Good morning!
No overnight grain trade... There was no overnight grain trade, as markets remained closed for New Year’s Day. Grain and livestock markets will resume trading at 8:30 a.m. CT. The U.S. dollar index is more than 200 points higher and front-month crude oil futures are around $1.00 higher.
FBI investigates Bourbon Street attack as terrorism... The FBI is investigating the Bourbon Street attack in New Orleans early Wednesday as a terrorism case after discovering an Islamic State flag on the suspect’s vehicle and a bomb nearby. The suspect, Shamsud-Din Jabbar, a 42-year-old U.S. citizen from Texas, drove a truck into a crowd of New Year’s revelers. The FBI said it believes Jabbar didn’t act alone and is actively pursuing four others who were observed on video planting IEDs elsewhere in the city. Meanwhile, federal authorities are investigating whether there may be a link with a deadly blast outside Trump International Hotel in Las Vegas later Wednesday.
Weekly export sales pushed back to Friday... Due to Wednesday’s New Year’s holiday, export sales data for the week ended Dec. 26 will be published Friday morning.
Slowdown in soy crush, higher corn ethanol use expected... Analysts surveyed by Bloomberg expect USDA to report November soybean crush totaled 208.1 million bu., which would be down 7.7 million bu. (3.6%) from the all-time record in October but up 8 million bu. (4.0%) from last year. Corn-for-ethanol use is expected to total 463.7 million bu., up 3.2 million bu. (0.7%) from October and 6.5 million bu. (1.4%) above November 2023.
Indonesia’s B40 palm oil delay causes market uncertainty... Indonesia has yet to implement a higher mandatory blend of biodiesel planned for Jan. 1 as industry participants await technical details of the new regulation, causing confusion among palm oil traders. The government had pledged to mandate a 40% mix of palm oil-based fuel in biodiesel from Jan. 1, known as B40, from a 35% blend. As of Thursday, Indonesian state energy firm Pertamina, which operates the country’s largest petrol station network, and biodiesel producers group APROBI said they were waiting for the relevant official decrees before selling the fuel. Members of APROBI cannot draw contracts for biodiesel distribution without a decree from the government, Secretary General Ernest Gunawan said.
Mexico exempts wheat, ammonium sulfate from tariffs... Mexico said products including wheat, wheat flour and ammonium sulfate will be exempt from tariffs during 2025, according to a presidential decree.
Egypt’s Mostakbal Misr receives its first imported wheat shipment... Egypt’s state grain buyer, Mostakbal Misr for Sustainable Development, received its first imported wheat shipment on Dec. 30, port data seen by Reuters showed. The 28,000-MT shipment arrived in Alexandria port onboard the Mikhail Nenashev. It is the first shipment for Mostakbal Misr, which took over Egypt’s supply of food commodities in December, replacing the General Authority for Supply Commodities that held the responsibility for decades.
India’s sugar production plunges... Indian mills have produced 9.54 MMT of sugar since the season began on Oct. 1, down 15.5% from the same period last year, Indian Sugar and Bio-Energy Manufacturers Association (ISMA) said, as cane yields fell in the three biggest producing states. Lower output in the world’s second-largest sugar producer could eliminate the possibility of India allowing exports during 2024-25, ISMA noted.
Potential dockworker strike threatens U.S. ports again... A renewed threat of a dockworker strike looms over America’s East and Gulf Coast ports. Leaders from a U.S. dockworkers’ union and the group that represents their employers are set to resume contract talks on Jan. 7. Maersk, the world’s second-largest container carrier, has advised customers to remove cargo from these ports before Jan. 15, warning of a possible coast-wide strike starting Jan. 16 if no agreement is reached. The International Longshoremen’s Association (ILA), representing 47,000 cargo handlers, has been in stalled contract negotiations with the U.S. Maritime Alliance for over two months. Although a temporary deal in October averted a crisis with a 62% wage increase over six years, the key issue of automation remains unresolved. As the three-month delay ends, fears of port disruptions resurface, potentially impacting supply chains and consumer confidence.
