Good morning!
Grains weaker overnight... Corn, soybeans and wheat mildly pulled back from Thursday’s gains during a lightly traded overnight session. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 1 to 2 cents lower and wheat futures are 1 to 4 cents lower. The U.S. dollar index is nearly 200 points lower and front-month crude oil futures are about 50 cents higher.
Clarification on 45Z signup... Some farmers reached out about whether they needed to sign up with IRS by Jan. 1, 2025, for the 45Z Clean Fuel Production Credit. Based on the available information, farmers do not need to sign up. The registration requirement applies specifically to biofuel producers, such as ethanol and biodiesel plants. However, farmers should stay informed about potential opportunities and maintain good records of their agricultural practices to potentially benefit from related market incentives in the future. Biofuel plants seeking to qualify for 45Z may require more information about farming practices for crops used as feedstocks and might offer premiums for implementing practices that reduce carbon intensity, such as no-till or nutrient management plans.
Weekly Export Sales Report out this morning... For the week ended Dec. 19, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) | |
| Corn | 1,000,000-1,600,000 | 1,174,565 |
| Wheat | 250,000-600,000 | 457,933 |
| Soybeans | 1,000,000-1,800,000 | 1,424,158 |
| Soymeal | 200,000-450,000 | 261,586 |
| Soyoil | 5,000-15,000 | 6,028 |
Brazil’s soybean, corn exports show divergent trends... Brazil’s soybean and corn exports revealed contrasting performances in November, according to the latest Logistics Bulletin from the National Supply Company (Conab). Soybean exports faced a decline, while corn exports surged, bolstered by robust global demand. From January to November, soybean exports totaled 96.8 MMT, a drop from 101.8 MMT in the same period of 2023. This marked a shift in Brazil’s export revenue leadership, as soybeans lost ground to oil. The last time soybeans were not Brazil’s top export earner was in 2021, when iron ore took the lead. Corn exports, on the other hand, displayed significant growth, as movement through the Northern Arc of ports jumped. Conab forecasts continued growth in Brazil’s agricultural exports, driven by production recovery and improved logistics.
China’s factory sector continues to slump, though at a slower rate in November... China’s industrial profits fell at a slower clip in November, but the annual decline in earnings this year is expected to be the worst since records began in 2000 due to persistently soft domestic consumption. Industrial profits fell 7.3% in November from last year following a 10.0% drop in October. For the first 11 months of this year, China’s industrial profits fell 4.7% from the same period last year to 6,667.48 billion yuan. Profits dropped 8.4% from year-ago for state-owned firms and 1.0% for the private sector.
China sanctions 7 U.S. companies over military assistance to Taiwan... The Chinese government placed sanctions on seven companies on Friday in response to recent U.S. announcements of military sales and aid to Taiwan. The seven companies being sanctioned include Insitu Inc., Hudson Technologies Co., Saronic Technologies, Inc., Raytheon Canada, Raytheon Australia, Aerkomm Inc. and Oceaneering International Inc., the foreign ministry said. It said that “relevant senior executives” of the companies are also sanctioned. Any assets they have in China will be frozen, and organizations and individuals in China are prohibited from engaging in any activity with them.
China launches investigation into beef imports... China will launch an investigation into beef imports, the commerce ministry said, as the world’s biggest meat importer and consumer grapples with an oversupplied market that has dropped domestic prices to multi-year lows. The inquiry, requested by the China Animal Husbandry Association and other cattle and livestock groups, will focus on fresh beef, cold beef, head of beef and frozen beef imported between Jan. 1, 2019, and June 30, 2024, the ministry said. The ministry said imports of the products under investigation accounted for 30.9% of the Chinese market. Beef prices in China are at their lowest level in five years, while cattle prices slumped to the lowest in 10 years. January-November imports of the products being investigated were 2.6 MMT, while those same imports totaled 1.66 MMT in all of 2019. Any trade measures to try to reduce beef imports would hit China’s largest suppliers – Brazil, Argentina and Australia.
HPAI virus shows mutations in first U.S. severe human case... The U.S. Centers for Disease Control and Prevention said its analysis of samples from the first severe case of highly pathogenic avian influenza (HPAI) in the country last week showed mutations not seen in samples from an infected backyard flock on the patient’s property. CDC said the patient’s sample showed mutations in the hemagglutinin (HA) gene, the part of the virus that plays a key role in it attaching to host cells. It noted the risk to the general public from the outbreak has not changed and remains low.
Cash cattle sentiment strengthens... Thursday’s surge in cattle futures, along with a sharp rise in wholesale beef values has cash sources now expecting steady-at-worst prices for this week’s cash cattle trade. But it remains uncertain how actively packers will attempt to bid for cattle with another holiday-shortened slaughter schedule next week and still deeply negative margins.
Cash hog index continues to rise... The CME lean hog index is up another 35 cents to $85.10 as of Dec. 23, marking a sixth straight daily gain and eight of the last 10 days. During that span, the index has risen $1.77 from the Dec. 9 low.
Overnight demand news... Bangladesh tendered to buy 50,000 MT of optional origin non-basmati parboiled rice.
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
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS