Good morning!
Beans firmer, corn and wheat lower to start the week... Corn and wheat faced followthrough selling overnight, while the soybean market extended last Friday’s corrective gains. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are mostly 3 cents higher, winter wheat markets are 7 to 8 cents lower and spring wheat is 4 to 5 cents lower. The U.S. dollar index is nearly 500 points lower and front-month crude oil futures are trading just below unchanged.
Most of Brazil, Argentina to receive rains... Some rainfall is expected across most of Brazil this week, including dry southern areas from midweek through the weekend. Argentina will experience timely rainfall this week with all areas getting rain at one time or another.
China approves hub for allocation of bulk commodities in Zhejiang... China’s commerce ministry approved plans for building a hub for the allocation of bulk commodities in the free-trade zone in the eastern Zhejiang province. The ministry will support the building of bonded soybean trading warehouses in Zhoushan port in Zhejiang. It will also allow relevant business entities to sell and transfer spot soybeans in bonded warehouses through a soybean trading center.
Rollins tabbed to lead USDA... Brooke Rollins was officially selected by President-elect Donald Trump on Saturday to serve as USDA Secretary. Rollins is the president and CEO of the America First Policy Institute (AFPI), a think tank established by former Trump officials to promote conservative policies. AFPI has advocated for curbing foreign ownership — particularly from China — of U.S. farmland, an issue that has bipartisan support in Congress. She previously served as the president and CEO of the Texas Public Policy Foundation (TPPF) from 2003 to 2018, where she expanded the organization significantly and positioned it as a leading state-based think tank. She previously served as the Director of the Domestic Policy Council and Assistant to the President for Strategic Initiatives during Trump’s first term. In these roles, she was instrumental in shaping key domestic policies across various sectors. Rollins holds a degree in agricultural development from Texas A&M University and a Juris Doctor from the University of Texas School of Law. Her educational credentials are complemented by her practical experience, having grown up on a farm in Texas. Given her educational background and professional focus, Rollins has developed insights into agricultural policies, trade issues and rural development, which are critical for the USDA’s mission.
Other key Trump leadership selections... Trump tapped Scott Bessent as Treasury Secretary, Russell Vought to lead the Office of Management and Budget, Rep. Lori Chavez-DeRemer as Labor Secretary, Scott Turner as Secretary of Housing and Urban Development, Dr. Janette Nesheiwat as Surgeon General, Dr. Dave Weldon to lead the Centers for Disease Control and Prevention, Dr. Marty Makary as head of the Food and Drug Administration, Alex Wong as principal deputy national security adviser and Sebastian Gorka as senior director for counterterrorism.
The week ahead in Washington... Lawmakers are out for a one-week Thanksgiving recess. Trump will continue to announce appointments and nominees for key leadership positions in his second administration. Key positions not yet filled include U.S. Trade Representative, Small Business Administration chief, chair of the Council of Economic Advisers and director of the White House Office of Science and Technology Policy. The economic focus will be Tuesday’s release of the Fed’s minutes from the last Federal Open Market Committee monetary policy meeting. Key USDA reports will be today’s Food Price Outlook and Cold Storage Report and Tuesday’s Outlook for U.S. Agricultural Trade.
China keeps MLF rate unchanged for second month... The People’s Bank of China (PBOC) held the interest rate on the one-year medium-term lending facility (MLF) steady at 2%. PBOC offered 900 billion yuan ($124 billion) of policy loans via the tool, ending up with a net withdrawal of 550 billion yuan in November after deducting 1.45 trillion yuan of maturities. PBOC also injected CNY 249.3 billion through the reverse repo operation and retained its rate at 1.5%.
H5N1 found in raw milk in California... The H5N1 virus was detected in a batch of unpasteurized milk sold by Raw Farm in California, prompting a product recall and warnings from health authorities. The milk, marked with a “best by” date of Nov. 27, 2024, has been pulled from store shelves. Health experts have long cautioned against consuming raw milk due to risks of foodborne illnesses, including salmonella and listeria. The recent case follows the first U.S. child bird flu diagnosis and growing concerns as the virus increasingly infects mammals and humans. While pasteurization kills H5N1, rising demand for raw milk, promoted by influencers and wellness advocates, has driven its availability. Authorities advise avoiding contact with raw milk from the affected batch to reduce infection risks.
U.S. heightens import restrictions on animal products from Mexico... On Nov. 22, Mexico’s Chief Veterinary Officer informed USDA of a positive detection of New World screwworm in a cow in the southern Mexico state of Chiapas, at an inspection checkpoint close to the border with Guatemala. These fly larvae infest warm-blooded animals, including humans, causing severe infections. USDA’s Animal and Plant Health Inspection Service (APHIS) has heightened import restrictions on animal products from Mexico and intensified efforts in Central America to contain the pest’s spread. APHIS is collaborating with regional partners, releasing sterile flies and maintaining vigilance along the southern U.S. border. This will primarily impact feeder cattle imports from Mexico.
Negative Cattle on Feed Report... USDA estimated there were 11.986 million head of cattle in large feedlots (1,000-plus head) as of Nov. 1, up 30,000 head (0.3%) from year-ago. Analysts on average expected a 0.1% decline in feedlot inventories. October placements increased 5.3% and marketings rose 4.7% from year-ago levels. All of the categories came in on the negative side of the average pre-report estimates, which could weigh on cattle futures. But we doubt there will be sustained market impacts.
Cold Storage Report out this afternoon.... USDA will detail frozen meat stocks at the end of October. The five-year average is a 15.5-million-lb. increase in beef stocks and a 16.8-million-lb. decline in pork stocks during the month.
Cash cattle snap price skid... The official average price of last week’s cash cattle trade won’t be known until later this morning, but cattle traded generally steady to $1 higher last week, snapping a three-week price skid. It’s uncertain how active this week’s cash trade will be given the Thanksgiving holiday. Packers will likely be reluctant to increase cash bids again given negative margins, while feedlots are unlikely to be willing sellers at lower prices.
Seasonal pressure mounts in hog fundamentals... The CME lean hog index is down another 43 cents to $87.01 as of Nov. 21, $3.60 below the Nov. 6 peak. The pork cutout fell $1.30 on Friday to $91.77, the lowest level since March 7.
USDA extends comment period on cattle market regulation proposal... USDA has extended the comment period for its advance notice of proposed rulemaking on fed cattle market regulations. Public feedback on regulatory options to address price discovery and fairness concerns is now due by Jan. 10, 2025, a 30-day extension from the original deadline. USDA stated that input will shape its approach and potential future regulatory changes.
Weekend demand news... Algeria tendered to buy a nominal 50,000 MT of optional origin soft 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
· 8:00 a.m. Food Price Outlook — ERS
· 10:00 a.m. Weekly Export Inspections — AMS
· 11:00 a.m. Cotton and Wool Yearbook — ERS
· 2:00 p.m. Cold Storage — NASS
· 2:00 p.m. Peanut Stocks and Processing — NASS
· 2:00 p.m. Poultry Slaughter — NASS
· 3:00 p.m. Crop Progress — NASS