Good morning!
Corn firmer, beans and wheat weaker overnight... Corn futures have firmed after light, two-sided trade overnight, while the soybean and wheat markets faced pressure for most of the session. As of 6:30 a.m. CT, corn futures are trading fractionally higher, soybeans are 5 to 7 cents lower and wheat futures are mostly 2 to 5 cents lower. The U.S. dollar index is modestly firmer and front-month crude oil futures are around $1.00 lower.
November crop reports out later this morning... USDA’s corn and soybean crop estimates aren’t likely to change much in the Crop Production Report at 11:00 a.m. CT. Analysts expect USDA to estimate corn production at 15.189 billion bu. (15.203 billion bu. in October) and the soybean crop at 4.557 billion bu. (4.582 billion bu. in October). Barring any supply-side surprises, adjustments to usage forecasts will impact changes to 2024-25 ending stocks. Analysts expect ending stocks of 1.946 billion bu. for corn (1.999 billion bu. in October), 532 million bu. for soybeans (550 million bu. in October) and 813 million bu. for wheat (812 million bu. in October). USDA’s global wheat production forecasts might draw the most attention given declining private crop forecasts for several countries.
China raises 2023-24 soybean, corn imports... China’s ag ministry raised its 2023-24 (Oct.-Sept.) import figures for soybeans and corn. Soybean imports increased 7.4% from the previous year to 104.74 MMT, 2.45 MMT higher than the October estimate. Corn imports jumped 25.1% to 23.41 MMT, up 410,000 MT from last month’s estimate. The ministry left the 2024-25 import forecasts at 94.6 MMT for soybeans and 13 MMT for corn.
Western European planting delays raise concerns with wheat crop... Delayed planting because of heavy rain in western Europe has raised concerns with a potential repeat of the past growing season, which resulted in one of the worst harvests in decades. In France, farmers had planted just 62% of intended wheat acres, behind 65% at this point last year and the five-year average of 77%. Germany, Poland and the UK have also dealt with wet fall conditions, though not to the degree of France.
Russia’s wheat export tax rises again... Russia’s tax on wheat exports rose to 2,569.2 rubles ($26.30) per metric ton for the week of Nov. 13-19 up from 2,517.0 rubles ($25.77) the previous week. The export tax has surged 93.4% in the last five weeks and is 183% above the mid-September level. Russia’s ag ministry has reportedly asked exporters to not sell wheat below a minimum price of $250 per metric ton. The tax hikes are seen as a way to curb wheat exports.
India’s rice stockpiles hit record levels... India’s state-owned rice inventories surged to a record 29.7 MMT at the start of this month, sources told Reuters, nearly three times the government’s target, as export curbs imposed over the past two years bumped up local supplies. State stockpiler Food Corporation of India is expected to purchase 48.5 MMT of summer-grown rice in the 2024-25 marketing year that began Oct. 1, adding to the bulging inventories. Huge stockpiles will allow India to boost export without worrying about domestic supplies.
FAO food price index rises to 18-month high in October... The UN Food and Agriculture Organization global food price index rose 2.0% from the previous month in October, as all components except meat increased, led by a 7.3% jump in vegoils. The October index increased 5.5% from last year to the highest level since April 2023. Compared to year-ago, prices rose 7.5% for meat, 21.4% for dairy and 27.3% for vegoils, while values fell 8.3% for cereal grains and 18.6% for sugar.
China kicks off $1.4 trillion in fiscal support... China kicked off a fresh round of fiscal support on Friday for its sputtering economy with a package that eases debt repayment strains for local governments, with Finance Minister Lan Foan signaling further stimulus in the pipeline. Beijing will let local governments allocate 10 trillion yuan ($1.40 trillion) towards reducing off-balance sheet, or “hidden” debts, officials said after a week-long parliament meeting. Local governments’ debt quota will be raised by 6 trillion yuan and they would be able to use another 4 trillion yuan in issuance that has already been approved to finance the debt swaps, aimed at reducing systemic financial risks. China’s top legislative body, the standing committee of the National People’s Congress (NPC), approved a bill raising the ceiling for local governments to issue special bonds to 35.52 trillion yuan from 29.52 trillion. However, officials didn’t disclose any steps to boost sluggish consumer demand.
EU, China tout progress on EV talks... The European Union and China said they made some progress after a week of technical talks in Beijing aimed at scaling back or reversing European tariffs the bloc applied to electric vehicles (EVs) made in China. The EU’s executive arm described the outcome of this week’s negotiations as making “technical progress,” a stance echoed by China’s ministry of commerce. The EU and China have been seeking an agreement on so-called price undertakings — a complex mechanism to control prices and volumes of exports, used to avoid tariffs. The EU reiterated that individual agreements between carmakers and the EU are possible under World Trade Organization rules. But Beijing wants to conclude an umbrella agreement, making that one of the obstacles in the talks.
Union Pacific to open new intermodal terminal in Kansas City... Union Pacific (UP) Railroad is set to open a new intermodal terminal near downtown Kansas City, Missouri, next year, aimed at serving domestic and international shipments of grains, consumer goods, refrigerated products, and pet foods. The terminal will connect via UP’s extensive 32,000-mile network, reaching markets in Mexico, Canada, and beyond. In 2022, U.S. railroads moved 4.7 MMT of containerized grain, with 300,000 MT originating from Kansas City, primarily for export through Los Angeles.
France joins UK with ‘high’ risk designation for bird flu... France has stepped up its bird flu risk assessment to “high” from “moderate,” it said on Friday in a decree that will trigger reinforced security measures around poultry farms. The heightened risk status follows confirmation of infection in migratory wild birds in neighboring countries and aims to strengthen surveillance and prevention measures, France’s agriculture ministry said. The upgrade to risk status in the seasonal assessment is kicking in earlier than last year, taking effect in early November rather than December. Earlier this week, Britain increased the risk level of bird flu to “high” after two different strains of the virus, H5N5 and H5N1, were detected in wild birds in the country.
Slow developing cash cattle trade... Cash cattle activity remained limited Thursday. With wholesale beef prices plunging $6.13 for Choice to $309.46 and $3.48 for Select to $279.72 on Thursday, and packers owning a lot of inventory after recent hefty purchases, it’s likely cash cattle will trade lower, as they work to protect eroding margins. However, feedlots will likely be reluctant sellers at lower prices.
Cash hog index continues to climb, wholesale pork plunges... The CME lean hog index is up another 37 cents to $90.61 as of Nov. 6, the 15th straight daily increase in the contra-seasonal rally. Pork cutout fell $4.19 to $97.96 on Thursday, pressured by a $17.05 plunge in primal bellies, though sharp losses were also recorded in hams, ribs and picnics.
Overnight demand news... Exporters reported no tenders or sales.
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
· 11:00 a.m. Crop Production — NASS
· 11:00 a.m. WASDE — WAOB
· 11:00 a.m. Cotton Ginnings — NASS
· 11:15 a.m. Cotton: World Markets and Trade — FAS
· 11:15 a.m. Grains: World Markets and Trade — FAS
· 11:15 a.m. Oilseeds: World Markets and Trade — FAS
· 11:15 a.m. World Agricultural Production — FAS
· 2:00 p.m. Peanut Prices — NASS
· 2:30 p.m. Commitments of Traders — CFTC