Good morning!
Soybeans lead overnight price gains... Soybeans extended corrective gains from the two previous days during overnight trade while corn and wheat also firmed. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are 6 to 7 cents higher, winter wheat markets are 3 to 5 cents higher and spring wheat is mostly a penny higher. The U.S. dollar index is around 140 points higher and front-month crude oil futures are $1.30 higher.
Record September soybean crush expected... Analysts expect USDA to report September soybean crush totaled a record 187.6 million bu., which would be up 20.1 million bu. (12%) from August and 12.8 million bu. (7.3%) from year-ago. Corn-for-ethanol use is expected to be 447.8 million bu., which would be down 24.9 million bu. (5.3%) from August but up 19.4 million bu. (4.5%) from last year.
Sharp slowdown expected in October jobs growth... Economists polled by Reuters expect October non-farm payrolls growth to fall to 113,000, which would be the lowest since January 2021. The unemployment rate is expected to hold at 4.1%. The report’s reliability is impacted by recent hurricanes and labor union strikes, complicating the interpretation. Analysts say markets should be prepared for potential distortions, though weak data may still signal a labor market slowdown.
Ukraine’s October grain exports jump... Ukraine’s October grain exports rose 58.6% from last year to 3.95 MMT. That included 1.64 MMT of wheat, 1.92 MMT of corn and 376,000 MT of barley. In the first four months of 2024-25, Ukraine shipped 14.4 MMT of grain – including 7.7 MMT of wheat, 4.7 MMT of corn and 1.7 MMT of barley – up 5.2 MMT (56.5%) from the same period last year.
Canada, Mexico brace for potential USMCA renegotiation amid U.S. election... Both Kamala Harris and Donald Trump plan to renegotiate the U.S.-Mexico-Canada Agreement (USMCA), raising concerns for Canada and Mexico, whose economies are deeply intertwined with the U.S., the Wall Street Journal reports. Canada, which sends 80% of its exports to the U.S., is lobbying to preserve its $900 billion trade relationship, while Mexico eyes preserving its vehicle-manufacturing industry and addressing U.S. demands on Chinese imports.
Another sign of Chinese factory growth in October... The Caixin/S&P Global manufacturing purchasing managers index (PMI) rose to 50.3 in October from 49.3 the previous month, signaling expansion among smaller and export-oriented factories. Output grew at the fastest pace in four months, driven by a renewed rise in new orders and increased buying levels. However, export orders continued to fall, albeit at a slower rate. The Caixin/S&P Global manufacturing PMI data came a day after the official reading also showed expansion in China’s larger state-owned factories.
Signs of life in China’s property sector... China’s residential property sales rose in October, the first year-over-year increase of 2024, as the government’s latest stimulus blitz brought back buyers. The value of new-home sales from the 100 biggest real estate companies rose 7.1% from a year earlier to 435.5 billion yuan ($61.2 billion), reversing from a 37.7% slump in September, according to preliminary data from China Real Estate Information Corp. Sales surged 73% from a month earlier.
IMF warns of risks to Asia’s economy as trade tensions, soft China growth bite... Risks to Asia’s economy have increased from escalating trade tensions, China’s property sector woes and the potential for further market turbulence, the International Monetary Fund (IMF) said. “A longer and larger-than-expected slowdown in China would be harmful for both the region and the global economy,” IMF said in its regional economic outlook report for Asia. “China’s policy response is critical in this context,” it noted, calling on the need for steps to facilitate property sector adjustment and strengthen private consumption. In its latest forecast, IMF expects Asia’s economy to expand 4.6% in 2024 and 4.4% in 2025, both up 0.1 point from the prior outlook, though down from 5.0% growth in 2023.
Oregon identifies three human cases of H5N1 in farm workers from Washington... Three more people from Washington state were confirmed to have H5N1 after cleaning facilities at an infected chicken farm. Oregon identified the three new cases after the people traveled to the state from Washington while infected, the Oregon Health Authority said. They have since returned to Washington, where public health staff are monitoring them.
Wholesale beef prices pulling back... Wholesale beef prices dropped $1.84 for Choice to $317.60 and $3.95 for Select to $285.37 on Thursday, extending the price pullback from recent highs. Despite the wholesale price pressure, the cash cattle market has performed relatively well, with generally steady prices in the Southern Plains and steady/weaker in the northern market, where supplies are more plentiful.
Another surge in cash hog index... The contra-seasonal rise in the cash hog index is gaining steam, jumping another $1.15 to $87.93 as of Oct. 30, the highest since Aug. 22. That’s the 10th straight daily gain during which the index has surged $4.07. After Thursday’s corrective losses, the discount in December hogs stood at $4.13, while February hogs ended $2.73 below today’s cash quote. The pork cutout also remains strong, rising $1.54 on Thursday to $103.15, the highest since Aug. 5.
Overnight demand news... South Korea purchased 70,000 MT of corn expected to be sourced from South America or South Africa. Algeria purchased around 600,000 MT of optional origin milling wheat, with the bulk of the it expected to be sourced from the Black Sea region.
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
· 2:00 p.m. Cotton System Consumption and Stocks — NASS
· 2:00 p.m. Fats and Oils: Oilseed Crushings — NASS
· 2:00 p.m. Flour Milling Products — NASS
· 2:00 p.m. Grain Crushings and Co-Products Production — NASS
· 2:00 p.m. Peanut Prices — NASS
· 2:30 p.m. Commitments of Traders — CFTC