Good morning!
Grains firmer overnight... Traders covered more short positions in the soybean and wheat markets overnight, while corn rebounded from Monday’s losses. As of 6:30 a.m. CT, corn futures are trading 2 cents higher, soybeans are 3 to 4 cents higher and wheat futures are 2 to 3 cents higher. The U.S. dollar index is modestly weaker and front-month crude oil futures are mildly firmer.
New Year’s trading schedule... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Wednesday, Jan. 1 for New Year’s Day. There will be no Pro Farmer updates on Wednesday. Grain and livestock markets reopen at 8:30 a.m. CT on Thursday, Jan. 2. Pro Farmer wishes you a happy and safe New Year’s celebration and a prosperous 2025!
FAPRI’s analysis of farmer relief payments... U.S. farmers will get $9.7 billion in market relief payments to addresses declining market prices which aims to sustain farmers until a new farm bill is enacted. According to a FAPRI analysis, key allocations and distribution led by: Texas: $965 million, benefiting its status as the largest cotton producer; Iowa: $846 million, with strong support for corn and soybean farmers; Illinois: $790 million; and Kansas: $787 million. Click here for full details.
Cordonnier adjusts Argentine crop estimates... Due to adjustments in planted acreage, South American crop consultant Dr. Michael Cordonnier lowered his Argentine soybean crop estimate 2 MMT to 53 MMT and raised his corn crop forecast 1 MMT to 50 MMT. He labels weather in Argentina as “worrisome” amid a hotter, drier pattern. Cordonnier kept his Brazilian crop estimates at 171 MMT for soybeans and 125 MMT for corn, with a neutral to higher bias toward both amid generally favorable weather aside from the far southern state of Rio Grande do Sul.
China approves more GM crops to boost yields, ensure food security... China approved safety certificates for 17 crop varieties, including five gene-edited crop varieties and 12 types of genetically modified (GM) soybeans, corn and cotton. The approved gene-edited crops include two soybean varieties, and one each of wheat, corn and rice. The safety certificates for the newly approved varieties are valid for five years, starting from Dec. 25, according to the ag ministry. China also authorized the import of an insect-resistant and herbicide-tolerant GM soybean variety from BASF exclusively as a processing material.
China’s manufacturing growth slows in December... China’s official manufacturing purchasing managers index fell to 50.1 in December from November’s seven-month high of 50.3. While this marked the third straight month of expansion in factory activity, the reading came in lower than expected. New orders rose the most since April, though output grew the least in four months.
U.S. says Chinese hackers stole documents in ‘major cybersecurity incident’... Chinese state-sponsored hackers breached the U.S. Treasury Department’s computer security guardrails this month and stole documents in what Treasury called a “major cybersecurity incident,” according to a letter to lawmakers. The hackers compromised third-party cybersecurity service provider BeyondTrust and were able to access unclassified documents, the letter said. According to the letter, hackers “gained access to a key used by the vendor to secure a cloud-based service used to remotely provide technical support for Treasury Departmental Offices (DO) end users. With access to the stolen key, the threat actor was able to override the service’s security, remotely access certain Treasury DO user workstations, and access certain unclassified documents maintained by those users. Based on available indicators, the incident has been attributed to a China state-sponsored Advanced Persistent Threat (APT) actor.” The Treasury Department said it was alerted to the breach by BeyondTrust on Dec. 8 and that it was working with the U.S. Cybersecurity and Infrastructure Security Agency (CISA) and the FBI to assess the hack’s impact. Beijing says claims a Chinese state-sponsored actor was behind the cyber-security breach are “groundless” and “lack evidence.”
PBOC ramps up liquidity injection... The People’s Bank of China (PBOC) injected 1.7 trillion yuan ($233 billion) of cash in December, dialing up liquidity support for the economy and financial markets at year-end. PBOC conducted 1.4 trillion yuan in outright reverse repurchase agreements using three- and six-month contracts, aiming to maintain sufficient liquidity in the banking system. This follows injections of 800 billion yuan and 500 billion yuan in the past two months through the new tool introduced in October. The central bank also bought a net 300 billion yuan of treasury bonds this month, adding an equivalent amount of cash into the financial markets.
China to lower dollar, euro and yen weightings in CFETS yuan basket in 2025... China’s central bank will adjust the weightings of its yuan China Foreign Exchange Trade System (CFETS) basket in 2025, the country’s foreign exchange trade platform said. From Jan. 1, the central bank will lower the U.S. dollar’s weighting in the CFETS currency basket to 18.903% from 19.46%, cut the euro’s weighting to 17.902% from 18.08% and reduce the yen’s weighting to 8.584% from 8.963%. It will add Macau’s pataca to the basket, bringing the total number of currencies in the CFETS basket to 25 next year.
Cash cattle, beef fundamentals remain supportive... Cash cattle averaged $194.81 last week, up 8 cents from the previous week and the sixth straight weekly gain. Boxed beef prices jumped $2.99 for Choice to $325.37 and $3.63 for Select to $294.76 on Monday. While there’s risk of long liquidation pressure to close out the year, cash fundamentals remain supportive for futures, especially given February live cattle’s discount to the cash market and the looming winter storm.
February hogs extend discount to cash index... February lean hog futures faced heavy long liquidation pressure on Monday, resulting in the contract violating support at the November low. With managed money accounts long more than 117,000 futures contracts as of Dec. 24 and yesterday’s technical breakdown, February hogs could face more year-end selling. As of yesterday’s close, February hogs held a $2.725 discount to the cash index, which is down 50 cents to $84.35 as of Dec. 27.
Overnight demand news... Jordan passed on a tender to buy up to 120,000 MT of feed barley and issued a tender to buy 120,000 MT of wheat.
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. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Agricultural Prices — NASS