Good morning!
Grains mostly weaker overnight... Corn, soybeans and wheat have turned mostly weaker early this morning after trading higher at points earlier in the overnight session. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are 5 to 6 cents lower, winter wheat markets are 2 to 4 cents lower and spring wheat is mixed. The U.S. dollar index is up around 150 points and front-month crude oil futures are about 50 cents higher.
Slowdown in jobs growth expected... Economists polled by Reuters expect the Labor Department to report non-farm payrolls increased 170,000 in January, which would be down from 256,000 jobs added the previous month. The unemployment rate is expected to hold at 4.1%. The report will include annual revisions, with expectations 2024 payroll numbers will be revised down around 800,000 jobs due to past overstatements. Due to revisions, confusion is inevitable, but the broader takeaway remains the jobs market remained strong in 2024. Despite the political noise, these revisions reflect a statistical system functioning as intended, aligning estimates with more reliable data.
China adds more sanctions on U.S. companies... China’s government added two American firms — biotech company Illumina and fashion retailer PVH Group, owner of Calvin Klein and Tommy Hilfiger — to its unreliable entities list, saying they “violated normal market trading principles.” The move significantly hampers the companies’ ability to do business in China.
China blames U.S. ‘sabotage’ for Panama’s departure from Belt and Road Initiative... China opposes the U.S. “smearing and sabotage” of the Belt and Road Initiative in Panama through “pressure and coercion,” its foreign ministry said, after the Central American nation decided to exit the program. Panama has formally presented a document to exit the Belt and Road Initiative, President Jose Raul Mulino said on Thursday, after recently meeting with U.S. Secretary of State Marco Rubio. Mulino faces a crucial test in a call today with President Donald Trump. While Panama has already made concessions, including restricting Chinese influence and cooperating on border security, Mulino’s only leverage lies in legal arguments, diplomacy and a strategic appeal to Trump’s interests, the Wall Street Journal reports. It says that while Panama remains one of the U.S.’s closest allies in the region, Mulino’s leadership will be tested as he navigates this high-stakes geopolitical showdown.
Global food price index declines in January... The UN Food and Agriculture Organization global food price index declined 1.6% in January, as decreases in prices of sugar, vegoils and meat more than offset increases in those for dairy products and cereal grains. Compared to year-ago, prices rose 8.1% for meat, 20.4% for dairy and 24.9% for vegoils, while values fell 6.8% for cereal grains and 18.5% for sugar.
Philippines delays Vietnamese rice cargoes... Importers in the Philippines have delayed purchases of around 350,000 MT of Vietnamese rice and have been renegotiating deals, after a steep decline in prices, two trade sources with direct knowledge of the situation told Reuters. Rice prices in key exporting countries have dropped to about two-year lows after India eased restrictions on overseas sales last year. The sources said rice importers had signed deals at around $620 per metric ton, free on board, for Vietnamese fragrant rice late last year but now the price has dropped to around $500 per ton.
Greer’s trade priorities: Market access, biofuels and China review... Jamieson Greer, President Trump’s nominee for U.S. Trade Representative, outlined key trade policy goals, focusing on agricultural markets, biofuels and China’s Phase 1 trade deal. Greer wants to open new markets for U.S. agricultural exports, targeting high tariff barriers in countries like India and Turkey. He pledges to reassess China’s compliance with the Phase 1 trade deal, which fell short of purchase commitments, reaching only about 58% of its commitments by the end of 2021. Greer seeks to lower tariff barriers, particularly addressing Brazil’s ethanol tariffs and the UK’s potential restrictions on crop-based biofuels. With the global sustainable aviation fuel market expected to grow significantly, Greer and U.S. lawmakers see an opportunity for American biofuel feedstocks to meet this demand. His trade strategy approach leans toward targeted trade policies rather than sweeping tariffs, drawing from his experience with the U.S.-Mexico-Canada Agreement. This aligns with concerns from some industry representatives about potential retaliation if the U.S. implements across-the-board tariffs.