Chinese stocks tumble, PBOC supports currency... Chinese stocks posted their worst start to a year since 2016, as investors braced for economic uncertainties amid weaker-than-expected manufacturing data and an anticipated hike in tariffs. Meanwhile, the People’s Bank of China set the so-called fixing for the yuan at a stronger-than-expected 7.1879 per dollar after it slid to the weakest level since 2022 at year-end in offshore trading.
China’s manufacturing sector shows slower expansion in December... China’s Caixin/S&P Global manufacturing purchasing managers index (PMI) edged down to 50.5 in December from 51.5 the previous month, though that marked expansion for a third consecutive month. Both output and new orders expanded at slower rates while foreign orders shrank after increasing at the fastest pace for seven months in the prior month.
WAPO: Chinese hack of U.S. Treasury breached sanctions office... Chinese government hackers breached the U.S. Treasury office that administers economic sanctions, the Washington Post (WAPO) reported on Wednesday, identifying targets of a cyberattack Treasury disclosed earlier this week. Citing unnamed U.S. officials, the Washington Post said hackers compromised the Office of Foreign Assets Control and the Office of Financial Research and also targeted the office of U.S. Treasury Secretary Janet Yellen. Asked about the paper’s report, a spokesperson for the Chinese Embassy in Washington, said the “irrational” U.S. claim was “without any factual basis” and represented “smear attacks” against Beijing.
Ukraine shuts down major Russian gas transit pipeline to Europe... Ukraine has halted the flow of natural gas through a key pipeline connecting Russia to Europe, marking a significant escalation in the energy battle tied to the war in Ukraine. The decision not to renew the transit agreement effectively cuts off Russia’s last major gas corridor to European markets. This move aims to undermine Moscow’s ability to fund its war efforts and reduce its leverage over European energy markets. While Ukraine and its allies have prepared for the disruption, it risks retaliation from Russia and potential regional instability. European nations like Slovakia and Moldova are particularly vulnerable, though alternative energy supplies and reserves are expected to mitigate immediate crises.
Euro zone manufacturing activity shrank further in December... The HCOB euro zone manufacturing PMI compiled by S&P Global slipped to 45.1 in December from 45.2 the previous month. That was the sharpest decline in manufacturing activity in three months, extending the ongoing two-year contractionary streak. Output declined in major economies like France, Germany and Italy, while Spain saw modest growth.
HPAI outbreaks hit poultry operations in five U.S. states, Ontario... Highly pathogenic avian influenza (HPAI) has been confirmed in commercial broiler and turkey flocks across multiple U.S. states and Ontario, Canada. Broiler flocks affected: 227,500 chickens in Clay County, Arkansas (state’s first 2024 case); 210,000 chickens in Copiah County, Mississippi (second 2024 case); and 217,600 chickens in Johnson County, Nebraska (third 2024 case). Turkey flocks affected: 18,600 turkeys in Burnett County, Wisconsin (third 2024 case); and 14,900 turkeys in Cooper County, Missouri (fifth 2024 case). In Canada, HPAI was detected in a commercial flock in Oxford County, Ontario, marking the province’s seventh flock infection of the year.
Steady/firmer cash cattle trade expected... Given negative margins, packers aren’t expected to buy a lot of cattle this week, though cash sources expect prices to be no worse than steady with week-ago as feedlots have leverage. However, some cash sources feel packers are short-bought and may get more aggressive with bids.
Cash hog index, pork cutout drop... The CME lean hog index is down 8 cents to $84.27 as of Dec. 30, the third straight daily decline. The pork cutout dropped $4.02 on Tuesday to $90.30 amid sharp losses in all cuts except ribs.
Holiday demand news... Exporters reported no tenders or sales.
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 Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Cotton System — NASS
- 2:00 p.m. Fats & Oils — NASS
- 2:00 p.m. Grain Crushings — NASS