Good morning!
Soybeans lead overnight price gains... Soybean futures pushed to their highest levels since September overnight, while corn and wheat were supported by end-of-the-month corrective buying. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are 8 to 11 cents higher, winter wheat futures are 5 to 7 cents higher and spring wheat is mostly a penny higher. Front-month crude oil futures are around $1.75 higher and the U.S. dollar index is about 350 points lower.
China vows crackdown on ‘hostile forces’... China’s ruling Communist Party has vowed to “resolutely crack down on infiltration and sabotage activities by hostile forces” following the largest street demonstrations in decades staged by citizens angered by strict Covid restrictions. While it did not directly address the protests, the statement serves as a reminder of the party’s determination to enforce its rule. Police and paramilitary forces conducted random ID checks and searched people’s mobile phones for photos, banned apps or other potential evidence they had taken part in the demonstrations. Meanwhile, authorities lifted a lockdown on Zhengzhou, home to the world’s biggest iPhone factory. China’s southern Guangzhou city on Wednesday also relaxed Covid restriction rules in multiple districts, though parts of the city classified as “high-risk” remain under lockdown.
China’s factory activity falls to seven-month low... China’s official manufacturing purchasing managers index declined to 48.0 in November from 49.2. That was the second straight month of contraction in factory activity and the lowest reading since April amid a new wave of Covid cases and tough restrictions in some large cities. Output, new orders and exports all declined.
Big jump in final fall HRW CCI rating... When USDA’s final weekly crop condition ratings of the fall are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop jumped 11.3 points to 280.3, though that was still 51.9 points below the five-year average for the end of November. The SRW crop improved 2.8 points to 360.2, which was still 14.5 points below average. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update for the week ended Nov. 27.
- Cotton: 84% harvested (79% average).
- Winter wheat: 91% emerged (90% average), 34% good/excellent (32% last week).
Ukraine shipping a lot more grain via Poland... Around 450,000 MT of Ukrainian grain is being transported via Poland monthly, over 50% more than in the middle of the year, Poland’s infrastructure minister said on Wednesday. “Compared to October last year, the increase in grain transport in the same period of 2022 is over 16 times,” he added.
EPA by court order to announce RFS plans today... EPA will announce volume requirements under the Renewable Fuel Standard (RFS) for 2023 and beyond, with indications it will include levels for at least 2023 and 2024. EPA told Politico it “will meet the deadline for signature” on the proposal, referring to EPA Administrator Michael Regan signing the proposed rule. It will then appear in the Federal Register to formally open the comment period on the plan, but it could take a week or two before that happens. The rule will address electric vehicles (EVs) charged with electricity from biomass and biogas and how the biofuel certificates or e-Renewable Identification Numbers (eRINs) will be handled.
House votes today on legislation to avert a rail strike... Of note, House Speaker Nancy Pelosi (D-Calif.) announced plans for a separate vote on whether to add seven days of sick leave to the contract. The decision comes after a growing chorus of Democrats voiced opposition to Congress passing a railroad deal they viewed as unfriendly to rail workers. “After hearing from our members, we are in agreement that a nationwide rail strike must be prevented — and that more must be done to secure the paid sick leave that hard-working railroaders deserve,” Pelosi said in a statement. President Joe Biden had called on Congress to pass the legislation “without any modifications or delay.” The House vote today will be on legislation pushed by Biden that would put in place the “tentative agreement” between workers and management reached in September. Some unions have refused to endorse that deal, and a potential strike looms as early as Dec. 9, which the administration says would cripple the economy by slowing a supply chain still recovering from problems created by the coronavirus pandemic. The separate vote on the sick days bill would allow Democrats to vote for that proposal without changing the legislation the White House wants enacted quickly.
Euro zone inflation declines for first time in 17 months... The annual rate of consumer inflation across the euro area eased to 10% in November, according to the initial estimate from the EU’s statistical agency Eurostat. That was down from a 10.6% rise in October and the first decline in 17 months. The main contributor to inflation remains the cost of energy but the annual rate of energy price increases slowed last month to 34.9%, down from 41.5% in October. However, food inflation accelerated slightly to 13.6% from 13.1% in October. Core inflation, which strips out energy and food prices, remained steady at an annual rate of 5%.
Malaysia keeps December crude palm oil export duty at 8%... Malaysia maintained its December export tax for crude palm oil at 8% and raised its reference price, the Malaysian Palm Oil Board website showed on Wednesday. The country calculated a reference price of 3,847.24 ringgit ($866.50) per metric ton for December, up from 3,575.80 ringgit in November.
China to auction more wheat next week... China will auction another 40,000 MT of wheat from state reserves on Dec. 7.
China’s sow herd marginally increases in October... China’s sow herd increased 0.4% in October from the month prior to 43.79 million head, according to the country’s ag ministry. The sow herd was 0.7% larger than October 2021.
Beef production remains strong... USDA revised last Saturday’s estimated kill, which pushed last week’s tally to the highest for a Thanksgiving week since 2006. Not only are slaughter levels high, but the average carcass weight at 931 lbs. was a new high for the year and tied for the highest on record with a week in October 2020. Hefty beef production will keep wholesale prices under pressure as packers must move a lot of product through the pipeline.
Hams lead sharp drop in pork cutout... The wholesale pork market was unable to follow up Monday’s strong performance yesterday. While packers moved 331.2 loads of product on the day, it took a $3.84 drop in the cutout value led by a $9.41 plunge in ham prices, to encourage the retailer buying. All cuts except ribs traded lower on the day.
Overnight demand news... South Korea purchased 69,000 MT of corn expected to be sourced from South America.
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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Agricultural Prices — NASS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Egg Products — NASS