Good morning!
Grains weaker overnight... Corn and soybeans pulled back overnight from recent gains, while wheat mildly extended yesterday’s losses. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 6 to 8 cents lower and wheat futures are 1 to 2 cents lower. The U.S. dollar index is around 425 points lower and front-month crude oil futures are modestly weaker this morning.
House to hold speaker vote today... The House convenes at noon ET with a vote on speaker. House Republicans are preparing for today’s unpredictable speaker election, where incumbent Mike Johnson (R-La.) faces a challenging path to retain his gavel. With a razor-thin 219-215 majority, Johnson can afford only one GOP defection if all members vote. Rep. Thomas Massie (R-Ky.) has signaled opposition, while some others remain undecided. Johnson has emphasized the importance of avoiding theatrics, recalling the protracted 2023 speaker vote, and is striving for a first-ballot victory. Johnson has secured President-elect Donald Trump’s endorsement and has focused on uniting his party behind key agenda items like border security and tax reform. However, some Republicans demand assurances of a more conservative approach. Johnson’s potential ousting could create a leadership vacuum since there isn’t an obvious replacement and any disruption could weaken Republican cohesion, making it harder for the party to advance its agenda or align with Trump’s interests. If there is a confirmed House speaker today, the House will convene next Monday to certify Trump’s Electoral College victory.
Senate kicks off quietly as House steals the spotlight... The Senate’s opening day promises to be largely ceremonial, in contrast to the dramatic House speaker election. Senators will convene at noon ET to swear in new members, hear remarks from Majority Leader John Thune (R-S.D.) and Minority Leader Chuck Schumer (D-N.Y.), and address procedural matters. The Senate will adopt its organizing resolution, formally transitioning control of committees to the GOP. However, Cabinet confirmation hearings won’t begin until the week of Jan. 13, allowing more time for senators to meet with nominees, including former Rep. Tulsi Gabbard and Sen. Marco Rubio.
Weekly Export Sales Report out this morning... For the week ended Dec. 26, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) | |
| Corn | 800,000-1,400,000 | 1,711,266 |
| Wheat | 200,000-500,000 | 612,408 |
| Soybeans | 500,000-1,200,000 | 978,351 |
| Soymeal | 150,000-350,000 | 389,634 |
| Soyoil | 5,000-30,000 | 40,400 |
China/U.S. trade share hits historic low as new Trump tariffs loom... China’s trade with the U.S. fell to 11% of its total goods trade in 2024, its lowest since joining the World Trade Organization in 2001. Beijing has diversified exports, favoring Southeast Asia, and imports, relying more on Brazil and Australia for key commodities. With President-elect Donald Trump signaling potential hefty tariffs, Beijing braces for renewed trade tensions, though some analysts suggest future deals could see China boost U.S. imports to ease any conflict.
India’s palm oil imports fall to 9-month low as soyoil demand improves... India’s palm oil imports in December plunged 40% from the previous month to 503,000 MT – the lowest in nine months – as a rally in prices to a 2-1/2-year high prompted refiners to increase purchases of soyoil. India’s soyoil imports last month rose 3% from November to 420,000 MT, the highest in four months, while sunflower oil imports fell 22% to 265,000 MT. India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Indonesia to phase in B40 biodiesel... Indonesia’s Energy and Mineral Resources Minister signed a decree on Friday allocating 15.6 million kiloliters (KL) of biodiesel for 2025 distribution, while giving the industry until the end of next month to adapt to the higher 40% blend (B40) of the fuel. Of the total allocation for this year, 7.55 million KL is for the public service obligation, which covers sectors such as public transportation, whose sales will be subsidized by the country’s palm oil fund. BPDPKS, the agency in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% subsidy increase. To help finance that, Indonesia plans to increase its export levy for crude palm oil to 10% from the current 7.5%, but for that to happen, another official regulation is required.
Global food price index declines in December... The UN Food and Agriculture Organization global food price index declined 0.5% in December, as decreases in the prices of sugar, dairy, vegoils and cereal grains more than offset an increase for meat. The December index stood 6.7% above year-ago. For 2024 as a whole, the index declined 2.1% from the previous year. Compared to year-ago, prices rose 7.0% for meat, 17.0% for dairy and 33.5% for vegoils, while values fell 9.4% for cereal grains and 10.6% for sugar.
BloombergNEF: Global food demand poised to surge 70% by 2050... Global food demand could rise by as much as 70% by 2050, according to BloombergNEF, driven by population growth and rising incomes. Key factors include the global population reaching up to 10.8 billion and income-driven shifts toward higher-calorie diets rich in animal products and vegetable oils. Sub-Saharan Africa is expected to see particularly strong demand growth. Meeting this need will require a 47% to 61% increase in global crop production, posing significant environmental challenges.
China lets yuan weaken below psychological level it had been defending... The Chinese yuan breached the psychological level of 7.3 per dollar for the first time since late 2023, a level China had been defending throughout December, opening up room for the managed currency to drop further. The break may signal the People’s Bank of China (PBOC) is looking to accommodate mounting growth pressures through a weaker currency. Still, PBOC may not allow a rapid and disorderly decline as that may lead to financial instability. It can still use its fixing — which confines the currency’s trading onshore to a 2% range on either side — to guide expectations. Other tools at PBOC’s disposal include mopping up yuan liquidity in offshore trading and direct intervention in the FX market.
FT: China’s central bank likely to cut rates in 2025... PBOC said it is likely to cut interest rates from the current level of 1.5% “at an appropriate time” in 2025, the Financial Times (FT) reported. PBOC said it would prioritize “the role of interest rate adjustments” and move away from “quantitative objectives” for loan growth, FT reported, as it embarks on a program of interest rate reform that government advisors have called “an arduous task.” PBOC’s remarks align with policymakers’ commitment made last year toward creating a more market-driven interest rate curve. Analysts anticipate the central bank will make further changes this year to ensure credit demand is more responsive to monetary policy moves.
China will sharply increase funding from treasury bonds to spur growth in 2025... China will sharply increase funding from ultra-long treasury bonds in 2025 to spur business investment and consumer-boosting initiatives, a state planner official said. Special treasury bonds will be used to fund large-scale equipment upgrades and consumer goods trade-ins, said Yuan Da, deputy secretary-general of National Development and Reform Commission (NDRC). Under the program launched last year, consumers can trade-in old cars or appliances and buy new ones at a discount, while a separate one subsidizes large-scale equipment upgrades for businesses. Households also will be eligible for subsidies to buy three types of digital products this year, including cell phones, tablets, smart watches and bracelets, Yuan said.
USDA reopens comment period on EIS for HPAI... USDA’s Animal and Plant Health Inspection Service reopened the comment period on its draft programmatic environmental impact statement (EIS) for highly pathogenic avian influenza (HPAI) response in commercial and backyard poultry operations. The revised EIS explores the environmental impacts of three action alternatives during an outbreak. Comments are now due by Jan. 17. The interim final rule is pending publication in the Federal Register.
Cash cattle trade sharply higher... Cash cattle trade turned active Thursday afternoon with prices generally $2 to $4 higher than week-ago. That suggest the cash market could challenge the all-time high average price of $197.09 posted in early July.
More pressure on cash hog fundamentals... The CME lean hog index is down another 28 cents to $83.99 as of Dec. 31, the fourth straight daily decline, though 66 cents above the December low. The pork cutout fell 98 cents to $89.32 on Thursday, 68 cents above its low last month.
Overnight demand news... Taiwan tendered to buy 114,650 MT of U.S. milling wheat.
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
- 2:00 p.m. Peanut Prices — NASS