Good morning!
Grains mostly firmer overnight... Corn, soybeans and the winter wheat market mildly favored the upside in quiet overnight trade ahead of USDA’s October crop reports later this morning. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are mostly a nickel higher, winter wheat markets are 2 cents higher and spring wheat is fractionally to a penny lower. The U.S. dollar index is holding near unchanged and front-month crude oil futures are about 50 cents lower.
October crop reports out later this morning... USDA will update production forecasts for corn, soybean and cotton at 11:00 a.m. CT. Analysts expect slightly smaller crops, with the average pre-report estimates at 15.155 billion bu. for corn (15.186 billion bu. September), 4.579 billion bu. for soybeans (4.586 billion bu. in September) and 14.270 million bales for cotton (14.512 million bales in September). Final wheat production was set at 1.971 billion bu. in the Small Grains Summary at the end of September. The new production forecasts, along with changes to usage projections, will drive changes to projected new-crop ending stocks, which are expected to be 1.926 billion bu. for corn (2.057 billion bu. in September), 549 million bu. for soybeans (550 million bu. in September), 819 million bu. for wheat (828 million bu. in September) and 3.98 million bales for cotton (4.00 million bales in September).
Florida ports remain closed as Hurricane Milton impacts exports, agriculture... At least seven Florida ports, including St. Petersburg and Jacksonville, remain closed due to Hurricane Milton. Port Tampa Bay, a key hub for fertilizer exports, has reopened with restrictions despite power outages. Fertilizer producer Mosaic Co., which had idled its Florida operations ahead of Milton’s arrival, said in a statement on Thursday it was working to confirm the safety of its employees and will “begin assessing the impact on our operations” when conditions allow. Citrus growers reported significant losses, with early crops heavily affected and ongoing fruit drops expected in the coming weeks.
Biden urges emergency relief after Hurricane Milton... President Joe Biden called on Congress to reconvene and pass emergency relief after Hurricane Milton caused extensive damage across central Florida. He warned that rebuilding efforts will require several billion dollars and suggested Congress will need to replenish FEMA’s disaster relief funds. Homeland Security Secretary Alejandro Mayorkas echoed the call for additional funding, urging Congress to act once it returns from recess.
Russian missiles strike Odesa region of Ukraine... Russia fired missiles overnight on Ukraine’s Odesa region, marking the fourth attack on the key southern grain port hub or vessels hauling Ukrainian grain this week. The Associated Press said, “The apparent Russian effort to disrupt Ukraine’s grain exports, which bring vital revenue for a national economy battered by more than two years of war, coincided with a renewed push by Ukraine President Volodymyr Zelenskyy to ensure continuing military and financial support from his country’s Western partners.”
Mexico backs U.S. in potential trade disputes with China... Mexico’s economy minister expressed support for the U.S. in possible trade conflicts with China, as both nations vie for influence in Latin America through large-scale investment programs. While Brazil, the region’s largest economy, is considering joining China’s Belt and Road Initiative for economic benefits, U.S. officials warn that some Chinese infrastructure could have military applications. The U.S. Southern Command emphasized the need to address economic and national security concerns together in response to China’s expanding presence in Latin America.
WTO increases trade growth forecast for 2024 amid lower interest rates... The World Trade Organization (WTO) raised its forecast for global goods trade growth to 2.7% in 2024, up from its earlier prediction of 2.6%, attributing the increase to falling interest rates. However, WTO warns that potential disruptions, such as oil supply issues or new tariffs, could hinder future trade. The forecast for 2025 was cut to 3% from 3.3% previously, reflecting concerns about uneven global monetary policy. While trade is rebounding, geopolitical tensions and changing trade policies remain risks to long-term growth, particularly in Europe, where imports are expected to decline this year.
China makes no changes to corn, soybean balance sheets... China’s ag ministry kept its forecasts for corn and soybean production unchanged at 297.01 MMT and 20.54 MMT, respectively. The ministry also made no changes to its 2024-25 import forecasts, leaving corn at 13 MMT and soybeans at 94.6 MMT. Imports are projected to fall 10 MMT (43.5%) for corn and 7.69 MMT (7.5%) for soybeans this year.
China issues stronger guidelines for futures markets... China issued guidelines for strengthening the supervision of and preventing risks within its futures market, saying authorities would take steps to curb excessive speculation. The document also urged banks to strengthen credit management to prevent enterprises from using credit for speculative trading in commodities futures.
UK economy returns to growth in August... The British economy grew 0.2% from the previous month in August after showing no growth in both July and June. The production sector expanded 0.5%, rebounding from a 0.7% decline in July, led by a 1.1% jump in manufacturing. In the three-month period from June to August, the British economy also expanded 0.2%.
Capital gains tax policy faces uncertainty ahead of 2025 expiration of tax cuts... With the 2017 Tax Cuts and Jobs Act provisions set to expire after 2025, long-term capital gains tax rates are a key focus in upcoming political debates. Currently, long-term gains are taxed at 0%, 15% or 20%, based on income thresholds. Kamala Harris has proposed raising the top capital gains rate to 28% for incomes over $1 million and supports taxing unrealized gains at death. Donald Trump aims to make the 2017 tax cuts permanent and possibly lower the top capital gains rate to 15%, with potential indexing for inflation.
Farmers affected by drought given extended time for livestock gain deferral... Livestock operators in 41 states and D.C. now have more time to defer gains from sales due to severe drought. The IRS has extended the deferral period until the end of 2025 for farmers in drought-affected counties, allowing them to defer gain by purchasing replacement livestock. This extension applies even if the normal four-year deferral period has expired, according to IRS Notice 2024-70.
California confirms fourth human case of H5N1... California on Thursday confirmed a fourth case of the H5N1 virus in a person who had contact with infected dairy cattle. The four people who tested positive in California were exposed to infected cows at four separate farms, the California Department of Public Health said. Results are still awaited on two additional possible human cases of the virus.
Cash cattle trade steady/higher... Cash cattle trade got underway with $1.00 higher prices than week-ago in the Southern Plains, while the northern dressed market reported generally steady prices. Given the general strength of initial cash trade, some feedlots continue to hold out for even higher bids.
Pork margins solidly in the black... Pork packers are making money with margins solidly in the black, so it’s highly unlikely they’re intentionally slowing operations. And December futures certainly aren’t encouraging producers to hold back hogs. The implication of surprisingly tighter-than-expected supplies due to recent slaughter figures could translate into near-term support for cash prices.
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. Livestock and Poultry: World Markets and Trade — FAS
· 2:00 p.m. Peanut Prices — NASS
· 2:30 p.m. Commitments of Traders — CFTC