Good morning!
Wheat firmer, beans weaker and corn mixed this morning... Wheat futures have adopted a mildly firmer tone early this morning after two-sided trade overnight, while soybeans have weakened. Corn is chopping around unchanged. As of 6:30 a.m. CT, corn futures are narrowly mixed, soybeans are 5 to 6 cents lower and wheat futures are mostly 1 to 3 cents higher. The U.S. dollar index is near unchanged and front-month crude oil futures are around $1.00 lower.
France cuts non-EU wheat export forecast... France’s ag ministry lowered its forecast for 2024-25 French wheat exports outside the EU by 100,000 MT to 3.4 MMT. That would be down 67% from 2023-24 and the lowest level in the ministry’s records dating back to 1996-97. The ministry raised its export forecast within the bloc by 100,000 MT to 6.24 MMT, down just 50,000 MT from 2023-24.
Ukraine’s grain exports continue to run ahead of year-ago... As of Feb. 12, Ukraine’s 2024-25 grain exports totaled 26.99 MMT, 1.47 MMT (5.8%) ahead of the same period last year. Exports included 11.34 MT of wheat (up from 9.97 MMT last year), 13.11 MMT of corn (down from 13.82 MMT) and 2.11 MMT of barley (up from 1.47 MMT).
India’s palm oil imports fell to near 14-year low in January... India’s palm oil imports in January fell to their lowest in nearly 14 years as refiners turned to cheaper soyoil, driven by negative refining margins for palm oil. Palm oil imports in January fell 45% from December to 275,241 MT, the lowest since March 2011, the Solvent Extractors’ Association of India (SEA) said. India imported an average of more than 750,000 MT of palm oil every month in the marketing year that ended in October 2024, according to SEA. Imports of soyoil in January increased 5.6% to 444,026 MT, the highest in seven months, and sunflower oil imports rose 8.9% to 288,284 MT. Lower shipments of palm oil reduced the country’s total vegoil imports in January by 14.8% to 1 MMT, the lowest in 11 months. The drop in vegoil imports during recent months lowered inventories to 2.18 MMT at the start of February, the lowest since April 2022, SEA said.
India expects bumper sugar crop that would allow exports... India expects to have enough sugar for export next season as favorable weather conditions help farmers boost acreage, according to a government official. The world’s second-biggest sugar producer in January permitted mills to ship as much as 1 MMT in the current season from October, easing restrictions that curbed overseas sales for more than a year. The industry was seeking permission to ship as much as 2 MMT. “All indications are that we’ll have a bumper sugar cane crop next year,” Aswani Srivastava, joint secretary at India’s food ministry, said at the Dubai Sugar Conference Wednesday. “We will remain in the export market.”
Argentine prosecutors find irregularities in dredging contracts for Paraguay-Parana waterway... An Argentine prosecutors’ office said it found irregularities in a planned auction to provide maintenance to the Paraguay-Parana river, a key route for grains transport. Prosecutors found evidence of “serious and evident irregularities in the wording of the tender documents,” they said in a report detailing their findings. The tender was set to go live today and would have assigned contracts for dredging and buoying Argentina’s stretch of the Paraguay-Parana waterway, a key transport route to the sea from inland areas of Paraguay, Bolivia and southern Brazil. Some foreign dredging firms had already decried the auction guidelines, arguing they favored the waterway’s current operator, Belgian firm Jan de Nul.
U.S. businesses struggle with uncertainty amid Trump’s tariff policies... U.S. businesses are grappling with uncertainty caused by President Donald Trump’s shifting tariff policies, making it difficult to plan for the future. The lack of a clear long-term trade strategy has left business owners in limbo, the Wall Street Journal reports. A Minnesota sheet metal fabricator has paused investment and hiring due to repeated changes in tariff policy. Meanwhile, a Pennsylvania-based office-supplies retailer is negotiating discounts with Chinese manufacturers and exploring alternative suppliers in Vietnam, although concerns remain that Vietnam could face future tariffs as well. Ford CEO Jim Farley described the situation as “chaos” for the auto industry, while aluminum tariffs are already impacting companies like Coca-Cola, which relies on imported aluminum from Canada for its soda cans. “The president going back and forth every few days about what is going to happen with these tariffs is not helpful,” says Traci Tapani, co-president of sheet metal fabricator Wyoming Machine.
House Budget showdown: Arrington at the wheel... The House Budget Committee, chaired by Rep. Jodey Arrington (R-Texas), may release its budget resolution today — an essential step before a markup planned for Thursday. Arrington’s proposal calls for $4.5 trillion in tax cuts and $1.5 trillion in spending cuts. It assumes a 2.8% economic growth rate and includes $300 billion in mandatory spending increases for border security and defense. This resolution represents a compromise between hardline conservatives pushing for deeper cuts and House leadership seeking balance. Senate Republicans are taking a different approach, opting for a two-bill strategy prioritizing a quick win for President Trump with narrow spending packages. Tensions between House GOP leadership and Arrington have slowed progress, but leadership remains cautiously optimistic that Arrington’s resolution will pass the Budget Committee and eventually the House floor. The next few days will be critical in determining whose strategy prevails. Of note: It is unclear if the House GOP’s budget resolution includes repealing parts of the Inflation Reduction Act (IRA), including the Clean Fuels Production Credit (45Z). However, farm-state Republicans are pushing back against eliminating this credit, given its importance to their constituencies.
China’s record mergers in $8 trillion small banking sector raise future risks... China oversaw its largest-ever wave of rural bank mergers last year, a Reuters review of official data showed, but analysts say Beijing’s efforts to tackle risks in the small banking sector could end up creating more problems down the road. Many of the roughly 4,000 small Chinese banks are backed by indebted provincial governments and largely funded via short-term money market and interbank borrowings, potentially jeopardizing financial stability in the event a few of them fail. At least 290 rural Chinese banks and rural cooperatives were merged into larger regional lenders in 2024, according to Reuters calculation of regulatory and company filings over the past 12 months. It was the most sweeping consolidation since China’s small rural commercial banks were transformed in early 2000 from socialist-style, rural cooperatives to serve farmers and small enterprises overlooked by major state banks.
Cash cattle trade lower... The heavy long liquidation in cattle futures triggered an early start to cash cattle activity, with initial prices mostly around $3.00 lower than last week. With packers slowing kills in an effort to mitigate poor margins and manage tight supplies and feedlots current on marketings, this week’s negotiated cash trade may be limited in size.
Cash hog fundamentals continue to strengthen... The CME lean hog index is up another 44 cents to $86.19 as of Feb. 10, extending the seasonal price climb over the past month. The pork cutout firmed a dime on Tuesday to $99.72, also extending its season price rise since early January.
Overnight demand news... South Korea purchased 115,000 MT of feed wheat – 55,000 MT to be sourced from Australia and 60,000 MT optional origin – and tendered to buy up to 210,000 MT of corn from the U.S., South America or South Africa. Japan is seeking 123,979 MT of milling wheat via its weekly tender. Jordan tendered to buy up to 120,000 MT of optional origin milling 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Meat Price Spreads — ERS
- 2:00 p.m. Dairy Monthly Tables and Dairy Quarterly Data — ERS
- 2:00 p.m. Season Average Price Forecasts — ERS
- 2:00 p.m. Wheat Data — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Vegetables - Annual — NASS