Good morning!
Wheat firmer, corn choppy and beans weaker early this morning... Wheat futures are mildly firmer and trading near session highs after facing pressure earlier in the overnight session. Corn is chopping around unchanged, while soybeans are weaker. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny lower, soybeans are 7 to 8 cents lower and wheat futures are 1 to 3 cents higher. The U.S. dollar index is more than 300 points higher and front-month crude oil futures are around 50 cents lower.
U.S. East Coast, Gulf port strike begins... Dockworkers across 36 major ports on the U.S. East and Gulf coasts have gone on strike for the first time in nearly five decades, disrupting half of the nation’s trade volumes. While negotiations between the dockworkers’ union and the U.S. Maritime Alliance continue, President Joe Biden has not invoked national security laws to force workers back to the docks. Key issues include wage increases and opposition to automation at ports. A one-week strike would cost the U.S. economy about $2.1 billion according to an estimate Monday from the Anderson Economic Group (AEG), a Michigan research firm with expertise in estimating the cost of strikes and other disruptions. Most of that would be a $1.5 billion loss in value of some of the goods that wouldn’t be delivered on time, such as perishable goods. USDA Secretary Tom Vilsack said that last week that most of the effect for agriculture would be on imports, especially higher-value items from Europe. While grain and other bulk exports would not be affected, containerized shipments of agricultural products would be impacted. Link to our special report on the topic.
BNSF rail to resume issuing grain shuttle permits to Mexico... BNSF Railway will resume issuing permits for grain shuttles heading to Mexico today, the company told Reuters. In late August, BNSF stopped issuing permits for grain shuttle trains going into Mexico, in part because booming demand outstripped the system’s capacity, creating heavy congestion and a growing backlog of loaded trains. BNSF said it will resume issuing the permits, except for a small number in early October. Some permit requests still may not be fulfilled and BNSF is monitoring the situation, the company said. Union Pacific also has stopped issuing permits for grain shuttle trains to Mexico, according to its website. Ferromex, the Mexican railroad that interchanges with BNSF and Union Pacific, has embargoed permits for grain trains at border crossings at Eagle Pass and El Paso, Texas, USDA said.
Cordonnier again trims U.S. soybean yield, production forecasts... Crop consultant Dr. Michael Cordonnier trimmed his U.S. soybean yield forecast another 0.5 bu. to 51.5 bu. per acre, noting continued dryness in the central and western Corn Belt and potential for crop damage due to Hurricane Helene. That reduced his soybean production estimate to 4.44 billion bushels. Cordonnier kept his corn yield and production forecasts at 182.5 bu. per acre and 15.09 billion bu., respectively. This marked Cordonnier’s third straight weekly decline for the soybean crop and he maintained his neutral to lower bias. He has a neutral bias toward the corn crop.
Corn, soybean CCI ratings show mild late-season improvements... USDA rated 64% of the corn crop as “good” to “excellent” and 12% “poor” to “very poor.” The soybean crop was rated 64% “good” to “excellent” and 11% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop inched up 0.1 point to 366.1, while the soybean crop improved 1.4 points to 359.9. The CCI ratings ae 25.3 points (7.4%) above year-ago for corn and 23.4 points (6.9%) higher for soybeans. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of Sept. 29:
· Corn: 64% good/excellent (65% last week); 96% dented (95% average); 75% mature (70% average); 21% harvested (18% average).
· Soybeans: 64% good/excellent (64% last week); 81% dropping leaves (73% average); 26% harvested (18% average).
· Cotton: 31% good/excellent (37% last week); 72% bolls opening (71% average); 20% harvested (16% average).
· Winter wheat: 39% planted (38% average); 14% emerged (13% average).
Sharp slowdown in soy crush expected... Analysts expect USDA to show soybean crush slowed to 167.3 million bu. in August, down 26.1 million bu. (13.5%) from July and 1.7 million bu. (1.0%) from last year. Corn-for-ethanol use is expected to total 469.0 million bu., down 4.5 million bu. (1.0%) from July but up 27.3 million bu. (6.2%) from last year.
U.S., China to hold trade, economic talks... Chinese Commerce Minister Wang Wentao and his U.S. counterpart will hold a call in the near future on trade and economic ties, China’s state-run Xinhua news agency reported, citing people familiar with the matter. They will exchange views on bilateral economic and trade relations and key issues of mutual concern, including restrictions on electric vehicles, Xinhua reported.
Euro zone consumer inflation dips below 2% target... Annual consumer inflation in the euro zone fell to 1.8% in September, the lowest since April 2021, according to preliminary data. Inflation is now below the European Central Bank target of 2%, reinforcing an already solid case for an interest rate cut this month as a three-year battle to tame runaway price growth nears its end. Core inflation, which excludes prices for energy, food, alcohol and tobacco decreased to 2.7%.
Packers improve short-term cattle inventories... Packers purchased a large amount of cattle again last week and have fresh contracted supplies available with the flip of the calendar. Cash sources note packers are better positioned on near-term slaughter needs, which could lead to less aggressive bidding in the cash market, though feedlots have little incentive to move cattle at lower prices. A lengthy standoff in cash cattle negotiations seems likely this week.
Cash hog index slips... The CME lean hog index is down 2 cents to $84.01 as of Sept. 27. October lean hog futures finished Monday at a $1.76 discount to today’s cash quote, signaling traders anticipate the cash index will continue to slide into mid-October.
Overnight demand news... Thailand tendered to buy 180,000 MT of optional origin feed wheat. Jordan passed on a tender to buy up to 120,000 MT of optional origin 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
· 2:00 p.m. Commodity Costs and Returns — ERS
· 2:00 p.m. Milk Cost of Production Estimates — ERS
· 2:00 p.m. Cotton System Consumption and Stocks — NASS
· 2:00 p.m. Fats and Oils: Oilseed Crushings, Production, Consumption — NASS
· 2:00 p.m. Grain Crushings and Co-Products Production — NASS