Good morning!
Soybeans surge, corn and wheat quiet... Soybean futures continued their price surge overnight with front-month futures reaching their highest level on the continuation chart since Sept. 13. Corn and wheat traded in narrow ranges on either side of unchanged. As of 6:30 a.m. CT, corn futures are trading fractionally to 2 cents lower, soybeans are 10 to 14 cents higher, winter wheat futures are steady to 2 cents lower and spring wheat is narrowly mixed. Front-month crude oil futures are around 35 cents lower and the U.S. dollar index is nearly 100 points lower.
Holiday schedule; Happy New Year from Pro Farmer... Grain and livestock markets trade normal hours today. All markets and government offices are closed Monday, Jan. 2, in observance of New Year’s Day. As a result, there will be no Pro Farmer market reports next Monday. Grain and livestock markets will reopen at 8:30 a.m. CT on Tuesday, Jan. 3. Pro Farmer wishes you a prosperous 2023.
Weekly Export Sales Report out this morning... For the week ended Dec. 22, traders expect:
| 2022-23 expectations (in MT) | Last week (in MT) |
Corn | 600,000-850,000 | 636,800 |
Wheat | 200,000-450,000 | 334,200 |
Soybeans | 500,000-900,000 | 736,000 |
Soymeal | 125,000-300,000 | 311,400 |
Soyoil | 0-5,000 | 800 |
Argentine crop ratings continue to decline... The Buenos Aires Grain Exchange rated Argentina’s soybean crop 10% good/excellent (down two points from last week), 62% normal (down one point) and 28% poor (up three points). The exchange rated the corn crop 15% good/excellent (unchanged), 57% normal (down two points) and 28% poor (up two points).
EPA reportedly will release its revised WOTUS definition today... EPA’s revised definition, once released, will determine the regulatory fate of wetlands and waterways across the nation (unless a later change is necessary following a Supreme Court decision on the matter). EPA released a proposed rule late last year, which formally scrapped the Trump-era WOTUS regulation and reinstated pre-2015 Clean Water Act rules that were updated to reflect Supreme Court decisions. EPA’s current proposed final rule, some note, follows 2008 guidance from the George W. Bush administration to determine what qualifies for federal protection under the Clean Water Act.
Some imported cars will qualify for EV tax credits via IRA... The U.S. Treasury Department signaled some imported cars will qualify for electric-vehicle (EV) tax credits in the Inflation Reduction Act (IRA), a move that could assuage Asian and European allies’ concerns about the sweeping climate legislation. Treasury sketched out its interpretation of content requirements for EV tax credits Thursday, while delaying final rules until March so officials have more time to address the complexities of the law. Treasury officials indicated that imported EVs can qualify for a consumer tax credit of up to $7,500 through a commercial-vehicle clause in the law by leasing them. That ruling will help foreign carmakers, which have complained their electric models were excluded from the subsidy because they don’t currently manufacture them in North America. Sen. Joe Manchin (D-W.Va.). said Treasury’s interpretation “bends to the desires of the companies looking for loopholes and is clearly inconsistent with the intent of the law.”
Brazil names new ag minister... President-elect Luiz Inacio Lula da Silva on Thursday confirmed the appointment of soy grower and former vice governor of Brazil’s biggest farm state, Carlos Favaro, as the country’s new agriculture minister. Favaro vowed to work to improve Brazil’s image abroad by transforming the South American nation “into the world’s most sustainable agricultural powerhouse.” He said combating illegal deforestation is paramount, as neglect for the environment can cause local farmers to lose clients in world markets. To curb deforestation, Favaro said he would promote policy to increase use of degraded pastureland for agriculture, which he said would reduce pressure to clear native land to grow crops. He also said the government is keen to help develop a carbon market while advocating farmers must get paid for environment services.
Another big jump in Russia’s wheat export tax... Russia’s wheat export tax for Jan. 11-17 will be 4,766.3 rubles ($67.50) per metric ton based on an indicative price of $311.10. That’s up sharply from a rate of 4,160.9 rubles per metric ton the previous two weeks and the highest rate since the last week of August.
Indonesia to tighten palm oil exports... Indonesia will tighten export rules for palm oil from Jan. 1 by allowing less shipments overseas for every metric ton sold domestically, to ensure sufficient and affordable cooking oil supply at home, officials said on Friday. Exporters will be allowed to ship six times their domestic sales volume, less than the current ratio of eight times, Reuters reported. The government will continue to evaluate the export ratio periodically, taking into account domestic cooking oil availability and prices.
China’s sow herd continues to grow... China’s sow herd increased 0.2% in November from the month before to 43.88 million head, according to the country’s ag ministry. The sow herd was 2.1% larger than November 2021.
Cash cattle prices strengthen... Cash cattle trade started in the $157 to $158 area in the Southern Plains and around $248 to $250 in the northern dressed markets – $1 to $2 higher than last week in both markets. Packers increased slaughter runs significantly from week-ago to take advantage of the surge in wholesale Choice beef prices and vastly improved margins, raising the need to secure more supplies for next week’s production schedule.
Cash hog index firms amid tight supplies... After a $2.09 surge yesterday, the CME lean hog index is up a modest 5 cents to $80.74 (as of Dec. 28). The cash market is starting to firm amid tightness in market-ready supplies. The weekly Iowa/southern Minnesota report for the week ended Dec. 24 showed the average weight of hogs at 283.2 lbs., down a whopping 7.6 lbs. from year-ago.
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. Weekly Export Sales — FAS
- 2:00 p.m. Agricultural Prices — NASS
- 2:00 p.m. Peanut Prices — NASS