Good morning!
Quiet overnight grain trade... Corn, soybeans and wheat traded on both sides of unchanged while holding in relatively tight ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading steady to fractionally lower, soybeans are mostly a penny higher and wheat futures are 2 to 3 cents lower. The U.S. dollar index is more than 700 points higher and front-month crude oil futures are 50 cents higher this morning.
Trump mulls national economic emergency declaration for tariffs... President-elect Donald Trump is considering declaring a national economic emergency to provide legal ground for universal tariffs, CNN reports, citing people familiar with the matter. The declaration would allow Trump to set up a new tariff program by using the International Economic Emergency Powers Act.
Trump continues talk about foreign takeovers... Trump refused to rule out using military force to acquire Greenland and the Panama Canal, citing their importance to American economic and national security. Trump has long expressed interest in purchasing Greenland, a Danish territory, describing it as “absolutely necessary” for U.S. security. He also raised concerns over the Panama Canal, claiming its current operation by Chinese interests undermines American control of a critical trade route. He also said the Gulf of Mexico should be renamed the “Gulf of America,” reflective of the U.S. role in the region. Renaming an international body of water, however, would require consensus among bordering nations, including Mexico and Cuba, making unilateral action by the U.S. improbable. But the proposal underscores Trump’s push for assertive rebranding of U.S. influence in the region. Trump also amplified his controversial remarks about integrating Canada into the United States, suggesting the use of “economic force.”
Trump targets wind power in second term plans... Trump announced plans to block the construction of wind farms during his second term, potentially jeopardizing billions of dollars in renewable energy projects. Trump criticized wind power as costly, environmentally harmful and unpopular, specifically referencing a 200-turbine project off New Jersey’s coast. Trump’s proposed executive actions could impact major developers such as EDF Renewables, Shell PLC, Orsted AS and others, intensifying challenges already faced by the U.S. wind industry amid rising costs and supply chain disruptions.
Grassley criticizes EPA’s UCO import verification process... Sen. Chuck Grassley (R-Iowa) intensified his criticism of EPA over its method for verifying used cooking oil (UCO) imports. With a record 3.2 billion pounds of UCO imported through August 2024 — enough to displace 270 million bu. of soybeans — concerns are mounting about the impact on American farmers, the renewable fuel industry, and broader trade and environmental issues. Grassley criticized EPA for relying heavily on foreign records to verify compliance with the Renewable Fuel Standard (RFS), calling the approach inadequate. There are fears that imported UCO may be fraudulently blended with virgin vegetable oils, such as palm oil, undermining U.S. tax incentives. Grassley and other senators are demanding a more robust and transparent verification process to ensure the integrity of the RFS and safeguard American interests.
India considers lifting trading ban on some ag futures... India is considering revoking a three-year ban on futures trading in seven farm commodities after studies found the steps were counterproductive, a person with knowledge of the matter told Bloomberg. A government panel recommended ending the suspension, after the findings showed that restrictions imposed in 2021 to tame costs had instead disrupted market-price discovery, the person said. A study commissioned by the Securities and Exchange Board of India (SEBI) concluded that the ban on agricultural commodities, including wheat, unprocessed rice, chickpeas, rapeseed, soybeans, green gram and crude palm oil, harmed both futures and spot markets, and prices continued to rise, the person said. The report also highlighted that the trade suspension led to greater trust deficit in the derivatives market, making it more difficult to attract investors. A final decision will be made by a group of ministers, which will then ask the SEBI to lift the curbs or extend them beyond the existing Jan. 31 deadline.
China boosts support for yuan as it nears policy red line... China stepped up its support for the yuan as the managed currency weakened toward a policy no-go area — the edge of its allowed trading range against the dollar. China’s central bank set the daily reference rate that was stronger than analyst estimates by the most since April on Wednesday, with the currency approaching a record low offshore this week. State-owned banks continued to scale back their yuan lending in Hong Kong, making it costlier for investors to build short positions, traders told Bloomberg. In the onshore market, state banks sold the dollar against the yuan at levels close to 7.3320. The moves suggest China is not yet ready to let go of its tight grip on the currency, despite pressure from a wide interest-rate discount to the U.S., looming tariff threats and a sluggish local economy. Beijing fears disorderly capital outflows that can result in a panic selloff of yuan-denominated assets and derail an already lackluster recovery.
China expands consumer trade-in scheme to revive economic growth... China added more home appliances to the list of products that can be used in its consumer trade-in scheme and will offer subsidies for additional digital goods this year, in an effort to revive sluggish demand. Microwave ovens, water purifiers, dishwashers and rice cookers will be included in the trade-in scheme for home appliances this year, according to a document issued by the top state planner and the finance ministry. Cellphones, tablet computers, smart watches and bracelets under 6,000 yuan could get 15% subsidies. Beijing has so far allocated 81 billion yuan ($11.05 billion) for consumer goods trade-ins to support consumption in 2025.
Euro zone economic sentiment plunges in December... Euro zone economic fell sharply to 93.7 in December, the lowest level since November 2020. Confidence worsened among industrials, retailers, constructors and consumers but improved among service providers. Among the largest EU economies, economic sentiment declined markedly in France, Germany and Italy, while it improved in Spain. Consumer confidence in the euro zone fell by 0.7 point from the previous month to -14.5 in December, marking the second consecutive month of deterioration and the lowest reading since April.
USDA expands livestock import restrictions amid NWS threat as Mexican border reopening nears... As we reported in “Evening Report” on Tuesday, sources told us the U.S. is expected to reopen the border to Mexican cattle imports the week of Jan. 20. Meanwhile, USDA intensified its livestock import restrictions due to the growing presence of New World Screwworm (NWS) in Central America. Following a confirmed case in Belize on Dec. 26, 2024, USDA’s Animal and Plant Health Inspection Service (APHIS) suspended livestock imports from the country. Exceptions include dogs with health certificates and horses meeting strict treatment and quarantine conditions. This marks the latest measure in a broader regional response to the resurgence of NWS, which has affected several Central American nations since 2023, including Panama, Costa Rica, Nicaragua, Honduras, Guatemala and Mexico.
Beef movement stays strong... Wholesale beef prices fell $1.31 for Choice to $325.79 and rose $2.10 for Select to $305.43 on Tuesday. Movement totaled 156 loads, signaling strong retailer demand. Packers have slowed slaughter runs in an attempt to improve margins, but persistent retailer demand could keep them from further slowing operations.
Cash hog slide continues... The CME lean hog index is down another 42 cents to $81.59 as of Jan. 6, extending the recent slide to seven consecutive days during which prices have fallen $3.51. February lean hog futures finished Tuesday $2.415 below today’s cash quote.
Overnight demand news... South Korea purchased 140,000 MT of corn to be sourced from the U.S., South America or South Africa and 65,000 MT of optional origin feed wheat excluding Argentina, Russia, Pakistan, Denmark and China. Jordan tendered to buy up to 120,000 MT of optional origin 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Weekly Weather: State Stories — NASS
- 2:00 p.m. Broiler Hatchery — NASS