Good morning!
Light, two-sided trade overnight... Corn, soybeans and wheat swung to both sides of unchanged in a lightly traded overnight session but are mostly weaker this morning. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 1 to 4 cents lower, winter wheat futures are 3 to 5 cents lower and spring wheat is 2 cents lower to 3 cents higher. Front-month crude oil futures are around $1.75 lower and the U.S. dollar index is around 300 points higher this morning.
USDA’s November crop reports out later this morning... USDA is expected to make modest revisions to its corn and soybean crop estimates in its Crop Production Report at 11 a.m. CT. Relatively modest shifts are also expected to the 2022-23 U.S. balance sheets, with ending stocks for corn, soybeans and wheat all anticipated to increase. The biggest movement is likely to come in global wheat crop estimates. Click here to view report expectations.
GOP takes House, Senate is close... Democrats performed better than expected in Tuesday’s midterm elections, as it seems pollsters favored the GOP too much as they changed their methodology to compensate for undercounting Republican voters in other years. It appears Republicans will win control of the House but by a modest five seats or so, though it could be a little higher with some races still unsettled. The Senate is close but currently titling toward Democrats, though the GOP could still win the chamber pending final votes in Nevada and Arizona and winning any runoff in Georgia.
Results for key farm-state lawmakers... Sen. Chuck Grassley (R-Iowa) won easily despite a usually accurate Iowa poll showing the race was close. House Ag Chairman David Scott (D-Ga.) and ranking member G.T. Thompson (R-Pa.) were easily re-elected. Sen. John Boozman (R-Ark.) won re-election. Georgia’s Sanford Bishop and Virginia’s Abigail Spanberger were among Democrats winning close races. Bishop chairs the House Ag Appropriations Subcommittee, while Spanberger chairs the House Ag subcommittee that oversees conservation programs.
Brazil raises soybean crop forecast, cuts corn production projection... Brazil is now expected to produce a record 153.5 MMT of soybeans this year, up 1.2 MMT from its prior forecast, according to Conab. The Brazilian crop estimating agency raised its soybean acreage forecast by 350,000 hectares. Amid the expected higher crop size, Conab raised its 2022-23 Brazilian soybean export forecast by 570,000 MT to 96.45 MMT. Conab cut its Brazilian corn crop projection by 540,000 MT to 126.4 MMT. The agency maintained its 2022-23 corn export forecast at 45 MMT. Conab raised its Brazilian wheat crop forecast by 140,000 MT to a record 9.5 MMT.
France cuts wheat export forecasts... France’s ag ministry trimmed its forecast for 2022-23 French wheat exports outside the European Union to 10 MMT, down 100,000 MT from its prior outlook. The ag ministry also lowered its forecast for wheat exports within the 27-nation bloc to 6.94 MMT, down 130,000 MT from its previous figure.
Chinese producer prices fall, consumer inflation moderates... China’s producer price index (PPI) fell 1.3% from year-ago in October, the first annual decline in factory gate prices since December 2020. That reflected weak domestic demand and disruptions to output amid strict Covid restrictions as well as falling commodity prices. China’s consumer price index (CPI) rose 2.1% from a year earlier, easing from a 29-month high of a 2.8% increase in September, mainly driven by falling food prices. Food prices rose 7.0%, slowing from an 8.8% jump the previous month. However, pork prices surged 51.8%.
ECB survey: Euro zone consumers see inflation rising... Inflation expectations among euro zone consumers continued to rise in September, even as economic growth and income forecasts declined markedly, a European Central Bank (ECB) survey showed. Euro zone consumers see inflation at 7.3% in the 12 months ahead, up from 6.9% they anticipated in August, ECB’s Consumer Expectations Survey indicated. Three years out, inflation expectations rose to 4.8% on average from 4.7%, suggesting little confidence among consumers ECB will manage to get price growth back to its 2% target by then.
Predictably slow start for cash cattle trade... Packers have been slow to establish bids, while feedlots’ asking prices are around $2 higher in the Southern Plains. The impending winter storm doesn’t appear to be advancing cash negotiations any in the northern market where some locations could see blizzard-like conditions late this week. Firmer cash trade is eventually expected to surface, though it appears late-week action is likely.
Direct hog price firms... The CME lean hog index is down another 60 cents to $90.28 (as of Nov. 7), continuing its string of seasonal price declines. But the national direct cash hog price firmed $2.45 on Tuesday. If direct prices can build on yesterday’s strength it would suggest a short-term low in the index.
Overnight demand news... Algeria purchased 480,000 MT of optional origin milling wheat, the bulk of which is expected to be sourced from Russia. Taiwan purchased 65,000 MT of corn expected to be sourced from Brazil. Japan is seeking 70,000 MT of feed wheat and 40,000 MT of feed barley.
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
- 11:00 a.m. WASDE — ERS
- 11:00 a.m. Cotton Ginnings — NASS
- 11:00 a.m. Crop Production — NASS
- 11:15 a.m. Cotton: World Markets and Trade — FAS
- 11:15 a.m. Grain: 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. Broiler Hatchery — NASS