Good morning!
Grains solidly higher overnight... Corn, soybeans and wheat built on Tuesday’s price gains during the overnight session. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents higher, soybeans are 7 to 9 cents higher and wheat futures are 4 to 6 cents higher. The U.S. dollar index is more than 300 points higher and front-month crude oil futures are around 50 cents lower this morning.
Mild weather helps Russian winter crops avoid winterkill but conditions still poor... A mild winter with record warm temperatures in many agricultural regions of Russia is helping winter crops to survive, state weather agency chief Roman Vilfand said. But the weather agency estimates a record 38% of winter crops are in poor condition due to drought. He said warmer weather would bring spring seeding campaign forward by about five to seven days across Russia this year. Russian Agriculture Minister Oksana Lut earlier said 82% of winter crops were in good and satisfactory condition, far above the weather agency’s number due to differences in methodology and timing of data collection.
Russia’s 2024-25 grain exports to fall 20%... Russia’s grain export potential for 2024-2025 is 57 MMT, compared with record shipments of 72 MMT the previous season, Agriculture Minister Oksana Lut said. Russia’s grain exports reached 37 MMT during the first half of 2024-25, forcing Moscow to set lower quotas for the second half of the year “to ensure internal needs are met.”
Fed rate decision later today... The Fed is widely expected to pause its recent interest rate cuts at the conclusion of the two-day Federal Open Market Committee (FOMC) meeting this afternoon. There are no updated economic projections from Fed officials with this meeting, so wording and tone of the FOMC statement and Chair Jerome Powell’s press conference will be closely dissected for clues to the path of monetary policy moving forward.
Judge blocks Trump’s partial federal aid freeze amid legal challenge... Minutes before it was due to take effect at 5 p.m. ET on Tuesday, a federal judge blocked the Trump administration’s spending freeze that would have affected thousands of federal grant programs. U.S. District Judge Loren AliKhan granted a temporary halt, calling it a “brief administrative stay” to maintain the status quo. The ruling offers temporary relief to affected organizations, but the legal battle over Trump’s directive is far from over.
Farm Bureau pushes for migrant labor reform amid Trump crackdown... The American Farm Bureau Federation is prioritizing expanding the migrant farm workforce and adjusting wage requirements as it pushes Congress for labor policy changes. At its annual conference being held in Texas, the organization voted to advocate for year-round employment for seasonal workers and to challenge workplace regulations. USDA Secretary nominee Brooke Rollins has expressed support for Trump’s immigration policies but signaled openness to modifying the H-2A visa program. With over 300,000 visas issued in 2023, nearly 40% of U.S. farmworkers still lack legal status.
Trump administration offers federal workers resignation incentive amid workforce overhaul... The Trump administration is offering civilian federal workers pay through September if they resign by Feb. 6, marking a bold push to reshape the federal workforce. An email sent by the Office of Personnel Management outlined the plan, part of an effort to replace career federal employees with individuals aligned with the administration’s goals. This initiative follows President Trump’s executive order requiring federal workers to return to offices full-time. A White House official expects up to 10% of the federal workforce to accept the offer, which targets creating a more streamlined, performance-driven federal workforce. There are no officials U.S. government estimates of how many government workers may take the offer.
EU plans tariffs on ag products from Russia and Belarus, new sanctions... The European Union proposed imposing tariffs on the remaining agricultural products coming from Russia and Belarus that aren’t already facing duties, as well as some nitrogen-based fertilizers. There had been some concern about targeting the remaining agricultural products because of the potential effect on European food prices. Under the EU proposal, exports to non-EU countries, or transit of agricultural goods to those nations, wouldn’t be affected by the tariffs. Unlike sanctions, which require the unanimous support of 27 member states, these tariffs only need to be approved by 15 member states. The EU is also proposing a phased ban on imports of Russian aluminum as part of a broad sanctions package, Bloomberg reports. The package, which has been circulated among member states this week, also proposes sanctions that would cut more banks off from the SWIFT banking system, and actions targeting more than 70 dark-fleet vessels involved in shipping Russian oil.
Cattle futures still chasing cash market... Live cattle futures surged on Tuesday, with front-month futures scoring an all-time high on the continuation chart for a fifth straight day. Despite the $11.50 surge during that span, February live cattle futures still held a 64 cent discount to last week’s average cash cattle price on Tuesday’s settlement.
Traders build futures’ premiums to cash index... The CME lean hog index is up another 17 cents to $82.11 as of Jan. 27, extending the recent rebound. February lean hog futures finished Tuesday $1.79 above today’s cash quote, as traders are seemingly growing more confident a seasonal low has been posted.
Overnight demand news... Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Japan is seeking 89,134 MT of milling wheat via its weekly tender. Japan received no offers in its tender to buy 65,000 MT of feed wheat and 25,000 MT of feed barley. Bangladesh tendered to buy 50,000 MT of optional origin non-basmati parboiled rice.
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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 1:00 p.m. FOMC Meeting Concludes — Fed
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Egg Products — NASS