Vought confirmed as OMB director, more Senate votes for Trump nominees next week... The Senate confirmed Russ Vought as the Director of the White House Office of Management and Budget (OMB) in a 53-47 party-line vote. Previously serving in the role during the first Trump administration, Vought’s views on executive budgetary power have drawn scrutiny. Expect the Senate to move through several nominations next week, including Tulsi Gabbard for director of national intelligence, Robert F. Kennedy Jr. for HHS secretary, Howard Lutnick for secretary of Commerce, Brooke Rollins for USDA secretary and Kelly Loeffler to be administrator of Small Business Administration.
Unions sue Trump administration over USAID shutdown... Unions representing government employees filed a lawsuit against the Trump administration on Thursday to block efforts to dismantle the U.S. Agency for International Development (USAID). The lawsuit follows actions by Elon Musk’s Department of Government Efficiency (DOGE), which locked staff out of internal systems and placed thousands on administrative leave. The administration reportedly slashed USAID’s workforce from over 10,000 to fewer than 300 employees. The American Foreign Service Association (AFSA) and the American Federation of Government Employees (AFGE) are seeking an injunction to halt the agency’s shutdown, citing a global humanitarian crisis and risks to U.S. national security. The suit demands the restoration of USAID’s operations, including staffing, funding and digital infrastructure.
USDA grant freeze sparks congressional inquiry... Democratic lawmakers are pressing USDA for answers regarding a sudden funding freeze that has halted payments from major programs, including grants already awarded under the Partnerships for Climate-Smart Commodities. Democratic Reps. Angie Craig (Minn.), Chellie Pingree (Maine) and Sanford Bishop (Ga.) expressed deep concerns over the unexpected stoppage, which has affected USDA’s National Institute of Food and Agriculture and multiple organic initiatives. While funding portals for some organic programs have reportedly reopened, climate-smart grant recipients remain uncertain about their status.
China’s foreign reserves unexpectedly rise in January, gold reserves climb... China’s foreign exchange reserves $7 billion last month to $3.209 trillion, as the yuan weakened 0.7% while the dollar was little changed against major currencies. Meanwhile, China’s central bank added gold to its reserves in January for a third straight month. China’s gold reserves stood at 73.45 million fine troy ounces at the end of January, versus 73.29 million troy ounces a month earlier. The value of China’s gold reserves rose to $206.53 billion at the end of last month from $191.34 billion at the end of December.
Pork exports finish 2024 on a strong note... The U.S. exported 645.8 million lbs. of pork during December, the second most for the month behind 2019 and the highest monthly tally since April 2024. For 2024, pork shipments totaled 7.115 billion lbs., up 291.3 million lbs. (4.3%) from the previous year, fueled by a 3.7% increase to top buyer Mexico and a 12.0% jump to South Korea. Beef exports totaled 258.9 million lbs. in December. In 2024, beef shipments reached 3.003 billion lbs., down 34.9 million lbs. (1.1%) from the previous year as reduced exports to South Korea, China and Canada more than offset increases to Japan, Mexico and Taiwan.
Cattle futures pull cash prices lower... Cattle futures faced heavy long liquidation Thursday, which triggered cash cattle sales at lower prices in both the Southern Plains and northern market. On average, cash cattle have declined around $3.00, ending the extended string of record prices.
Hogs shake off cattle pressure in favor of rising cash prices... Lean hog futures faced early selling pressure on spillover from cattle on Thursday but bounced back to settle modestly higher amid support from the rising cash market. The CME lean hog index is up another 45 cents to $85.05 as of Feb. 5.
Overnight demand news... South Korea purchased 63,000 MT of corn to be sourced from the U.S., South America or South Africa.
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. Employment Situation — BLS
- 2:00 p.m. U.S. Agricultural Trade Data Update ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC