Good morning!
Corrective buying overnight... Corn, soybeans and wheat were supported by corrective buying overnight after heavy selling pressure earlier this week. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents higher, soybeans are 6 to 8 cents higher, SRW wheat is 5 to 6 cents higher, while HRW and HRS wheat are mostly 1 to 3 cents higher. Front-month crude oil futures are around 25 cents lower and the U.S. dollar index is about 500 points higher this morning.
Weekly Export Sales Report out this morning... For the week ended Dec. 29, traders expect:
| 2022-23 expectations (in MT) | Last week (in MT) |
Corn | 400,000-1,000,000 | 781,583 |
Wheat | 200,000-575,000 | 478,122 |
Soybeans | 400,000-1,200,000 | 705,813 |
Soymeal | 50,000-300,000 | 264,311 |
Soyoil | 0-12,000 | 5,423 |
December employment data out this morning... Economists polled by Reuters expect the Labor Department to report the U.S. economy added 200,000 non-farm payrolls in December. That would be down from 263,000 jobs added in November. The unemployment rate is expected to hold at 3.7%. Market participants will also closely monitor hourly earnings for labor market inflation.
Australia set for record wheat crop... Australian wheat production is expected to rise to a record 42 MMT as yields exceeded already-high expectations, traders and analysts told Reuters. In December, the Australian Bureau of Agricultural and Resource Economics (ABARES) estimated wheat production at 36.6 MMT. “We are getting monster yields,” Phin Ziebell, agribusiness economist at National Australia Bank, told Reuters. “Western Australia has performed very well.” However, the rainfall that drove stronger yields has likely resulting in a large portion of the Australian crop developing into average or below-average milling wheat.
FAO food price index continued to drop in December... The UN Food and Agriculture Organization (FAO) global food price index dropped for the nineth straight month and was 1.0% below year-ago. The decline in December was driven by a steep drop in the international prices of vegetable oils, along with smaller declines in cereal grains and meats. Compared to year-ago, prices were up 2.5% for meat, 7.8% for dairy, 4.8% for cereal grains and 0.7% for sugar, while vegoils dropped 19.1%.
Euro zone consumer inflation falls sharply in December... Euro zone inflation tumbled by more than expected last month but core price pressures rose. Consumer price growth in the 20-nation bloc slowed to 9.2% in December from 10.1% a month earlier. The biggest chunk of the decline came from lower energy prices while all key components of core inflation accelerated. Inflation excluding volatile food and energy prices rose 6.9%, up from 6.6% in November, while an even narrower measure that also excludes alcohol and tobacco prices rose to 5.2% from 5%.
China wants more oilseed acreage, will raise minimum wheat price in 2023... China will target an increase in its oilseed acreage in 2023 of at least 10 million mu, or 667,000 hectares, state-run Xinhua news reported, citing the agriculture minister. China will also raise the minimum purchase price for wheat this year, without citing the actual price.
China to resume wheat reserve auctions... China will auction 140,000 MT of wheat from its reserves on Jan. 11. This will be the first sales of Chinese wheat reserves since the end of November. The sale includes 100,000 MT bought in 2015, 2016 and 2017 under its minimum purchase price policy and 40,000 MT of 2014 and 2015 wheat from its temporary reserve.
China expects travel to double from year-ago during holiday season... China expects the total number of passenger trips made by road, rail, water and flight during the upcoming Lunar New Year to reach 2.1 billion this year, double last year’s 1.05 billion during the same period. Traffic officials said daily passenger flights scheduled during the 40 day holiday transportation season that starts Saturday is averaging about 11,000, about 73% of the pre-Covid level in 2019.
Cash cattle trade steady... Cash cattle started trading at $157 in the Southern Plains, about steady with week-ago, though some feedlots continued to hold out for higher prices. Trade has not yet started in the northern market as feedlots there passed on steady prices.
Cash hog index continues to fall... The CME lean hog index is down 80 cents to $78.26 (as of Jan. 4), marking a new low in the seasonal decline. February lean hog futures posted sharp losses on Thursday and finished $4.265 above today’s cash index quote. Traders will likely remain cautious toward front-month futures until the cash index shows solid signs of a seasonal low.
Overnight demand news... Taiwan tendered to buy 45,200 MT of U.S. milling wheat. Philippines passed on a tender to buy 110,000 MT of feed 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
- 10:00 a.m. Livestock and Meat International Trade Data — ERS
- 2:00 p.m. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC