Good morning!
Grains firmer overnight... Corn, soybeans and SRW wheat built on Wednesday’s late price strength during the overnight session while HRW and HRS wheat rebounded from their losses. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are mostly 9 to 10 cents higher and wheat futures are 1 to 3 cents higher. The U.S. dollar index is around 325 points lower and front-month crude oil futures are 75 cents lower.
Weekly Export Sales Report out this morning... For the week ended Oct. 31, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) |
Corn | 1,700,000-2,500,000 | 2,341,667 |
Wheat | 250,000-550,000 | 411,424 |
Soybeans | 1,200,000-2,200,000 | 2,273,262 |
Soymeal | 150,000-500,000 | 208,366 |
Soyoil | 0-50,000 | 10,414 |
China’s soybean imports slowed in October but on record pace... China imported 8.09 MMT of soybeans in October, down 3.28 MMT (28.8%) from September but up 2.93 MMT (56.8%) from last year. Through the first 10 months of this year, China imported 89.94 MMT of soybeans, up 11.2% from the same period last year and just 10.37 MMT shy of the record in 2020. Chinese buyers are expected to rush to import soybeans before Donald Trump takes office in January.
China’s exports surge as factories front-run tariff threats... China’s exports surged 12.7% from year-ago in October to a 27-month high of $309.06 billion, up sharply from 2.4% growth in September. This marked the seventh consecutive month of export growth and the fastest pace since July 2022, as manufacturers front-loaded orders in anticipation of further tariffs from the U.S. and EU. China’s imports fell 2.3% from last year to $213.3 billion in October, the first decline since June amid weak domestic demand. That pushed China’s trade surplus to $95.27 billion from $81.71 billion in September. The trade surplus with the U.S. increased slightly to $33.50 billion in October from $33.33 billion in September. For the first 10 months of 2024, China’s trade surplus stood at $785.3 billion, with exports rising 5.1% to $2.93 trillion while imports grew 1.7% to $2.14 trillion. During the period, the trade surplus with the U.S. stood at $291.38 billion.
China’s Xi urges U.S. to ‘get along’ as he congratulates Trump... Chinese President Xi Jinping congratulated Donald Trump on his U.S. presidential win and urged both nations to find the “right way to get along,” amid the threat of sharply increased tariffs and another trade war. Stable, sound and sustainable U.S./China relations serve the interests of both, Xi said, adding that other countries would expect the two powers to “respect each other (and) co-exist peacefully.” Xi also called for strengthened dialogue to properly manage differences. Echoing Xi’s call for stability, the commerce ministry said China was willing to jointly develop healthy economic and trade ties the United States.
Fed expected to cut interest rates... The Fed is expected to cut interest rates 25 basis points following the conclusion of its two-day monetary policy meeting at 1:00 p.m. CT. But the path of future rate cuts is uncertain after Donald Trump’s return to the presidency, which could stoke inflation and turn the Fed more hawkish.
UK cuts interest rates... The Bank of England (BOE) cut British benchmark interest rates 25 basis points to 4.75%, while saying future reductions were likely to be gradual as it monitors inflation and economic growth. BOE’s cautious language on the future interest rate cuts was similar to previous months, maintaining investors’ view that it is likely to cut interest rates more slowly than the European Central Bank.
China’s central bank head pledges to support economic recovery... People’s Bank of China (PBOC) Governor Pan Gongsheng said China will continue to implement a supportive monetary policy to help promote sustained economic recovery. China will promote the opening of its financial services sector and strengthen communication with markets, Pan said, and “maintain a dynamic balance between economic growth and quality, internal and external factors, as well as investment and consumption, and will continue to implement a supportive monetary policy.” Investors are closely watching a meeting of China’s top legislative body this week for clues on the scale and timing of expected fiscal measures.
China asks banks to lower interbank deposit rates to boost growth... Chinese regulators have asked the country’s banks to lower the rates they pay to deposits from other financial institutions to free up funds to boost the economy, Bloomberg reported, citing people familiar with the matter. China’s interest rate self-disciplinary mechanism, a supervisory body overseen by the central bank, said banks should benchmark the interbank deposit rate against the 7-day reverse repo rate, currently set at 1.5% annually. Some banks paid an annual rate of 1.8% or above to attract savings from financial counterparties.
China’s meat imports continue to slow... China imported 535,000 MT of meat during October, down 1.1% from September and 3.1% less than year-ago. Through the first 10 months of this year, China imported 5.475 MMT of meat, down 12.5% from the same period last year.
Wholesale beef prices weaken... Wholesale beef prices fell $1.62 for Choice to $315.59 and $2.04 for Select to $283.20 on Wednesday. That’s the lowest Choice price since Oct. 14. While movement stayed strong at 131 loads, packer margins are being squeezed, likely limiting their willingness to pay higher prices for cash cattle this week.
December hogs rebound... December lean hog futures filled the Oct. 29 gap on the daily chart and then moderately rebounded to finish near session highs on Wednesday amid support from the contra-seasonally firming cash index. The CME lean hog index is up another 45 cents to $90.24 as of Nov. 5, the 14th straight daily gain and $8.115 above yesterday’s closing price in December hogs.
Overnight demand news... South Korea purchased 65,000 MT of corn from the U.S., South America or South Africa and 128,000 MT of optional origin feed wheat. Japan purchased 121,790 MT of milling wheat via its weekly tender, including 71,712 MT U.S., 28,978 MT Canadian and 21,100 MT Australian. Algeria tendered to buy up to 240,000 MT of corn to be sourced from Brazil or Argentina.
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
· 1:00 p.m. FOMC Meeting Concludes — Fed
· 2:00 p.m. Fruit and Tree Nuts Yearbook — ERS
· 2:00 p.m. U.S. Agricultural Trade Data Update — ERS