Good morning!
Grains mostly firmer overnight... Soybeans and soymeal led price gains overnight after high-range closes on Tuesday. Wheat followed to the upside, while corn chopped around unchanged. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are mostly 4 to 5 cents higher, winter wheat markets are 1 to 3 cents higher and spring wheat is mostly 3 to 4 cents higher. Front-month crude oil futures are modestly weaker, while the U.S. dollar index is more than 150 points higher.
House passes two-tier stopgap spending measure... The House passed a stopgap funding bill by a vote of 336-95, with 127 Republicans and 209 Democrats voting to send the bill to the Senate, exceeding a two-thirds threshold required under a special procedure (suspension of the rules) employed by House Speaker Mike Johnson (R-La.) to sidestep internal GOP disagreements. The legislation sets up two funding deadlines: Agriculture, Energy and Water, MilCon-VA and Transportation-HUD – until Jan 19. The rest of the federal government, including the Pentagon, will be funded until Feb. 2. The measure includes an extension of the 2018 Farm Bill through September 2024, and funds 21 “orphan” programs via offsetting funding from biorefinery programs. What the stopgap bill does not include: Military aid to Israel, Ukraine or Taiwan, nor border funding or changes in border policy. The two-step continuing resolution is expected to clear the Senate. Bottom line: Congress just moved the deadline to January or February when the real shutdown drama could go down. So, again, Congress is dragging this process on for months. Click here for more details.
Biden, Xi meet in San Francisco today... President Joe Biden told reporters yesterday he would define success from his meeting with Chinese leader Xi Jinping as getting “back on a normal course of corresponding: being able to pick up the phone and talk to one another when there’s a crisis, being able to make sure our militaries still have contact with one another.” Biden will meet with Xi at 1:00 p.m. CT. On the agenda: Trade restrictions, policing fentanyl and re-establishing communication between militaries. There’s already been a breakthrough: The world’s two largest greenhouse gas emitters agreed to restart climate talks and speed a transition away from fossil fuels.
NOPA October crush expected to be the highest ever... Analysts polled by Reuters expect the National Oilseed Processors Association (NOPA) to report soybean crush at 187.2 million bushels. If realized, that would be up 13.2% from September, 1.5% higher than October 2022 and the largest figure on record for any month. Soyoil stocks are expected to rise to 1.188 billion pounds.
Repairs temporarily restrict Ukrainian grain deliveries via rail to Odesa... Ukraine’s state railways said has restricted grain deliveries to Odesa, one of the country’s key Black Sea ports, due to repairs. It did not say when the repairs are expected to be completed and the restrictions lifted.
France raises non-EU wheat export forecast... France’s ag ministry now expects the country to export 10.1 MMT of wheat outside the EU in 2023-24, up 300,000 MT from its previous forecast. The ministry lowered its wheat export forecast within the bloc by 540,000 MT to 6.79 MMT.
India signs rice export deals... India has signed contracts to export about 500,000 MT of new-crop basmati rice, the president of the Indian Rice Exporters Federation told Reuters. After imposing a ban on non-basmati white rice exports in June to stabilize domestic prices, India set a floor price, or minimum export price (MEP), of $1,200 per metric ton for overseas sales of basmati in August. However, as the floor price hampered exports of the premium variety and saddled farmers with large stocks of new-crop rice, the government last month cut the floor price for basmati exports to $950 per ton.
Thailand raises rice export forecast... Thailand increased its rice export forecast for 2023-24 to 8.5 MMT, the head of the Thai Rice Exporters Association, told Reuters, as rice prices from competitors like Vietnam increase. The country previously expected rice exports to reach 8 MMT this year.
China boosts liquidity, keeps rates unchanged... The People’s Bank of China launched a total of 1.45 trillion yuan ($200 billion) via a one-year medium-term lending facility (MLF) to the banking system and left the interest rate unchanged at 2.50% on Wednesday. With 850 billion yuan of MLF loans set to expire this month, the operation resulted in a net 600 billion yuan ($82.82 billion) of fresh fund injection into the banking system, the biggest medium-term liquidity injection since 2016.
China’s industrial production and retail sales rise, fixed asset investment slips... China’s industrial production expanded 4.6% from year-ago in October, the fastest pace of output growth since April, mainly supported by mining and manufacturing. China’s retail sales rose 7.6% annually in October, the 10th straight monthly increase and the fastest growth since May. China’s fixed asset investment increased 2.9% to 41.94 trillion yuan in the first 10 months of 2023, the eighth straight decline.
UK consumer inflation slows sharply... British annual consumer price inflation plunged to 4.6% from 6.7% in September, the lowest in two years. With Britain’s economy stagnant, the inflation figures reinforced expectations the Bank of England’s rate-hiking cycle has ended.
Japan’s economy contracted in Q3... The Japanese economy contracted 2.1% on an annualized basis during the third quarter, down sharply from downwardly revised 4.5% growth in the second quarter, a preliminary reading showed. This was the first annual contraction in economic activity since the fourth quarter of last year.
Wholesale beef still looking for a low... Wholesale beef prices fell on Tuesday, with Choice down $2.18 to $295.67 and Select $1.36 lower to $267.88. Both are trading below previous “value” levels of $300.00 and $275.00, respectively, suggesting retailers are struggling to find consistent retailer demand. Retailers are currently more selective buyers than value seekers.
Cash hog index hints it may be stabilizing... The CME lean hog index is up 8 cents to $76.13 as of Nov. 13. While the index posted a new low for the move the previous day, it has now firmed four of the past six days, suggesting it is stabilizing. After a $1.05 drop on Tuesday, December hog futures widened their discount to $3.83.
Overnight demand news... Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Iran passed on a tender to buy 180,000 MT of corn and 120,000 MT of soymeal.
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
- 8:00 a.m. Food Dollar Series — ERS
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Monthly Soybean Crush — NOPA
- 11:00 a.m. Feed Grains: Yearbook Tables — ERS
- 2:00 p.m. Cost-of-Production Forecast — ERS
- 2:00 p.m. Rural America At A Glance: 2023 Edition — ERS
- 2:00 p.m. Broiler Hatchery — NASS