Good morning!
Followthrough selling in corn and wheat, beans turn mixed... Corn and winter wheat futures extended losses from the two previous days overnight, while soybeans turned mixed this morning after facing pressure earlier in the session. As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents lower, soybeans are a penny lower to 1 cent higher and wheat futures are 1 to 4 cents lower. Front-month crude oil futures are modestly firmer, while the U.S. dollar index is around 300 points higher.
Weekly Export Sales Report out this morning... For the week ended Jan. 12, traders expect:
| 2022-23 expectations (in MT) | Last week (in MT) |
Corn | 250,000-800,000 | 255,687 |
Wheat | 75,000-400,000 | 90,803 |
Soybeans | 600,000-1,200,000 | 717,415 |
Soymeal | 0-250,000 | 3,343 |
Soyoil | 0-10,000 | 615 |
U.S. share of soybean exports to China declined in 2022... China’s soybean imports from the U.S. dropped 10% to 29 MMT in 2022, while Brazilian fell 6% to 54.4 MMT. Brazil maintained its 60% share of the Chinese soybean market, while the U.S. share slipped slightly under 32%.
Ukraine exports under Black Sea deal reach 18 MMT... As of Jan. 19, Ukraine had exported just over 18 MMT of grain under the Black Sea Grain Initiative, according to the Joint Coordination Center (JCC) in Istanbul, Turkey. A total of 1,316 ships (652 inbound and 664 outbound) have been inspected by JCC.
IMF chief: Global economic outlook not as bad, but don’t get too optimistic... International Monetary Fund (IMF) Managing Director Kristalina Georgieva said headline inflation was retreating and China’s reopening was expected to boost global growth. IMF forecasts China’s economy will outpace global growth of 2.7% this year, at 4.4%, after slipping below it for the first time in four decades last year. She also highlighted ongoing risks, including China’s growth resulting in higher oil and gas prices and the “horrible” war in Ukraine harming global confidence, particularly in Europe. Georgieva’s conclusion: “Be careful not to get on the other side of the spectrum from being too pessimistic to too optimistic. Stay in the middle of realism that seems to serve the world well.”
Lagarde: China reopening will add to inflationary pressures... China’s reopening from strict pandemic restrictions is likely to add to global inflationary pressures as the world’s largest consumer of raw materials ramps up commodity consumption, European Central Bank (ECB) President Christine Lagarde said. “There will be constraints, there will be more inflationary pressure coming out of that added demand in commodities and energy in particular,” Lagarde told a World Economic Forum panel.
Japan’s core inflation hits 4% for first time in four decades... Core consumer-price inflation in Japan reached a fresh 41-year high of 4% in December, adding to pressure on the Bank of Japan to phase out ultra-low interest rates. But Bank of Japan Gov. Haruhiko Kuroda has repeatedly said Japan doesn’t yet have sustainable inflation because recent price increases are caused mainly by the higher cost of energy.
China again keeps benchmark lending rate unchanged... China kept benchmark lending rates unchanged for a fifth straight month on Friday, as expected. The one-year loan prime rate (LPR), on which most new and outstanding loans are based, was left at 3.65%. The five-year LPR, a reference rate for mortgages, was held at 4.30%. But economists say future cuts are possible as the central bank has pledged to support the Covid-ravaged economy, which grew just 3% in 2022, the worst performance since 1976 excluding 2020.
Feedlot inventories again expected under year-ago... USDA’s Cattle on Feed Report Friday afternoon is expected to show the feedlot inventory under year-ago for the fourth consecutive month. Based on the pre-report estimates, traders expect the feedlot inventory to fall 3.2% to the lowest Jan. 1 total since 2018. December placements are expected to have dropped 9.0%, with marketings seen at 5.3% under the year-ago level.
Futures fall as cash cattle negotiations remain at standstill... Nearby live cattle futures tumbled $1 or more Thursday, with the February contract finishing 83 cents below last week’s average cash price. That suggests traders’ attitudes toward the cash market have deteriorated. But feedlots showed no willingness to move cash cattle at lower prices.
Cash hog index continues to fall... The CME lean hog index is down another 57 cents to $73.28 (as of Jan. 18), the lowest level since the first trading session last year and nearly $49 below the August peak. February lean hog futures finished Thursday $3.37 above the cash index, roughly the same premium traders have maintained in the front-month contract recently amid the persistent cash decline.
Overnight 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
- 7:30 a.m. Weekly Export Sales — FAS
- 8:00 a.m. Food Expenditure Series — ERS
- 11:00 a.m. Cotton Ginnings — NASS
- 2:00 p.m. Cattle on Feed — NASS
- 2:00 p.m. Chickens and Eggs — NASS
- 2:00 p.m. Coffee — NASS
- 2:00 p.m. North American Potatoes — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC