Good morning!
Grains mildly weaker overnight... Corn futures were unable to generate followthrough buying overnight after Thursday’s gains, while the soybean and wheat markets extended yesterday’s declines. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are mostly 3 cents lower and wheat futures are 2 to 5 cents lower. Front-month crude oil futures are around $1.00 higher and the U.S. dollar index is nearly 200 points lower.
Biden signs stopgap spending bill, contentious issues remain unresolved... President Biden signed a temporary spending bill just one day before a potential government shutdown, postponing a budget dispute with congressional Republicans into the new year. The bill received strong bipartisan support in both the House and Senate, ensuring that the government will remain funded until after the holiday season. The temporary spending package maintains government funding at current levels for approximately two more months while negotiations continue on a long-term spending package for the current fiscal year that began Oct. 1. It establishes two separate deadlines for passing full-year appropriations bills: Jan. 19 for some federal agencies including Agriculture and Feb. 2 for others. This creates two potential dates for a partial government shutdown. The spending bill does not include the White House’s nearly $106 billion request for wartime aid to Israel and Ukraine, nor does it provide humanitarian funding for Palestinians and other supplemental requests, including funding for border security. Lawmakers are expected to focus on these requests after the Thanksgiving holiday to reach a negotiated agreement.
Biden, AMLO meeting today... President Biden will meet with Mexican President Andrés Manuel López Obrador (AMLO). López Obrador is prioritizing key issues for his country, such as enhancing regional cooperation to combat corruption and promoting trade. However, both leaders must also tackle significant challenges in their countries’ relationship, including surges in migration at the border and the flow of drugs like fentanyl. López Obrador has voiced his belief the world has taken the wrong approach by primarily focusing on deterring migration and militarizing borders instead of addressing the underlying causes that compel people to leave their homes. In October, he emphasized that people do not leave their towns willingly but out of necessity.
China raises concerns with U.S. export controls, sanctions and tariffs... China Commerce Minister Wang Wentao expressed concern over U.S. curbs on semiconductor exports to China, as well as sanctions on Chinese firms and tariffs on Chinese imports, when he met U.S. Commerce Secretary Gina Raimondo on Thursday. He said, “It is very important the two sides discuss the boundary between national security concerns and trade and economic cooperation.” Wang and Raimondo agreed to hold the first meeting of a commerce working group at the vice minister level in the first quarter of 2024.
China’s nitrogen fertilizer association urges halting of nitrogen exports... The China Nitrogen Fertilizer Industry Association urged member companies to prioritize supplies for domestic use and withdraw applications for export that have yet to be approved after urea prices hit a two-year high. It also called for members to cap fertilizer prices at levels no higher than Nov. 16 values, run production at full capacity and withdraw supplies that are stored at ports. No new export applications are likely to be approved for the rest of this calendar year. Meanwhile, China’s fertilizer output increased 13.6% from year-ago to 5.07 MMT during October.
China to auction corn reserves... China will auction 222,356 MT of imported corn from the U.S. States out of its state reserve stockpiles on Nov. 21. Sinograin did not indicate if this is a one-off sale or there will be more sales of state-owned reserves.
China FDI down sharply so far this year... Foreign direct investment (FDI) fell 9.4% from year-ago to 987.01 billion yuan ($136.40 billion) through the first 10 months of this year. FDI in the services sector decreased 15.9%, while in the manufacturing sector it increased 1.9%.
Euro zone inflation falls to 15-month low... Consumer inflation in the euro zone eased to 2.9% above year-ago in October, the lowest figure since July 2021 and in line with the preliminary data. Core inflation, which strips out energy and food prices, dropped to a 4.2% annual gain, the lowest level since July 2022.
Vilsack: Use CCC to boost farm bill funding... USDA Secretary Vilsack has a simple answer to finding more farm bill funding: Use the CCC Charter Act’s $30 billion borrowing authority that is always replenished when it gets to a certain level. That may be the thought inside Congress, but lawmakers and staff are not confirming anything for fear something or someone could zap the possibility.
PARP update... A USDA official denied reports that because USDA still does not have enough money for Pandemic Assistance Revenue Program (PARP), it may be the first quarter of 2024 before there is a payment. “We are scrubbing for money from other areas, but there is no known intent to hold this payment off until first quarter of the calendar year. That has not been discussed.”
Placements key in Cattle on Feed Report... Analysts polled by Reuters expect USDA’s Cattle on Feed Report this afternoon to show the Nov. 1 feedlot inventory up 1.8% from year-ago at 11.907 million head. The key figure will be placements after that category greatly exceeded expectations and topped year-ago by 6.1% in last month’s report. Analysts expect the number of cattle that moved into feedlots last month to have topped year-ago by 4.9%, while marketings are seen down 2.1%.
Cattle futures plunge, cash prices follow... Live cattle futures faced heavy selling pressure on Thursday. That caused feedlots to start moving cattle at lower prices, with initial trade down $2.00 to $3.00 in the Southern Plains. While some feedlots may wait until after the Cattle on Feed Report to sell cattle, yesterday’s activity suggests cash cattle prices will be solidly lower for the week.
Cash hog index makes new seasonal low... The CME lean hog index is down 38 cents to $75.68 (as of Nov. 15), marking a new low this fall. December lean hog futures firmed 42.5 cents on Thursday, cutting the discount in the lead contract to $4.205.
Overnight demand news... South Korea purchased 68,000 MT of corn and 115,000 MT of feed wheat – both optional origin, excluding 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
- 8:00 a.m. Food Expenditure Series — ERS
- 2:00 p.m. Cattle on Feed — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Turkey Hatchery — NASS
- 2:30 p.m. Commitments of Traders — CFTC