Good morning!
Corn and beans firmer, wheat mixed overnight... Corn and soybeans posted mild gains overnight, while wheat had a varied tone. As of 6:30 a.m. CT, corn futures are trading a penny higher, soybeans are 1 to 2 cents higher, winter wheat markets are unchanged to 2 cents lower and spring wheat futures are 2 to 4 cents higher. The U.S. dollar index is around 120 points higher and front-month crude oil is anchored near unchanged this morning.
MLK Jr. Day schedule... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed Monday, Jan. 20, for Martin Luther King Jr. Day. There will be no Pro Farmer updates Monday. Grain markets resume trading with the overnight session at 7:00 p.m. CT on Monday. Livestock markets reopen at 8:30 a.m. CT. on Tuesday, Jan. 21.
Chinese buyers switch to cheaper Brazilian soybeans ahead of Trump’s return... Chinese soy processors have turned to competitively priced Brazilian cargoes instead of U.S. soybeans amid fears Washington will impose tariffs after President-elect Donald Trump takes office on Jan. 20. Chinese processors have secured nearly all of their cargoes from Brazil for first quarter shipment, three trade sources told Reuters. “Both state-owned and private crushers, all of them are taking Brazilian beans. It is a 100% shift to Brazil,” one source said.
Bloomberg: South Korea may consider more U.S. ag imports in bow to Trump... South Korea may consider a plan to increase U.S. ag imports to help reduce the trade imbalance between the two countries should it emerge as a point of tension with the incoming Trump administration, people familiar with the matter told Bloomberg. The idea is part of contingency plans Seoul has been crafting as it prepares for Trump’s return to the White House next week. For agricultural imports, the government could expedite talks on certain pending imports or temporarily reduce or suspend duties to encourage greater purchases, the people said. South Korea is the sixth largest market for U.S. ag shipments. South Korea’s trade ministry and ag ministry both said Seoul is not considering ramped-up U.S. ag imports.
Cofco forced to resell wheat cargoes as Beijing shields farmers... China’s biggest state-run crop trader has been forced to resell at least two cargoes of imported wheat, as Beijing extends curbs on foreign purchases to bolster the domestic industry, Bloomberg reported. Cofco Corp. this month resold the shipments of Australian wheat due to arrive in China during January to April to countries including Indonesia and Thailand, according to people familiar with the sales. Chinese authorities asked traders and processors last year to buy less grain from overseas in order to support the local industry.
Argentina weather may dry down again in early February... The La Niña bias that fueled dry weather in Argentina since last fall remain in place, but World Weather Inc. says conditions have changed enough to allow weakness in the upper air wind flow to support near-term opportunities for rain. But the resulting rainfall may still be erratic and lighter than usual. While conditions are no longer supportive of absolute dryness and hot temperatures, they may return later in February.
Argentine farmer groups ask for tax relief amid ‘critical’ situation... Argentina’s largest agricultural groups on Thursday asked the government to offer tax relief for the sector, which they said was in a “critical” situation due to a drought and low crop prices. The leaders of four major agricultural groups requested a meeting with the ag secretary and the economy ministry to discuss potential tax cuts and a lifting of export taxes. Argentina’s government taxes soybean exports at 33%, soy products at 31% and corn and wheat at 12%.
World Bank warns U.S. tariffs could reduce global growth outlook... The World Bank on Thursday kept global economic growth at 2.7% for both 2025 and 2026 but warned that U.S. across-the-board tariffs of 10% promised by Trump could reduce that by 0.3 point next year if trading partners retaliate. Such tariffs could cut U.S. growth, forecast to reach 2.3% in 2025, by 0.9% if retaliatory measures are imposed, the bank said. But it noted that U.S. growth could also increase by 0.4 percentage point in 2026 if U.S. tax cuts were extended.
China hits growth target in 2024 but uncertainty looms... China’s economy expanded 5.4% from year-ago in the fourth quarter, up from 4.6% in the third quarter and the fastest since early 2023. For the full year, GDP grew 5.0%, aligning with Beijing’s 2024 target, though down from a 5.2% rise in 2023. China’s economy has grown for 10 consecutive quarters, though economists note the economic recovery is still fragile and could be derailed if stimulus fails to keep pace with expected U.S. tariff increases.
China’s industrial production, retail sales top expectations... China’s industrial production grew 6.2% from year-ago in December, surpassing market estimates and the growth rate of 5.4% in November. It was the fastest pace in industrial output growth since April. China’s retail sales rose 3.7% from last year in December, accelerating from November’s three-month low of 3.0% and exceeding market expectations of 3.5%.
Euro zone inflation rises for third straight month in December... The annual consumer inflation rate rose to 2.4% in December, the third straight monthly increase and the highest since July. Core inflation excluding food, energy, alcohol and tobacco increased 2.7%, the same as the three previous months.
China’s pork output falls for first time in four years... China produced 57.06 MMT of pork in 2024, down 1.5% from 2023 and the first annual decline in four years. Hog slaughter totaled 702.56 million head last year, down 3.3% from 2023. In the fourth quarter, pork production fell 1.8% from year-ago to 14.66 MMT. China’s hog herd totaled 427.43 million head at the end of December, down 1.6%. China’s beef output rose 3.5% to 7.79 MMT in 2024, while poultry output increased 3.8% to 26.6 MMT and lamb and mutton decreased 2.5% to 5.18 MMT.
Cash cattle trade steady, but ideas of a short-term top... Packers have paid mostly steady prices for cash cattle this week and it appears weaker values are likely near-term. After weeks of chasing supplies, packers appear to have near-term needs relatively well covered.
Cash hog index firms, pork cutout slips... The CME lean hog index is up another 9 cents to $81.91 as of Jan. 15, marking the fourth consecutive daily gain though the net advance has been only 76 cents and has lessened each day. The pork cutout slipped 44 cents to $90.39.
Overnight demand news... Thailand purchased 195,000 MT of feed wheat – 67,000 MT to be sourced from the U.S. or Australia and 128,000 MT to be sourced from Australia.
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
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC