Good morning!
Grains modestly firmer awaiting USDA reports... Corn, soybean and wheat futures were relatively quiet during the overnight session as traders await USDA’s October crop reports later this morning. As of 6:30 a.m. CT, corn futures are trading fractionally higher, soybeans are 4 to 5 cents higher, winter wheat futures are 1 to 2 cents higher and spring wheat is mostly 3 to 4 cents higher. Front-month crude oil futures are around 80 cents higher and the U.S. dollar index is about 100 points lower.
October crop reports out later this morning... USDA will release its Crop Production and Supply & Demand Reports at 11:00 a.m. CT. USDA’s 2023-24 domestic balance sheets will reflect Sept. 1 stocks and the final 2023 wheat crop estimate, along with any changes to this year’s corn and soybean crop forecasts. Key will be what USDA does with its new-crop usage projections to account for the supply changes. Traders expect USDA to trim its production estimates to 15.101 billion bu. for corn and 4.134 billion bu. for soybeans. New-crop ending stocks are expected to come in at 2.138 billion bu. for corn (2.221 billion bu. in September), 233 million bu. for soybeans (220 million bu. in September) and 647 million bu. for wheat (615 million bu. in September).
Israel launches fresh airstrikes on Gaza... In an escalation of the ongoing conflict, Israel conducted new airstrikes in Gaza, with Israeli leaders vowing to “obliterate” Hamas, the militant organization in control of the Gaza Strip. The crisis deepened on Wednesday when electricity was cut off in Gaza. Israel has maintained a blockade on the region, limiting its access to essential external fuel supplies. Markets have not reacted strongly to the crisis as traders are presently not factoring in an escalation of the conflict, meaning they don’t expect other countries like Iran, Syria or the U.S. to become actively involved. If that happens, market impacts would become greater.
China raises corn crop estimate... China’s ag ministry raised its 2023 corn production forecast by 3.29 MMT to a record 288.23 MMT, which would be up 11.03 MMT from last year. Despite the bigger production estimate, the ministry left its 2023-24 corn import forecast at 17.5 MMT.
Exchange cuts Argentine wheat crop estimate, raises soybean outlook... The Rosario Grain Exchange cut its 2023-24 Argentine wheat crop estimate by 700,000 MT to 14.3 MMT. The exchange raised the outlook for the country’s soybean crop by 2 MMT to 50 MMT.
Russia attacks Ukrainian grain storage... A Russian drone strike hit a grain storage facility at a port in the southern Ukrainian region of Odesa overnight, damaging some of the stored grain. Ukrainian officials didn’t disclose how much grain was damaged.
Strategie Grains raises EU wheat, corn crop estimates... Consultancy Strategie Grains raised its EU wheat production estimate by 600,000 MT to 125.6 MMT, which would be marginally higher than last year’s crop and above the five-year average. The firm raised its 2023 EU corn production estimate by 1 MMT to 60.6 MMT, which would be 8.2 MMT above last year.
Export sales data pushed back to Friday... Due to Monday’s government holiday, export sales data for the week ended Oct. 5 will be released Friday morning.
Scalise chosen as GOP House Speaker nominee but faces uphill battle... Rep. Steve Scalise’s (R-La.) victorious moment as the GOP nominee for House Speaker was swiftly followed by significant challenges. To secure the position, Scalise must garner a total of 217 votes on the House floor. Several Republican lawmakers have expressed hesitations and stated they would not back his candidacy unless certain concessions are made.
IEA cuts global oil demand growth forecast... The International Energy Agency (IEA) lowered its oil demand growth forecast for 2024, suggesting harsher global economic conditions, progress on energy efficiency and electric vehicle adoption will weigh on consumption. The Paris-based agency revised its demand growth forecast to 880,000 barrels per day (bpd) for next year, from its previous projection of 1 million bpd growth. However, it raised the 2023 demand forecast to 2.3 million bpd from 2.2 million bpd previously, due to higher consumption in China, India and Brazil.
Russia reimposes capital controls to stabilize the faltering ruble... This measure requires 43 of the nation’s largest exporters, including major oil producers, to exchange their foreign-currency earnings for rubles on the domestic market. The Russian ruble has experienced significant devaluation and stands as one of the world’s poorest-performing currencies this year, prompting the Bank of Russia to respond by increasing interest rates.
Bird flu discovered at Minnesota turkey farm... Minnesota’s first case of highly pathogenic avian influenza (HPAI) was discovered on a turkey farm in Meeker County, state officials announced Wednesday. USDA reported HPAI outbreaks last week at commercial turkey farms in South Dakota and Utah, and a backyard poultry flock in Montana.
Limited cash cattle trade... As expected, this week’s cash cattle trade has been slow to get started. So far, only light sales at roughly steady prices have been reported in the far northern market. Cash sources are spilt on eventual prices for the week, with some thinking steady/firmer and others steady/weaker.
Cash hog index halts extended price drop... The CME lean hog index is up 14 cents to $82.40 (as of Oct. 10), marking the first increase since Sept. 20. Still, the index remains in a steep seasonal decline and is down $10.55 from this time last year.
Overnight demand news... South Korea purchased 65,000 MT of optional origin corn. Japan purchased 90,640 MT of milling wheat in its weekly tender, including 23,120 MT U.S., 34,480 MT Canadian and 33,030 MT Australian. Egypt tendered for an unspecified amount of whet from multiple origins. Tunisia tendered to buy 75,000 MT of optional origin durum 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Meat Price Spreads — ERS
- 11:00 a.m. Cotton Ginnings — NASS
- 11:00 a.m. Crop Production — NASS
- 11:00 a.m. WASDE — WAOB
- 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