Good morning!
Followthrough selling in grains overnight... Corn, soybeans and wheat extended recent losses during the overnight session. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 6 to 7 cents lower and wheat futures are 1 to 3 cents lower. Front-month crude oil futures are more than $3.00 lower and the U.S. dollar index is around 135 points lower.
Record September NOPA soy crush expected... Analysts expect the National Oilseed Processors Association (NOPA) to report its members crushed 170.3 million bu. of soybeans in September, which would be up 7.8% from August and 2.9% above last year’s record for the month. Soyoil stocks held by NOPA members as of Sept. 30 were estimated at 1.083 billion lbs., down 4.9% from August and the smallest end-of-month supply since December 2014.
Train derailment causes temporary halt to U.S. grain movement to Mexico... Mexican rail consortium Ferromex and U.S. railroad company Union Pacific Corp said they have stopped issuing permits for some grain rail shipments moving through Eagle Pass, Texas, after a recent train derailment in Mexico closed the track. The halt is a temporary measure until rail traffic gets cleared after the track reopened, Ferromex told Reuters. Total volume of grain movement between Union Pacific and Ferromex will not be affected.
Mexico’s new president reaffirms ban on GMO white corn... Mexican President Claudia Sheinbaum has reaffirmed the country’s ban on the planting and consumption of genetically modified (GMO) white corn, emphasizing the commitment to food sovereignty. Mexican Secretary of Agriculture Julio Berdegué Sacristán reiterated that no transgenic white corn will be produced or consumed in Mexico. This stance challenges U.S. trade policies under the U.S.-Mexico-Canada Agreement, with the U.S. having filed a case against Mexico’s policy. Mexico aims to be self-sufficient in white corn, beans and other crops while promoting fair trade for agricultural products. Sheinbaum made the comments in her Oct. 1 inaugural speech.
France trims wheat crop estimate... France’s ag ministry trimmed its wheat crop estimate to 25.43 MMT, down 350,000 MT from last month. That’s the smallest output since 1986 as repeated heavy rains throughout the growing season reduced plantings and crop development.
Turkey relaxes wheat import rules... Turkey relaxed its wheat import rules ahead of the scheduled expiry of a ban. In June, Turkey banned wheat imports until Oct. 15 to protect farmers from low prices, promote domestic procurement of grains by the Turkish state grain board (TMO). The head of the Turkish Flour Industrialists’ Federation told Reuters, “Wheat imports have been allowed for millers and product exporters, with 85% of purchases to be made from grain board stocks and after purchase is fulfilled, the remaining 15% through private imports.” These new rules are expected to extend until the end of the year.
China may raise $850 billion in new debt over three years to spur growth... China is considering allowing local authorities to issue as much as 6 trillion yuan ($853 billion) in bonds through 2027 mainly to refinance their off-balance-sheet debt, Caixin Global reported. The report, which cited sources with knowledge of the matter, comes after Finance Minister Lan Foan on Saturday said Beijing will “significantly increase” debt, although the absence of details on the size and timing of the fiscal measures disappointed some investors. The size of the expected fiscal package has been the subject of intense speculation.
China banks to trim deposit rates as early as this week... Chinese banks are set to cut rates on 300 trillion yuan ($42.20 trillion) of deposits as soon as this week, Bloomberg reported, citing people familiar with the matter. Major banks including Industrial & Commercial Bank of China and China Construction Bank Corp will be guided by the central bank’s interest rate self-disciplinary mechanism to lower the rates on a number of deposit products. Rates on one-year time deposits may drop by at least 20 basis points, while those on longer tenors may come down at least 25 basis points.
IEA again cuts 2024 oil demand growth forecast amid China slowdown... The International Energy Agency (IEA) further cut its global oil demand growth forecast for this year, citing weakness in China and said the market was heading for a sizeable surplus in 2025 in the absence of a major supply disruption. IEA now forecasts 2024 global oil demand growth at 860,000 barrels per day (bpd), down from 900,000 bpd previously. But IEA raised its 2025 world oil demand growth forecast to 1 million bpd from 950,000 bpd last month.
OPEC lowers global oil demand growth forecasts for third straight month amid slowing fuel use... OPEC cut its global oil demand growth forecast for 2024 by 106,000 barrels per day, marking the third consecutive downgrade as fuel consumption slows. The group now expects a 1.9 million barrel-per-day increase in demand next year. Despite the reductions, OPEC’s estimates remain higher than those of IEA. Meanwhile, Iraq reduced its production significantly, though it still exceeds its agreed quota, and other members like Kazakhstan and Russia continue to struggle with compliance. OPEC+ will meet in December to review its output strategy for 2025.
California reports five more possible human H5N1 cases... California is investigating five possible human cases of the H5N1 virus among dairy farm workers, in addition to the six cases previously confirmed in the state. The possible and confirmed cases originated on nine different dairy farms and the individuals had mild symptoms and were not hospitalized, the state said.
China’s meat imports remain weak... China imported 541,000 MT of meat during September, down 24,000 MT (4.2%) from August and 54,000 MT (9.1%) less than last year. Through the first nine months of the year, China imported 4.94 MMT of meat products, down 770,000 MT (13.5%) from the same period last year.
Cash cattle rally continues, but short-term top likely close... Cash cattle averaged $187.21 last week, up 32 cents and the fifth consecutive weekly gain. During that span, cash cattle prices have firmed $6.03. Wholesale beef prices firmed Monday, with Choice up $2.10 to $313.32 while Select rose 38 cents to $289.10. Some packer margins are back in the black, but after the recent string of purchases, including last week’s tally that was the highest since June, a short-term top in the cash market is likely close.
Cash hog index slides... The CME lean hog index is down 13 cents to $84.16 as of Oct. 11. After sharp losses on Monday, December hogs held an $8.36 discount to today’s cash quote, suggesting traders sense the cash index will drop about an average of $1.00 per week through mid-December.
Overnight demand news... Jordan made no purchases in its tender to buy up to 120,000 MT of optional origin milling wheat; a new tender is expected to be issued.
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
· 10:00 a.m. Weekly Export Inspections — AMS
· 11:00 a.m. Monthly Soybean Crush — NOPA
· 11:00 a.m. Feed Grains Database — ERS
· 2:00 p.m. Dairy Monthly Tables — ERS
· 2:00 p.m. Season Average Price Forecasts — ERS
· 2:00 p.m. Wheat data — ERS
· 3:00 p.m. Crop Progress — NASS