Good morning!
Grains weaker overnight... Corn, soybeans and wheat faced followthrough selling to Wednesday’s losses during the overnight session. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 10 to 12 cents lower, SRW wheat is 6 to 7 cents lower, HRW wheat is 2 to 4 cents lower and HRS wheat is mostly 1 to 2 cents lower. Front-month crude oil futures are around 75 cents lower and the U.S. dollar index is about 100 points higher.
Weekly Export Sales Report out this morning... For the week ended Nov. 9, traders expect:
| 2023-24 expectations (in MT) | Last week (in MT) |
Corn | 900,000-1,550,000 | 1,015,320 |
Wheat | 250,000-500,000 | 354,298 |
Soybeans | 2,900,000-4,500,000 | 1,080,181 |
Soymeal | 50,000-500,000 | 193,480 |
Soyoil | 0-10,000 | 2,598 |
Biden, Xi try to stabilize shaky relations... President Joe Biden and Chinese President Xi Jinping met during the Asia-Pacific Economic Cooperation Summit to address various geopolitical, trade and economic issues. Both leaders recognized the need for cooperation to stabilize relations. Biden aimed to ease tensions with China without appearing weak on the issue. Xi sought foreign investment and export markets to counter China’s economic challenges, including a real-estate crash and excessive debt. Xi focused on improving business ties, meeting with U.S. business executives. Both leaders discussed avoiding severe measures that would weaken China’s economy, despite trade restrictions. Traders labeled the meeting as “disappointing,” noting no unexpected breakthroughs.
U.S. seeks ‘reciprocal, fair’ trade with China... The U.S. wants robust trade with China on a “reciprocal and fair” basis, and seeks to de-escalate tension with China, U.S. Commerce secretary Gina Raimondo said. Raimondo was speaking at a dinner event with U.S. corporate executives and China’s President Xi Jinping in attendance following his meeting with Biden in San Francisco. Chinese Foreign Minister Wang Yi told state media the two leaders had a “very good” meeting that was comprehensive and in-depth.
Senate clears stopgap spending measure... The Senate approved the continuing resolution with strong bipartisan support in an 87-11 vote, resolving some last-minute disputes. The House had previously passed the legislation on a 336-95 vote. The measure includes an extension of the 2018 Farm Bill through September 2024, and funds 21 “orphan” programs via offsetting funding from USDA’s Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program. Biden is expected to sign the measure into law. The next funding deadlines are Jan. 19 for some agencies including Agriculture and Feb. 2 for others, creating pressure for negotiations on fiscal year (FY) 2024 appropriations. However, the House and Senate have not yet agreed on a topline budget target, as House Republicans have rejected the spring debt limit suspension law.
Strategie Grains cuts EU wheat plantings forecast... Excessive rainfall during winter grain sowings in France and to a lesser extent Germany will lead to a decline in the European Union’s total soft wheat area for next year’s harvest, Strategie Grains said. “Growing area for 2024-crop soft wheat in the EU-27 is currently estimated 0.9% below the level of 2023, and furthermore, yields could fail to match their potential, as happened at the 2020 harvest, especially in France,” the consultancy said. Meanwhile, the firm raised its 2023 EU wheat crop estimate by 200,000 MT to 125.8 MMT.
China’s home prices fall again... China’s new home prices dropped 0.1% in October, marking the fourth consecutive month of annual declines, as demand remained sluggish despite efforts from Beijing to reverse a prolonged property slump. Once a key engine of economic growth accounting for around a quarter of China’s economic activity, a regulatory crackdown since 2020 to curb debt has tightened liquidity and raised default risks for developers, delaying many projects.
Iowa confirms another HPAI case... Iowa’s department of agriculture confirmed a positive case of highly pathogenic avian influenza (HPAI) in a backyard mixed species flock in Benton County. This is Iowa’s 12th outbreak of HPAI this fall, covering 10 counties.
Slow developing cash cattle market... Cash cattle negotiations remained at a standstill on Wednesday, with bids and asking prices far apart. Most cash sources don’t anticipate significant trade prior to Friday afternoon’s Cattle on Feed Report unless packers raise bids. While some packers inched up bids yesterday, they remained below week-ago levels.
Cash hog fundamentals weaken... The CME lean hog index is down 7 cents to $76.06 (as of Nov. 14). While the cash index hasn’t faced heavy pressure recently, it has struggled to move above the low-$76.00 range. The pork cutout value declined 78 cents on Wednesday due mostly to an $8.00 drop in primal belly prices.
Overnight demand news... Tunisia tendered to buy 25,000 MT of durum wheat from major western European countries, the U.S., Canada or Argentina.
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
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: November 2023 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: November 2023 — ERS