Good morning!
Grains mostly firmer in quiet start to the week... Corn, soybeans and wheat favored the upside while holding within relatively tight trading ranges overnight. As of 6:30 a.m. CT, corn futures are trading unchanged to a penny higher, soybeans are fractionally to a penny higher and wheat futures are mostly 4 to 5 cents higher. The U.S. dollar index is modestly weaker and front-month crude oil futures are around 85 cents higher, as the collapse of Syrian dictator Bashar Al-Assad’s rule has the world on watch for more Mideast turmoil.
Heavy rains continue in southern Brazil... Heavy rain developed in interior southern Brazil as expected during the weekend, with more rainfall expected the first half of this week. World Weather Inc. says some flooding resulted, though the extent of any damage to crops is uncertain. Favorable conditions are expected across the rest of Brazil. Shower activity was limited to northern areas of Argentina during the weekend, resulting in net drying across most of the country. Eastern Argentina will be drier than normal the next 10 days, while light rains are expected in western and northern areas.
The week ahead in Washington... This will be a busy week for lawmakers as they approach the end of the 118th Congress with a focus on fiscal year (FY) 2025 appropriations. With the current continuing resolution (CR) set to expire on Dec. 20, it appears likely another stopgap spending measure will be passed, extending funding into March 2025. The House plans to take up the FY 2025 National Defense Authorization Act this week. The NDAA is considered a “must-pass” bill, and Congress has successfully passed it every year since 1961. Key economic data this week will be consumer inflation figures on Wednesday and producer prices on Thursday. USDA will update its cotton production estimate in Tuesday’s December crop reports, but there will be no updates to the corn and soybean crops this month. Modest changes are expected to ending stocks for corn, soybeans, wheat and cotton.
Agriculture’s focus in CR... A one-year 2018 Farm Bill extension, a possible increase in reference prices and language regarding financial aid to the ag sector are all possibilities to be attached to the CR. Some conservative Republicans say any increase in spending must be offset by budget cuts elsewhere, though there could be enough Democratic votes to offset those House conservatives. Meanwhile, a disaster aid package including agriculture is widely expected, with the total amount still being considered. Of note: Most expect a CR running until at least mid-March. Anything longer risks running up against mandatory spending cuts under the 2023 Fiscal Responsibility Act.
Trump aide outlines aggressive legislative agenda for 2025... Stephen Miller, incoming deputy chief of staff, detailed plans for a swift legislative push in 2025. Speaking on Fox News, Miller emphasized completing a border-focused bill within weeks of Trump taking office, alongside immediate executive actions. Senate Republicans, including Sens. John Thune (R-S.D.) and Lindsey Graham (R-S.C.), aim to deliver full border funding by February. Miller also confirmed GOP intentions to pursue a comprehensive tax package, acknowledging potential delays due to the narrow House majority. House approval of the plan remains uncertain.
China vows to ramp up policy stimulus to spur growth... China will adopt an “appropriately loose” monetary policy next year, the first easing of its stance in some 14 years, alongside “a more proactive fiscal policy” to spur economic growth, the Politburo said. China will step up “unconventional” counter-cyclical adjustments, focusing on expanding domestic demand and boosting consumption, state-run Xinhua news reported, citing a readout of a meeting of top Communist Party officials, the Politburo. The new wording for monetary policy marks the first easing of the stance since late 2010, according to official announcements on the Politburo meetings.
China’s deflationary concerns persist... China’s consumer prices rose at a slower pace in November, while producer price deflation persisted, despite stimulus measures. The consumer price index rose 0.2% from a year earlier, down from a 0.3% increase in October. Food prices rose the least in four months (1.0% vs .2.9% in October), driven by softer increases in both fresh vegetables and pork. China’s producer prices dropped 2.5% from year-ago, softer than a 2.9% decline in the previous month but the 26th consecutive month of producer deflation.
China regulators tell banks to expedite offshore company listings... Regulators in mainland China and Hong Kong have told some of the world’s biggest investment banks to help speed up Chinese companies’ listings, said sources, in a bid to boost fundraising overseas and revitalize the economy. The China Securities Regulatory Commission (CSRC) in October told two meetings, attended by a total of more than 10 banks and law firms, it was working towards speeding up some approvals for offshore listings, seven sources told Reuters. In a similar move, Hong Kong’s bourse operator has also initiated one-on-one meetings with major global and Chinese banks since October to discuss how to optimize the listing process for Chinese firms, two of the sources said.
China’s central bank resumes gold purchases after six-month hiatus... China’s central bank resumed buying gold for its reserves in November after a six-month pause, official data by the People’s Bank of China (PBOC) showed. China’s gold holdings rose to 72.96 million fine troy ounces at the end of November, up from 72.80 million troy ounces a month earlier. But the value of China’s gold reserves fell to $193.43 billion at the end of last month from $199.06 billion at the end of October.
IRS eases biogas tax credit rules, boosting industry prospects... The IRS has finalized new rules simplifying the energy investment tax credit for renewable natural gas and biogas projects. These changes address ownership requirements that previously hindered many projects from qualifying for the 30% credit, fostering confidence in early-stage developments. The adjustments also allow for easier sale and monetization of these credits, alleviating market freezes caused by earlier uncertainties. While this development benefits projects already in the pipeline, those still awaiting financing may struggle to meet the Dec. 31 deadline to qualify under the current credit regime.
Euro zone investor morale falls to lowest in more than a year... Investor morale in the euro zone fell in December to its lowest in more than a year, a survey showed on Monday, with Germany remaining a drag on the bloc. The Sentix index for the euro zone fell to -17.5 in December from -12.8 in November, the lowest level since November 2023. Investor morale in Germany fell to -33.2 in December, down from -29.8 in November, the survey showed.
HPAI outbreaks reported in northwest Iowa poultry flocks... Iowa’s Department of Agriculture reported outbreaks of highly pathogenic avian influenza (HPAI) in a commercial layer flock in Sioux County and a commercial turkey flock in Palo Alto County. There were the fourth and fifth detections of HPAI in the state this year and the first since June.
China resumes British pork imports... Major British pork produces can resume shipments to China, the UK ag ministry announced. China is the UK’s largest non-EU pork customer.
Cattle traders take cautious stance... Nearby live cattle futures finished last week below the cash market, despite generally $1 to $2 higher cash cattle prices. That signals traders expect the cash strength to be short-lived as packer margins are negative and there will be holiday-shortened slaughter schedules in two of the next four weeks.
Cash hog index marks new seasonal low... The CME lean hog index is down another 20 cents to $83.73 as of Dec. 5, falling below the October low to the lowest level since March 25. The pork cutout firmed $2.52 on Friday to $91.16, as all cuts except ribs strengthened, led by a $6.38 jump in primal bellies.
Weekend 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
- 10:00 a.m. Weekly Export Inspections — AMS
- 2:00 p.m. U.S. Agricultural Trade Data Update — ERS