Good morning!
Wheat and corn firmer, soybeans choppy overnight... Winter wheat markets traded moderately higher overnight, while corn and spring wheat posted mild gains and soybeans pivoted around unchanged. As of 6:30 a.m. CT, corn futures are trading 2 cents higher, soybeans are mostly a penny lower, winter wheat futures are 6 to 8 cents higher and spring wheat is 3 to 5 cents higher. The U.S. dollar index is trading just below unchanged, while front-month crude oil futures are around $1.00 higher.
Hurricane Milton quickly rips through central Florida... Hurricane Milton made landfall as a Category 3 storm late Wednesday along the west-central Florida Gulf Coast and quickly ripped through the middle of the state before moving off the east-central coast prior to dawn, leaving behind widespread damage. World Weather Inc. note, “Preliminary wind data suggests widespread citrus fruit droppage should have occurred as a result of the storm’s excessive wind and the odds are good that flooding has many fruit and vegetable crops that are produced close to the ground at least vulnerable to damage.”
Florida fertilizer production impacted by Milton... Milton shifted south of the Tampa area just before making landfall, keeping the brunt of the storm from the major phosphate production areas in the state. There was damage to phosphate production and storage, but it likely wasn’t as bad as it could have been. Mosaic idled their Florida operations mining for phosphate rock used in fertilizer production ahead of the storm. As much as 42% of U.S. ammonium phosphate, 32% of U.S. phosphate rock and half of U.S. wet-processed phosphoric acid production capacity is located near Tampa Bay, according to Veronica Nigh with The Fertilizer Institute, with 40% of all U.S. phosphate fertilizer exports and 27% of total fertilizer exports moving through the port of Tampa Bay. “Certainly, the impact of these hurricanes is going to continue to lead to elevated phosphate prices for the foreseeable future,” Nigh said.
Ports slowly catching up after three-day strike... Supply chains are slowly catching up and ship queues outside major East Coast and Gulf ports are down from their peaks after last week’s three-day strike by dockworkers. According to a Bloomberg tally using vessel tracking data, the number of ships queued outside Atlantic and Gulf ports stood at 25 as of Wednesday, down from a peak of 49 on Oct. 4.
Weekly Export Sales Report out this morning... For the week ended Oct. 3, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) |
Corn | 900,000-1,700,000 | 1,684,069 |
Wheat | 250,000-550,000 | 443,697 |
Soybeans | 800,000-1,700,000 | 1,443,535 |
Soymeal | 100,000-400,000 | 228,563 |
Soyoil | 0-20,000 | 30,838 |
Russian ag ministry to meet with exporters on Friday... Russia’s Agriculture Ministry has called the country’s major grain exporters to a meeting on Friday, three sources close to the matter told Reuters. Presumably, the meeting will be about wheat export levels for 2024-25. The ministry is expected to release its revised estimate for the 2024 grain harvest today. The estimate will determine how much wheat can be exported in 2024-25.
Strategie Grains maintains wheat production estimate, raises corn and barley crops... Strategie Grains kept its EU wheat production forecast at a 12-year low of 114.4 MMT, down 12.7 MMT (10%) from last year. The firm’s EU corn production forecast was raised 200,000 MT to 58.1 MMT, though that would still be down 4.9 MMT (7.8%) from last year. Barley production increased 100,000 MT to 50.6 MMT, up 2.8 MMT (5.9%) from last year.
Exchange lowers Argentine wheat production forecast... The Rosario Grain Exchange lowered its 2024-25 Argentine wheat production forecast, citing a lack of rains in key farming areas. It now sees wheat production at 19.5 MMT, down from a previous estimate of 20.5 MMT. The exchange maintained its estimates for the corn crop at between 51 MMT and 52 MMT and soybean production between 52 MMT and 53 MMT.
Turkey to allow low-tariff corn imports through year-end... Turkey will allow imports of 1 MMT of corn at a tariff rate of 5% until the end of the year, the trade ministry said. The import quota will secure supply/demand balance for corn since domestic production is insufficient to meet consumption. The current 130% tariff will be imposed on corn imports exceeding 1 MMT.
IEA: Renewables to generate nearly half of global electricity by 2030, but fall short of UN targets... The International Energy Agency (IEA) reports that renewable energy is on track to generate almost half of global electricity by the end of the decade, with over 5,500 gigawatts of capacity expected by 2030 — nearly triple the growth seen between 2017 and 2023. However, this growth trajectory is still not enough to meet the United Nations’ goal of tripling global renewable capacity. China is projected to account for nearly 60% of all new renewable capacity by 2030, making it home to almost half of the world’s total renewable capacity. Solar photovoltaic energy is expected to lead the charge, contributing 80% of capacity growth by 2030, thanks to falling costs and supportive policies.
China kicks off swap facility to aid stock market... The People’s Bank of China (PBOC) said it would start accepting applications from financial institutions to join a newly created funding scheme, initially worth 500 billion yuan ($70.62 billion), to aid capital markets. Under the swap facility, eligible securities firms, fund companies and insurers can use their assets including bonds, stock ETFs and holdings in constituents of the CSI 300 Index as collateral in exchange for highly liquid assets such as treasury bonds and central bank bills. PBOC first announced the scheme on Sept. 24 as part of a broad package of policies to stimulate the economy and boost capital markets.
Slow going on cash cattle negotiations... Cash cattle negotiations have yet to get underway. Packers are hoping to buy cattle at lower prices after four weeks of strength despite negative margins. Feedlots are in no hurry to move cattle at lower prices as they are content to add to already record carcass weights amid reduced feedlot numbers.
Cash hog fundamentals remain choppy... The CME lean hog index is up 25 cents to $84.47 as of Oct. 8. The index is in the middle of the recent choppy range, 46 cents above the Sept. 27 low and 43 cents below the Oct. 2 high. The pork cutout firmed 39 cents to $95.20 on Wednesday. The cutout is holding in a short-term choppy range from the September low at $92.91 to this month’s high at $96.31.
Overnight demand news... Japan purchased 115,050 MT of milling wheat via its weekly tender, including 56,690 MT U.S., 34,610 MT Canadian and 23,750 MT Australian.
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
· 11:00 a.m. Meat Price Spreads — ERS
· 2:00 p.m. U.S. Agricultural Trade Data Update — ERS