Good morning!
Grains firmer overnight... Corn and soybean futures extended Friday’s strong gains during the overnight session, while wheat also traded higher. As of 6:30 a.m. CT, corn futures are trading 2 to 4 cents higher, soybeans are 7 to 10 cents higher and wheat futures are 5 to 8 cents higher. The U.S. dollar index is 425 points higher and front-month crude oil futures are around $1.50 higher.
Brazil to stay mostly wet, Argentina could get temporary relief late this week... Forecasts call for rains to continue across central Brazil during the next two weeks, which could hinder early soybean harvest. Only scattered rains are expected in dry far southern areas of Brazil. Argentina will be hot and dry the bulk of this week, though some temporary relief could come via rains and more seasonal temps Friday and Saturday. There’s potential for some additional rains in Argentina during the second weekend of the two-week outlook.
Brazil’s soybean harvest starts slower than year-ago... Brazil’s soybean harvest reached 0.3% as of last Thursday, according to AgRural, behind 2.3% on this date last year. The firm says there’s strong yield potential in centra Brazil, though rains are hindering harvest activity and if that continues it could hurt crop quality. Heat and moisture stress is a concern in far southern Brazil. Brazil’s first crop corn harvest reached 1.3%. Safrinha corn planting won’t turn active until soybean harvest accelerates.
China’s soy imports record-large in 2024... China imported 7.94 MMT of soybeans in December, up 790,000 MT (11%) from November but down 1.88 MMT (19.1%) from last year. In 2024, China imported a record 105.03 MMT of soybeans, up 6.5% from the previous year.
China posts record trade surplus in 2024... China’s trade surplus soared to $104.84 billion in December, the largest since February. Exports jumped 10.7% to $335.63 billion in December, the second highest month on record and behind only December 2021. Imports rose 1% to $230.79 billion. China’s trade surplus surged to a record $992 billion last year, driven by a 7.1% rise in exports. The trade surplus with the U.S. narrowed to $33.5 billion in December from $34.9 billion the previous. For 2024, the trade surplus with the U.S. increased 5.9% to $992.16 billion, with exports advancing 5.9% to $3.58 trillion while imports rose 1.1% to $2.59 trillion.
China flags more policy measures to bolster yuan... China announced more tools to support its weak currency on Monday, unveiling plans to pump more dollars into Hong Kong to bolster the yuan and to improve capital flows by allowing companies to borrow more overseas. The People’s Bank of China (PBOC) raised the limits for offshore borrowings by companies and will substantially increase the proportion of China’s foreign exchange reserves in Hong Kong, without providing details. Authorities also warned again against speculating against the yuan.
U.S. probe finds China unfairly dominates shipbuilding, paving way for penalties... The Biden administration has concluded that China uses unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, three sources familiar with the results of a months-long trade investigation told Reuters. Investigators concluded that China targeted the shipbuilding and maritime industry for dominance, using financial support, barriers for foreign firms, forced technology transfer and intellectual property theft and procurement policies to give its shipbuilding and maritime industry an advantage, said one of the sources. Beijing also “severely and artificially suppressed China’s labor costs in the maritime, shipbuilding and logistics sectors,” that person added, citing excerpts of the report. The probe cites data showing that China’s share of the $150 billion global shipbuilding industry has expanded to over 50% in 2023 from around 5% in 2000, largely aided by government subsidies, while once dominant U.S. shipbuilders have seen their share dwindle below 1%. This could pave the way for tariffs or port fees on Chinese-built vessels. The U.S. Trade Representative’s office will release its findings later this week.
APK-Inform raises Ukraine’s corn export forecast... Analyst APK-Inform forecasts Ukraine will export 37.79 MMT of grain in 2024-25, up 490,000 MT from its prior outlook. It raised the country’s corn export forecast by 500,000 MT to 20.5 MMT due to a bigger production estimate.
The week ahead in Washington... President Joe Biden today will deliver a foreign policy speech from the State Department, highlighting his administration’s efforts to “strengthen America and lead the world.” President-elect Donald Trump’s Cabinet nominees are set to testify before the Senate this week as Republicans aim to secure their confirmations shortly after the Jan. 20 inauguration. Key economic data this week includes U.S. producer prices on Tuesday and consumer inflation on Wednesday. The Fed’s Beige Book highlighting economic conditions in the 12 districts also will be released on Wednesday. Ag markets will focus on Wednesday’s NOPA soybean crush data for December.
Biden administration gives Calumet loan for renewable fuels plant expansion... The Biden administration approved a $1.44 billion loan guarantee for Calumet to expand its renewable fuels plant in Great Falls, Montana. Announced by the Energy Department, the financing — totaling $1.44 billion in principal and $233 million in capitalized interest — will support the production of sustainable aviation fuel, renewable diesel, and renewable naphtha using vegetable oils, fats and greases. Of note: The Energy Department’s Loan Programs Office may be killed under the Trump administration, meaning any deals not closed by Jan. 20 could be in jeopardy.
U.S. pork exports stay strong, beef shipments rise in November... The U.S. exported 643.5 million lbs. of pork in November, a record for the month and the highest monthly tally since April. Pork shipments increased 60.7 million lbs. from October and 36.4 million lbs. from year-ago. Through the first 11 months of 2024, pork exports totaled 6.469 billion lbs., up 289.3 million lbs. (4.7%) from the same period the previous year. USDA trimmed its 2024 pork export forecast by 10 million lbs. to 7.108 billion lbs., though that would be up 4.2% from 2023. The U.S. exported 253.1 million lbs. of beef during November, up 12 million lbs. from October and 24 million lbs. more than last year. Through the first 11 months of 2024, beef shipments totaled 2.744 billion lbs., down 42.9 million lbs. (1.5%) from the same period the previous year. USDA raised its 2024 beef export forecast to 2.995 billion lbs., down 1.4% from 2023. USDA made no changes to its 2025 pork and beef export forecasts. Pork shipments are expected to rise another 3.1% this year, while beef exports are projected to fall 13.4%.
China’s meat imports rise in December but fall in 2024... China imported 611,000 MT of meat in December, up 30,000 MT (5.2%) from the previous month. For 2024, China imported 6.67 MMT of meat, down 710,000 MT (9.6%) from the previous year.
Wholesale beef prices continue to strengthen... Wholesale beef prices jumped $2.06 to $332.84 for Choice and $5.79 for Select to $314.14 on Friday. While packer margins remain in the red, surging wholesale beef prices have improved those levels and kept packers actively bidding for cash cattle. Cash prices surged to another record high last week.
Cash hog index continues price slide... The CME lean hog index is down another 16 cents to $80.43 as of Jan. 9, the lowest level since the beginning of March. February lean hog futures finished last Friday $2.12 above today’s cash quote, signaling traders sense a price recovery over the next month.
Weekend demand news... Taiwan purchased 65,000 MT of corn to be sourced from the U.S., Brazil, Argentina 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
- 10:00 a.m. Weekly Export Inspections — AMS
- 2:00 p.m. Turkey Hatchery — NASS