Good morning!
Grains mostly weaker overnight... Soybeans and wheat faced followthrough selling overnight, while corn futures pivoted around unchanged in quiet trade. As of 6:30 a.m. CT, corn futures are trading fractionally on either side of unchanged, soybeans are 5 to 7 cents lower and wheat is unchanged to 2 cents lower. The U.S. dollar index and front-month crude oil futures are bothmodestly firmer.
National Day of Mourning for President Carter... Government offices and the U.S. stock exchanges are closed today for a National Day of Mourning for President Jimmy Carter’s funeral. Grain and livestock markets will close at 12:15 p.m. CT. The bond market closes at 1:00 p.m. CT. Due to the government closure, weekly export sales data for the week ended Jan. 2 will be published on Friday.
Tentative agreement reached in East Coast, Gulf port labor talks... The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) announced a tentative agreement on a new six-year master contract for port workers along the East Coast and Gulf. The deal, reached verbally on Wednesday, must still be ratified by employers and the tens of thousands of members of the International Longshoremen’s Association. The agreement, finalized ahead of the Jan. 15 deadline, averts a potential strike that could have disrupted major U.S. ports and rattled the economy.
Panama Canal CEO denounces Trump’s demands as ‘chaotic’... Panama Canal Authority CEO Ricaurte Vásquez Morales, in remarks to the Wall Street Journal, refuted President-elect Donald Trump’s assertions that China controls the canal and dismissed calls for preferential treatment for U.S. ships. Vásquez Morales emphasized that such demands would violate international law and the canal’s neutrality treaty. Panama’s Foreign Minister Javier Martinez-Acha also rejected Trump’s idea of reclaiming the canal, asserting its sovereignty is “not negotiable.” While Chinese companies manage nearby ports, the canal remains under full Panamanian control. Vásquez Morales clarified that canal tolls, which average $750,000 per crossing, are determined by ship size and type, with no discriminatory practices.
China accelerates efforts to boost crop yields, food security... China will accelerate the breeding of new soybean and corn varieties and prioritize yield improvements for key grains and oil crops, as part of broad efforts to ensure food security, the agriculture ministry said. focus will be on five key crops - corn, rice, wheat, soybeans and rapeseed - and the better use and coordination of good land, high quality seeds, machinery and farming practices. The ministry aims to increase grain production by 50 MMT by 2030, which would be a 7% increase over the 2024 record. The ag ministry also called for coordinated funding to support the efforts to boost yields and help reduce China’s reliance on imports to ensure food security.
China’s deflationary concerns persist... China’s consumer prices eased to 0.1% above year-ago in December, the smallest increase since March. Food prices declined 0.5%, dropping from a 1.0% rise the previous month and marking the first drop in five months. Pork prices moderated to a 12.5% annual gain from 13.7% in November. Non-food prices rose 0.2% after previously showing no change. The full-year consumer price index rose 0.2%, well below the official target of around 3%. China’s producer price index fell 2.3% from year-ago in December, the 27th straight month of producer deflation. For all of 2024, factory-gate prices contracted 2.2%.
China paves way for possible EU retaliation... China said the European Union’s measures to shield its companies from foreign subsidies are a barrier to trade and investment, marking the latest clash in the ongoing trade dispute between the two sides. China’s commerce ministry released the findings of its investigation into the EU’s Foreign Subsidies Regulation on Thursday, highlighting “selective implementation” as a major concern. The inquiry started in July 2024 after the EU started examining Chinese subsidies for electric vehicles. Beijing did not specify any actions it plans to take following the investigation results, though it may ask the EU for consultations.
China continues to ramp up yuan support... China expanded its support for the weakening yuan with a plan to issue a record amount of bills in the Hong Kong market to mop up excess liquidity. The People’s Bank of China will auction a record 60 billion yuan ($8.2 billion) of six-month bills in the city on Jan. 15, the Hong Kong Monetary Authority said. The issuance will effectively increase demand for the yuan in offshore markets, making it more costly to borrow and short the currency.
Indonesia curbs exports of UCO, palm residue... Indonesia said its exports of used cooking oil (UCO) and palm oil residue in recent years had exceeded production capacity, indicating crude palm oil (CPO) had been mixed in, prompting it to issue regulation curbing shipments. The new regulation, which takes effect immediately, requires all exporters of palm oil residue and UCO, including palm oil mill effluent (POME), to acquire an export allocation from the government. The government aims to help attain the B40 mandate requiring a 40% mix of palm oil-based diesel fuel.
Idemitsu to begin trial of non-edible oilseed crop for SAF... Japanese oil refiner Idemitsu Kosan will begin a trial plantation of the non-edible oilseed tree crop Pongamia in Australia from mid-January to assess its potential as a feedstock for sustainable aviation fuel (SAF). Pongamia, a leguminous plant in Southeast Asia and Oceania, is a highly efficient non-edible oilseed crop that does not compete with food production, according to Idemitsu. Through the trial plantation, Idemitsu will evaluate long-term cultivation methods for Pongamia and how to optimize the supply chain from cultivation to SAF production. Idemitsu will also explore additional uses for Pongamia, including creating carbon credits through afforestation, producing biomass power pellets from Pongamia shells and using pressed oilseed cake as livestock feed. The plantation will be conducted in collaboration with Terviva.
Lawler reintroduces bill to raise SALT deduction cap... Representative Mike Lawler (R-N.Y.) seeks to raise the state and local tax (SALT) deduction cap to $100,000 for single filers and $200,000 for joint filers. Lawler has consistently pushed for SALT deduction reform, highlighting its importance to constituents in high-tax states like New York. Proponents argue the change would aid middle-class families, while critics claim it benefits high-income earners disproportionately. Fully repealing the cap could result in a $1.2 trillion revenue loss over a decade. Lawler’s proposal is one of several under discussion as the 2025 deadline looms. Its success will depend on negotiations within Congress and the incoming Trump administration, marking it as a key issue in upcoming tax reform debates.
USDA expands H5N1 dairy testing... USDA’s Animal and Plant Health Inspection Service announced 15 additional states have joined the National Milk Testing Strategy (NMTS), bringing the total to 28 states, covering nearly 65% of U.S. milk production. New states include Alabama, Arizona, Delaware, Iowa, Georgia, Kansas, Minnesota, New Jersey, New Mexico, Nevada, Oklahoma, Rhode Island, Tennessee, Utah and Virginia. Currently, 11 states are in Stage 2 of the NMTS, operating state-level bulk tank sampling programs, while California is in Stage 3 with rapid response measures for affected areas. Over 110,000 samples have been tested by USDA laboratories, including milk from multiple herds and samples from wild and domestic animals, underscoring the breadth of surveillance efforts.
Wholesale beef market remains strong... Wholesale beef prices firmed $2.82 to $328.61 while Select rose $1.46 to $306.89 on Wednesday. Movement was strong at 181 loads, including 120.55 loads of Choice cuts, signaling strong retailer demand despite high prices.
Pork cutout rebounds, movement stays strong... The pork cutout rose $2.13 on Wednesday to $90.53 as all cuts except ribs firmed. That was the second straight daily gain after the cutout fell to a new seasonal low on Monday. Movement topped 400 loads for a third consecutive day. The CME lean hog index continues to fall seasonally, dropping another 54 cents to $81.05 as of Jan. 7.
Overnight demand news... Taiwan purchased 114,650 MT of U.S. milling wheat. South Korea purchased 65,000 MT of corn expected to be sourced from the U.S. or South America.
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
· No reports due to a National Day of Mourning for President Carter’s funeral.