First Thing Today | January 14, 2025

Corn, soybeans and wheat mildly pulled back from recent strong gains during the overnight session.

Pro Farmer's First Thing Today
Pro Farmer’s First Thing Today
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Grains weaker overnight... Corn, soybeans and wheat mildly pulled back from recent strong gains during the overnight session. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents lower, soybeans are 2 to 4 cents lower and wheat futures are 1 to 3 cents lower. The U.S. dollar index is more than 300 points lower and front-month crude oil futures are modestly weaker.

Conab raises Brazilian soybean production forecast, still below others... Brazilian crop estimating agency Conab raised its 2024-25 soybean crop estimate 110,000 MT from last month to 166.32 MMT, though that’s still below most private crop forecasters that are at or slightly above 170 MMT. Conab trimmed its corn production forecast by 80,000 MT to 119.55 MMT. The soybean and corn production adjustments were due to changes in planted acreage. Conab kept its 2024-25 Brazilian export forecasts at 105.5 MMT for soybeans and 34 MMT for corn.

Cordonnier lowers Brazil bean crop, Argentine production forecasts... South American crop consultant Dr. Michael Cordonnier lowered his Brazilian soybean crop estimate 1 MMT to 170 MMT, citing dryness concerns in far southern production areas and yields in central Brazil maybe not being as strong as farmers expected due to constant overcast conditions. Cordonnier left his Brazilian corn crop forecast at 125 MMT. For Argentina, Cordonnier cut his soybean and corn crop forecasts 1 MMT each to 52 MMT and 49 MMT, respectively, due to hot, dry weather.

India may relax sugar export restrictions... ET Now News reports India is expected to relax restrictions on sugar exports, citing sources familiar with the situation. Approval for the export of 10 lakh tonnes (1 MMT) of sugar is likely soon. India capped sugar exports at 11 MMT in 2021-22, 6 MMT in 2022-23 and didn’t allow any shipments in 2023-24. However, India’s sugar output in 2024-25 is expected to be the lowest since 2019-20 and less than domestic consumption, which has some anticipating the export ban will be extended.

Bloomberg: Trump team studies gradual tariff hikes... Members of President-elect Donald Trump’s incoming economic team are discussing slowly ramping up tariffs month by month, a gradual approach aimed at boosting negotiating leverage while helping avoid a spike in inflation, Bloomberg reported, citing people familiar with the matter. One idea involves a schedule of graduated tariffs increasing by about 2% to 5% a month and would rely on executive authorities under the International Emergency Economic Powers Act, the people said. The proposal is in its early stages and has not yet been presented to Trump, the people said. Trump has denied previous reports suggesting his tariffs policy will be rolled back from levels he promised during his presidential campaign.

Mexico announces plan to boost local industry, nearshoring to reduce imports from China... Mexican President Claudia Sheinbaum unveiled “Plan Mexico,” aimed at reducing imports from China and strengthening North American trade ties. The initiative seeks to bolster local industries by providing tax incentives for nearshoring and increasing the local content of Mexican-made goods. Key goals of “Plan Mexico” include increasing renewable energy capacity, streamlining manufacturing permits and raising public and private investment to over 25% of GDP. By 2030, the government aims to enhance local content in sectors like automotive manufacturing, with a target of 15% Mexican-made components per vehicle. A decree outlining incentives for domestic and foreign firms will be published on Jan. 17. Finance Minister Rogelio Ramirez de la O highlighted the potential economic gains for the region, citing a 1.2% GDP boost for Mexico if 10% of Chinese imports are replaced with North American production. Sheinbaum reaffirmed the importance of the U.S.-Mexico-Canada Agreement in countering China’s economic influence, despite tariff threats from incoming U.S. President Donald Trump.

U.S. finalizes rule banning smart cars with Chinese, Russian technology... The Biden administration has finalized a rule that effectively bans new personal smart cars with Chinese and Russian technology from American roads and takes steps to allow President-elect Donald Trump to extend those restrictions to commercial vehicles. The U.S. Commerce Department’s Bureau of Industry and Security announced its final rule, saying technologies from China and Russia “present an undue and unacceptable risk to U.S. national security.” The rule prohibits the import or sale of connected vehicles with specific pieces of hardware or software that have a “sufficient nexus” to China or Russia or the sale of those components separately. It also bans manufacturers with links to Russia or China from selling U.S.-made vehicles within the United States. The finalized auto rule applies only to passenger vehicles weighing 10,000 pounds or less. Some of the bans take effect as soon as model year 2027 with others as late as model year 2030. Commerce said it intended to begin a separate process directed at commercial vehicles, like buses and trucks, though it would be up to the incoming administration to finalize those restrictions.

USDA restricts German animal products in response to FMD outbreak... USDA took swift action in response to Germany’s recent foot-and-mouth disease (FMD) outbreak, implementing significant import restrictions on livestock and animal products from the country. USDA’s Animal and Plant Health Inspection Service (APHIS) has prohibited the import of German cattle, sheep, swine, and goats. Additional measures for horses, including pre- and post-import decontamination, have been put in place. Processed pork and ruminant products arriving via cargo now require either an APHIS Veterinary Services import permit or certification of treatment meeting APHIS standards. Imports of unprocessed animal products from Germany are now banned, with limited exceptions. USDA’s actions align with standard protocols for protecting domestic livestock from potential FMD introduction, highlighting the serious economic and agricultural risks associated with the disease.

USDA finalizes poultry payment guidelines, withdraws competition rule... USDA finalized a rule banning poultry companies from penalizing contract growers through pay deductions for underperforming flocks, restructuring the industry’s controversial tournament pay system. USDA Secretary Tom Vilsack emphasized that the rule, set to be published Thursday, aims to create a fairer payment structure for growers burdened by heavy debt and limited control over inputs. The new regulation also caps performance-based pay at 25% and mandates transparency in capital improvement requirements for contract renewals. Poultry companies must provide detailed information about capital improvement requirements for contract renewals. Industry pushback is expected, and the rule may face challenges under a new administration. The National Chicken Council has previously argued that such rules could lead to rigid, one-size-fits-all requirements that might stifle innovation and increase consumer costs. Notably, USDA has also withdrawn a Biden-era overhaul of the Packers and Stockyards Act, which was intended to address competition issues in the meat industry. This withdrawal, coming as the Trump administration is set to take over, marks a significant shift in agricultural policy direction.

Cash cattle rally may be ending... Cash cattle prices jumped another $3.65 last week to $202.58, marking a record high for a second consecutive week. Cash cattle prices have strengthened for eight consecutive weeks, surging $17.79 during that span. Cash sources say packers bought a lot of cattle last week, including some “with time.” After weeks of chasing supplies, it appears packers are no longer short-bought, suggesting the cash market may pull back this week.

Cash hog index halts price slide... The CME lean hog index is up 34 cents to $80.77 as of Jan. 10, halting the recent price decline. Price action in February lean hog futures over the past four sessions suggests traders believe a seasonal low is in place.

Overnight demand news... Japan is seeking 132,888 MT of milling wheat via its weekly tender.

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
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