Good morning!
Grains mildly firmer overnight... Corn and wheat futures modestly built on Wednesday’s gains during overnight trade, while soybeans rebounded from losses. As of 6:30 a.m. CT, corn futures are trading unchanged to fractionally higher, while soybeans and wheat are 2 to 3 cents higher. Front-month crude oil futures are around $1.50 higher and the U.S. dollar index is modestly firmer.
Russia/Ukraine situation escalates... Russia launched an intercontinental ballistic missile (ICBM) targeting Dnipro is a dramatic and provocative move, likely in response to Ukraine’s reported first use of British-made Storm Shadow cruise missiles. These missiles, known for their precision and long range, represent a step-up in Ukraine’s military capabilities. President Joe Biden recently shifted policies, now permitting Ukraine to utilize long-range ATACMS missiles and providing anti-personnel landmines, further enhancing Ukraine’s tactical options.
Weekly Export Sales Report out this morning... For the week ended Nov. 14, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) |
Corn | 1,000,000-2,200,000 | 1,315,104 |
Wheat | 275,000-600,000 | 380,056 |
Soybeans | 1,000,000-1,600,000 | 1,555,425 |
Soymeal | 210,000-450,000 | 302,413 |
Soyoil | 5,000-25,000 | 16,469 |
Global flour millers face potential supply crunch... Wheat growers in several exporting countries are reluctant to sell their crops with prices near four-year lows, traders, farmers and millers told Reuters, leaving flour makers with dwindling supplies and vulnerable to any potential upswing in prices. Typically grain processors buy wheat three to four months in advance. But millers in Asia, including Indonesia, the world’s No. 2 wheat importer, are currently covered for about two months. In the Middle East, most grain processors only have up to 45 days of supplies. Along with lack of supply from farmers, high interest rates have deterred millers from stocking up on wheat, leaving them exposed if prices rise.
Argentina moves to deepen waterway to ship bigger cargoes... Argentina published the terms of a long-awaited tender for contractors to dredge its waterway that ships billions of dollars of crops a year to global markets. The international tender for a 30-year license includes a key provision to deepen the navigation channel in the Parana River, which will allow exporters to load bigger cargoes at the Rosario export hub. Dredgers have until the end of January to submit bids. Charterers and exporters have for years lobbied for a deeper channel as part of a broader push by Argentina’s grain industry to reverse a decline in competitiveness against Brazil and the United States.
Port of Los Angeles sees sustained import surge ahead of tariffs... The busiest U.S. maritime trade hub, the Port of Los Angeles, continued to move near-record levels of imports last month as businesses bring goods in ahead of potential tariff increases and seek to avoid labor-related disruptions at alternate ports. The Port of Los Angeles handled 905,000 container units in October, a 25% gain over last year and is the first time the port handled more than 900,000 containers for four months in a row. The port processed more cargoes between July and October than it did during the peak year in 2021. The neighboring Port of Long Beach moved nearly 1 million import, export and empty containers in October, beating a record set just two months ago. The Los Angeles and Long Beach ports, which together account for roughly one-third of all U.S. container imports, have seen their busiest ever peak season, which began earlier — and has lasted longer — than is typical.
Push to revoke China’s Most Favored Nation status gains momentum... Efforts to strip China of its Most Favored Nation/Permanent Normal Trade Relations (PNTR) trade status are intensifying, with new legislation introduced by Rep. John Moolenaar (R-Mich.) and a companion Senate bill backed by GOP Sens. Marco Rubio (Fla.), Josh Hawley (Mo.) and Tom Cotton (Ark.). The move, aimed at enabling steep tariffs, reflects growing bipartisan frustration with China’s trade practices and a shift toward economic decoupling. While proponents argue it will bolster U.S. manufacturing and counter China’s influence, critics warn of retaliatory tariffs, higher costs for U.S. consumers and damage to global trade norms. The legislation, influenced by President-elect Donald Trump’s trade policies, could signal the end of an era for U.S./China trade relations and a potential rift with the World Trade Organization. Of note: PNTR’s demise would also end selective sanctions on Chinese imports — including the 301 tariffs imposed by the first Trump administration and extended by President Joe Biden — to prod Beijing to curtail unfair trade practices.
China announces policy measures to boost foreign trade... China’s commerce ministry announced a series of policy measures aimed at boosting foreign trade, including expanding exports of commodities such as agricultural products and stepping up support for small trading firms. Commerce officials said they would encourage financial institutions to provide more products to manage currency risks and to strengthen macro policy coordination to keep the yuan “reasonably stable,” the ministry said.
China advisers call for steady 5% 2025 economic growth goal, stronger stimulus... Chinese government advisers are recommending Beijing should maintain an economic growth target of around 5.0% for next year, pushing for stronger fiscal stimulus to mitigate the impact of expected U.S. tariff hikes on the country’s exports, Reuters reported. Four of the six advisers who spoke with Reuters favor a 2025 target of around 5%. One adviser recommends a goal of “above 4%” and another suggests a 4.5% to 5% range. A Reuters poll this week predicted China will grow 4.5% next year, but also tipped that tariffs could impact growth by up to 1 percentage point. The advisers, who do not participate in decision-making, will submit their proposals to the closed-door annual Central Economic Work Conference next month, when top leaders discuss policies and goals for next year. The recommendations of the advisers are considered by policymakers in the final decision-making process.
Slow developing cash cattle trade... Cash cattle negotiations remained limited on Wednesday, while opinions on the eventual direction of trade were mixed. Unless packers unexpectedly raise cash bids, it appears the bulk of this week’s trade may not take place until Friday, which is rather common during weeks featuring a Cattle on Feed Report.
Cash hog index continues to bleed lower... The CME lean hog index is down another 26 cents to $87.83 as of Nov. 19, the eighth decline in the last nine days. While daily losses haven’t been severe, the seasonal decline has become persistent after a later-than-normal start. December lean hog futures finished Wednesday $7.305 below today’s cash quote, signaling traders currently expect an average weekly decline of nearly $2.50 in the cash index through contract expiration.
Overnight demand news... South Korea purchased 66,000 MT of corn expected to be sourced from the U.S. or South America. Taiwan purchased 80,000 MT of U.S. milling wheat.
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. Agricultural Exchange Rate Data Set — ERS
· 2:00 p.m. Sugar: World Markets and Trade — FAS
· 2:00 p.m. Livestock Slaughter — NASS