle trade so far this week occurred around $170.00, which would be up $1.00 to $2.00 from last week, though most feedlots passed on those prices in hopes of even higher bids. Barring a collapse in prices today, the cash market will break the six-week string of losses.
Cash hog index ticks higher again... The CME lean hog index is up 15 cents to $66.69 (as of Dec. 20). That’s the first back-to-back gains in the cash index since early November, when there were three consecutive daily gains before it extended the seasonal decline. Traders sense a seasonal low in the cash market is close but will want to see sustained and stronger gains before they are convinced.
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
- 11:00 a.m. Cotton Ginnings — NASS
- 2:00 p.m. Cattle on Feed — NASS
- 2:00 p.m. Cold Storage — NASS
- 2:00 p.m. Hogs and Pigs — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC