Good morning!
Soybeans rise overnight, corn and wheat little-changed... Soybeans built on Tuesday’s gains overnight but failed to get near yesterday’s highs. Corn and wheat futures held in tight trading ranges in thin trade. As of 6:30 a.m. CT, corn futures are trading steady to fractionally lower, soybeans are 12 to 13 cents higher, winter wheat futures are fractionally on either side of unchanged and spring wheat is mostly 1 to 4 cents lower. Front-month crude oil futures are trading just below unchanged and the U.S. dollar index is around 100 points lower this morning.
Ship insurers to cancel war cover for Russia, Ukraine... Ship insurers said they are cancelling war risk coverage across Russia, Ukraine and Belarus, following an exit from the region by reinsurers in the face of steep losses. Reinsurers, who insure the insurers, typically renew their 12-month contracts with insurance clients on Jan. 1, giving them the first opportunity to scale back exposure since the war in Ukraine started. P&I (protection and indemnity) clubs American, North, UK and West are no longer able to offer war risk cover for liabilities in the region from Jan. 1, they said. Ships typically have P&I insurance, which covers third party liability claims including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage. The moves by the insurers will make it harder for ship-owners or charterers to find insurance, increase prices and may mean some ships sail uninsured, industry sources told Reuters.
Chinese hospitals, funeral homes ‘extremely busy’ as Covid spreads... Chinese hospitals and funeral homes were under intense pressure on Wednesday as a surging Covid-19 wave drained resources. The speed at which China has scrapped Covid rules has left its health system overwhelmed.
Taiwan, others to test China travelers for Covid, U.S. may tighten rules... Taiwan will test arrivals from China for Covid-19 from Jan. 1 in response to a surge in cases there, the government said on Wednesday, joining other countries in stepping up controls on travelers coming from China. Taiwan’s Central Epidemic Command Center said all passengers arriving on direct flights from China, as well as by boat at two offshore islands, will have to take PCR tests upon arrival. The measures, which will run until the end of January, do not include those arriving from Hong Kong or Macau, the center added. Japan and India said they would require a negative Covid-19 test upon arrival for travelers from China. Malaysia put in place additional tracking and surveillance measures, while the Philippines was considering Covid tests for Chinese travelers. Meanwhile, the U.S. government may impose new Covid-19 measures on travelers from China over concerns about the “lack of transparent data” coming from Beijing, U.S. officials said on Tuesday.
SCOTUS orders Title 42 border restrictions to remain in place... In a 5-4 vote, with the Supreme Court’s three liberals and conservative justice Neil Gorsuch dissenting, the high court reversed an order from a federal judge in Washington, D.C., who ruled last month that the border policy must end. The court’s ruling comes in response to an emergency request filed by 19 Republican state attorneys general asking to maintain the policy, which was scheduled to expire this week. The court said that it would hear arguments in the case in February and the stay would remain in place until it issued its ruling.
Malaysia keeps January crude palm oil export duty at 8%... Malaysia maintained its export tax for crude palm oil at 8% for January and raised its reference price. The world’s second-largest palm exporter calculated a reference price of 3,889.52 ringgit ($880.98) per metric ton for January, up slightly from 3,847.24 ringgit for December.
A return to $100 oil?... “A combination of lower Russian oil supply and OPEC+ supply cuts mean the global oil market is expected to tighten over 2023,” ING analysts wrote in a research note. They project Brent crude prices to average $104 a barrel in 2023 and WTI to average $101.
FT survey: Energy crunch will trigger euro zone contraction in 2023... The euro zone economy is set to shrink next year as high inflation and potential energy shortages drag down output and trigger a reversal in the fortunes of the labor market, according to a Financial Times (FT) poll of economists. Almost 90% of the 37 economists surveyed by FT said they thought the single currency bloc was already in recession and the majority forecast gross domestic product would contract over the whole of next year. Most economists said they thought Europe was past the worst of its energy crisis, sparked by Russia’s invasion of Ukraine. But many fear the prospect of energy rationing could return next year, particularly if this winter is unusually cold, depleting supplies, or if gas flows from Russia are reduced further during 2023.
ERP payments edge higher... Payments under the Emergency Relief Program (ERP) inched to $7.27 billion as of Dec. 26, up from $7.25 billion the prior week. The total includes $6.20 billion for non-specialty crops ($6.19 billion prior) and $1.07 billion for specialty crops ($1.06 billion prior). The launch of Phase 2 for ERP has been delayed and the payment totals under Phase 1 have only risen slightly. Payouts under the Coronavirus Food Assistance Program (CFAP) were nearly unchanged as of Dec. 26.
Wholesale beef prices surge... Choice boxed beef prices surged $8.09 on Tuesday, pushing packer cutting margins solidly into the black. Packers have slowed production and raised wholesale beef prices to improve margins so they can be more aggressive with cash cattle bids after the holidays. Last week’s average cash cattle price was $156.26, up 57 cents from the previous week.
Cash hog index continues to fall... The CME lean hog index is down 13 cents to $78.60 (as of Dec. 23), as the cash market continues its seasonal decline. Last year at this time, the cash index had already bottomed and begun an extended rally to the seasonal peak in early August.
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
- 2:00 p.m. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Egg Products — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS