Good morning!
Lightly traded overnight session... Corn, soybeans and wheat held in relatively tight ranges while spending time on both side of unchanged during overnight trade. As of 6:30 a.m. CT, corn futures are trading a penny lower, soybeans are 4 to 7 cents higher, SRW wheat is fractionally to a penny higher, while HRW and HRS wheat are 1 to 2 cents lower. Front-month crude oil futures are modestly higher and the U.S. dollar index is around 225 points lower.
Slower jobs growth expected in October... Economists polled by Reuters expect the Labor Department to report non-farm payrolls increased 180,000 in October, which would be down sharply from the 336,000 gain in September. The unemployment rate is expected to hold at 3.8%.
FAO food price index inches lower in October... The UN Food and Agriculture Organization global food price index inched down 0.7 point in October to the lowest level since March 2021, as declines in the price of sugar, cereal grains, vegetable oils and meat more than offset a rise in dairy. Compared to year-ago, prices declined 3.3% for meat, 20.1% for dairy, 17.9% for cereal grains and 26.1% for vegoils, while sugar prices jumped 46.6%.
Commerce Dept. significantly reduces duties on phosphate fertilizers... The U.S. Department of Commerce announced a substantial reduction in duties on phosphate fertilizers imported from Morocco, lowering them from 19.97% to 2.12%, following an annual administrative review of the duties, which involves retroactively examining shipment prices and other factors. The National Corn Growers Association (NCGA) hailed the decision as a significant win for corn growers. Separately, in September, the U.S. Court of International Trade instructed Commerce to reassess the duty rate calculation due to flaws found in its analysis. A decision on this matter is expected on Dec. 13.
Russia cuts wheat export tax... Russia’s wheat export tax for Nov. 8-14 will be 4,529.7 rubles ($48.76) per metric ton based on an indicative price of $252.20. That’s down from a rate of 4,923.4 rubles per metric ton the previous week and the third straight weekly decline.
Indonesia’s state agency secures rice import contracts... Indonesia’s state food procurement agency Bulog has secured contracts for 1 MMT of rice imports from Thailand, Vietnam, Pakistan and Myanmar. Bulog will also explore rice imports from India and Cambodia. Last month, Indonesia said it will import an additional 1.5 MMT of rice in 2023, as drought cut domestic supplies.
Indonesia’s palm oil use for biodiesel to exceed food use for first time... Indonesia’s domestic palm oil consumption for biodiesel will exceed its consumption for food for the first time in 2023, the Indonesia Palm Oil Association said. Meanwhile, the country’s palm oil output is expected to drop at least 1 MMT next year due to impacts from El Niño. Indonesia is expected to fully implement mandatory B35, biodiesel using 35% palm oil mix, in 2024.
U.S. economic growth recipe: secret ingredient revealed... To achieve simultaneous economic growth, rising real wages and a decrease in inflation, the key ingredient is increasing productivity. The Labor Department delivered positive news on this front, reporting a 4.7% annual growth in labor productivity during the third quarter. This marks the second consecutive quarterly improvement and the most significant progress in productivity seen in three years. Oxford Economics economist Michael Pearce explained this higher productivity growth is providing essential support to the economy’s supply side, contributing to the ongoing decline in inflation while maintaining strong economic growth.
China aims to avoid local gov’t ‘debt implosion’... Preventing a local government “debt implosion” is a top priority, China’s securities regulator was quoted by state media China Securities Journal as saying. China should resolve bond default risks of large property firms and strengthen risk monitoring alerts for the debt of local government financing vehicles, the regulator noted.
Still waiting on active cash cattle trade... Cash cattle negotiations have been slow to develop this week. While packers and feedlots work to find a price that will trigger sales, price action in futures on Thursday suggests traders believe cash cattle will eventually trade at higher levels than last week.
Traders continue to narrow hog futures discount... December lean hog futures surged $3.125 on Thursday, finishing at $73.275. The CME lean hog index is down another 10 cents to $76.84 as of Nov. 1. The discount in the lead contract is down to $3.565. The strong rally in hog futures the past two weeks suggests traders feel the cash market won’t suffer its normal seasonal decline into winter.
Overnight demand news... South Korea purchased 50,000 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. Employment Situation — BLS
- 2:00 p.m. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC