Good morning!
Varied tone in grains overnight... Wheat futures firmed, soybeans weakened and corn chopped around unchanged during the overnight session. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny lower, soybeans are 5 to 7 cents lower and wheat futures are 2 to 4 cents higher. The U.S. dollar index and front-month crude oil futures are both modestly firmer this morning.
Central U.S. to receive rains, snow... Rains are expected today across the central U.S., though Colorado, southwestern Nebraska and far western Kansas will not be included in this storm, according to World Weather Inc. Waves of snow may also impact the upper Midwest during the latter part of this week through next week, although confidence is low. Central Argentina was missed by weekend rain as expected and will remain dry for the next week. Sao Paulo and northern Parana, Brazil are also unlikely to see much rain over the next week to 10 days. Other areas of the two countries should see some rainfall.
Brazil’s soybean planting now well ahead of last year... Brazil’s soybean planting advanced to 80% of intended area as of last Thursday, according to AgRural, well ahead of 68% on that date last year. AgRural noted, “Crops are developing well throughout the country, but the reduction in rainfall in the South and in part of Mato Grosso do Sul has producers on alert, although it is too early to talk about losses.” Corn planting reached 86% done. AgRural said, “In the South, where planting is complete and there has been less rain, producers are closely monitoring the forecast maps, especially in areas where crops are already in the reproductive phase.”
Trump to focus this week on economic positions... President-elect Donald Trump continues to swiftly name his Cabinet and leadership roles. The biggest one this week is who will lead Treasury, with that position down to a few people. Other positions could include the U.S. Trade Representative and USDA secretary. Over the weekend we reported that a late name was added to the USDA possibility list: Jimmy Emmons, currently senior vice president of climate-smart programs at Trust In Food, Farm Journal’s sustainable agriculture division.
Stabenow to finally release text of Senate farm bill... Congressional sources tell us Senate Ag Chair Debbie Stabenow (D-Mich.) has finally decided to release the official text of her farm bill, apparently reacting to pressure from many sides of the issue, including from members of her own party. Contacts say that to date, Stabenow has only briefed Democrats about the legislative language. Not even Senate Ag Ranking Member John Boozman (R-Ark.) has been informed at this time, sources advise. But that is expected to change and Boozman is expected to release a statement about the matter, contacts advise. Comments: While it was previously considered good news about a potential farm bill yet this calendar year if Stabenow released official text and a bill, contacts say the way she briefed Democrats, at least initially, and the length of time to get actual language, does not mean those odds have improved.
The week ahead in Washington... Fiscal year (FY) 2025 spending, disaster aid, a new farm bill, a separate ag financial aid measure and conjecture over the fate of President-elect Donald Trump’s nominees so far are key focal points during the lame-duck session of Congress. House Speaker Mike Johnson (R-La.) signaled he prefers to fund the government on a short-term basis. Sen. Ted Budd (R-N.C.) is leading a bipartisan effort urging the Office of Management and Budget (OMB) to swiftly send Congress a supplemental funding request for states hit by Hurricanes Helene and Milton. The disaster aid package may include payments to growers who saw their income drop sharply this year because of declines in commodity prices. Of note: The push is on to link any ag financial aid to permanently increase the funding baseline for farm bill commodity programs. A hearing on disaster aid will take place Wednesday before the Senate Appropriations Committee who will hear form Deputy USDA Secretary Xochitl Torres. The economic calendar is fairly light. Flash PMI readings on manufacturing and the services sector will grab attention on Friday. There are also several Federal Reserve officials that will be giving speeches. Key agricultural data will be Friday afternoon’s Cattle on Feed Report.
Biden approves long-range missiles for Ukraine after Russian escalation... After nearly 1,000 days of war, President Joe Biden is allowing Ukraine to use U.S. long-range ATACMS missiles to strike military targets inside Russia. This decision follows a brutal Russian missile assault on Ukraine’s energy infrastructure and the arrival of 10,000 North Korean troops in Russia (perhaps many more), reportedly to push Ukrainian forces out of Russia’s Kursk region. The White House aims to bolster Ukraine’s position before Biden’s term ends, while Trump indicates a desire to end the conflict, though specifics remain uncertain.
Timing of coming tariffs is key... It may take longer than expected for Trump to invoke tariffs on some countries if implementation is done via a budget reconciliation measure. If so, funds received from tariffs would be used to offset extension of some 2017 tax cuts. If tariffs are announced via executive order, the Congressional Budget Office is unlikely to count the tariffs funds as an offset, sources advise.
USDA could announce aid for specialty crops today... USDA will announce $2 billion to $3 billion in aid to specialty crop producers modeled on the CFAP 2 program. The funds will reportedly come from USDA’s Commodity Credit Corporation (CCC).
Banks downgrade China outlook... Morgan Stanley downgraded China to slight “underweight” from “equal weight” in emerging markets, with analysts noting efforts to revive the economy and a Republican sweep of Congress and the White House could significantly impact markets. “We expect even stronger headwinds on corporate earnings and market valuation in the coming months,” Morgan Stanley analysts said in a note dated Nov. 17. Goldman Sachs is more bullish on mainland stocks, but trimmed its recommendation on Hong Kong shares to “underweight” from “market weight.” “Although valuations are not demanding, Hong Kong does not offer much economic or earnings growth,” Goldman analysts said in an Asia-Pacific portfolio strategy note published on Sunday. “The property and retail sectors remain under pressure and the economy may not benefit as much from policy support in China as it previously has, given China’s focus on bolstering the domestic economy.” Both banks expect the yuan to weaken, with Goldman forecasting a dollar/yuan exchange rate of 7.5 at the end of next year and Morgan Stanley 7.6.
China to front-load 2025 local government special bonds quota... China’s finance ministry is planning to front-load part of the 2025 local government special bonds quota to meet funding needs for major infrastructure projects, state-backed The Securities Times reported. “At present, the Ministry of Finance is formulating an advance work plan to better ensure the funding needs of major projects in key areas and to leverage the important role of government bond funds in the economic recovery,” it said, without giving specifics. By the end of October, local governments had issued 3.9 trillion yuan ($539 billion) in new special bonds, almost completing debt issuance under the 2024 quota, the report added.
China’s pork imports continue to decline... China imported 90,000 MT of pork in October, down 10% from September and 1.6% less than last year. Through the first 10 months of the year, China imported 890,000 MT of pork, down 34.9% from the same period last year.
Oregon confirms first human case of H5N1... The U.S. Centers for Disease Control and Prevention (CDC) on Friday confirmed H5N1 in a person in Oregon. The infected person is linked to a previously reported outbreak tied to a commercial poultry operation in the state, where the virus has been confirmed in 150,000 birds, the state health authority said.
Wholesale beef prices continue to slide... Wholesale beef prices softened 46 cents for Choice to $303.34 and 52 cents for Select to $276.14 on Friday. Falling wholesale prices have pushed packer margins deep into the red.
Cash hog index extends decline, pork cutout rebounds... The CME lean hog index is down 51 cents to $89.27 as of Nov. 14, the fifth decline in the last six days. The pork cutout firmed $3.04 to $97.11 on Friday, driven largely by $18.44 jump in primal bellies though butts, picnics and ribs also posted strong gains.
Weekend demand news... Algeria tendered to buy a nominal 50,000 MT of durum wheat from unspecified origins.
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
· 10:00 a.m. Weekly Export Inspections — AMS
· 3:00 p.m. Crop Progress — NASS