Good morning!
Corn and beans mildly firmer, wheat mixed overnight... Corn, soybean and spring wheat futures posted mild corrective gains overnight, while the winter wheat markets faced light followthrough selling. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are 4 to 6 cents higher, winter wheat markets are 1 to 3 cents lower and spring wheat is steady to 3 cents higher. The U.S. dollar index is modestly firmer and front-month crude oil futures are mildly weaker this morning.
USDA announces $233 million in indemnity payments for farmers impacted by Hurricane Helene... The payments, issued under the Hurricane Insurance Protection-Wind Index (HIP-WI) and Tropical Storm (TS) endorsements, will help producers across several southeastern states recover from significant hurricane-related losses. Producers do not need to file a claim to receive an indemnity payment under HIP-WI. If a county is triggered, AIP will issue an indemnity payment in the coming weeks. This marks part of a broader $630 million in aid paid out in 2024 for multiple hurricanes. USDA also deployed response teams to impacted states to support recovery efforts.
Study warns of major risks to U.S. farmers from potential U.S./China trade war... A recent economic study commissioned by the American Soybean Association (ASA) and the National Corn Growers Association (NCGA) highlights the potential negative consequences of a renewed U.S./China trade war on American farmers and rural communities. The study, conducted by the World Agricultural Economic and Environmental Services, reveals that American-imposed tariffs could significantly harm U.S. producers while benefiting competitors like Brazil and Argentina. The study predicts an immediate and substantial drop in corn and soybean exports to China if a new trade war were to occur. Specifically: Soybean exports to China could fall by 14 MMT to 16 MMT annually, representing a 51.8% average decline from expected baseline levels. Corn exports to China could decrease by about 2.2 MMT annually, an 84.3% average decline from baseline expectations. The potential trade war would lead to a steep drop in soy and corn prices, causing a ripple effect across rural economies where farmers live, purchase inputs, use services, and buy household goods. Leaders at NCGA and ASA believe maintaining a trading relationship with China is in America’s economic interests, even as both governments work through trade and other concerns. The research underscores the importance of thoughtful consideration regarding the impacts of tariffs and tariff retaliation on U.S. farms and rural communities, as the potential consequences could be far-reaching and long-lasting.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of Oct. 13:
· Corn: 64% good/excellent (64% last week); 94% mature (89% average); 47% harvested (39% average).
· Soybeans: 95% dropping leaves (92% average); 67% harvested (51% average).
· Cotton: 34% good/excellent (29% last week); 88% bolls opening (86% average); 34% harvested (30% average).
· Winter wheat: 64% planted (66% average); 35% emerged (38% average).
Russia’s winter wheat regions to receive much-needed rain... Russia’s Volga River Basin and the USDA-defined “Southern Region” will receive much-needed precipitation during the coming week that will likely promote aggressive late-season planting of winter wheat. World Weather Inc. notes that much more moisture will be needed to fix the moisture deficits and planted acreage may remain lower than usual. World Weather also notes portions of eastern Ukraine may remain too dry to support favorable late-season planting.
Russia’s Grain Exporters Union starts publishing indicative prices for wheat exports... Russia’s Grain Exporters Union began publishing indicative export prices for Russian wheat on Tuesday, following discussions on exports during a meeting between agriculture ministry officials and leading exporters last week. The union said the indicative export price for wheat with 12.5% protein content on a free-on-board (FOB) basis from the Black Sea port of Novorossiysk was $240 per metric ton for October, $245 for November and $250 for December. “The members of the union agreed to calculate and provide the market with price guidelines based on our understanding of fair export quotations, taking into account rising production costs, high interest rates and payment delays,” the union’s head told Reuters. It will be up to individual exporters to decide whether to follow the guidance provided by the published prices.
Ukraine’s grain, oilseed exports jump in early October... Ukraine’s grain and oilseed exports jumped to 2.71 MMT in Oct. 1-15 from 1.99 MMT during the first half of last month, mostly due to higher corn shipments, Ukrainian traders union UGA said. First-half October exports included 862,000 MT of corn, 921,000 MT of wheat, 307,000 MT of barley, 308,000 MT of soybeans and 293,000 MT of rapeseed.
France cuts wheat export forecast within EU... France’s ag ministry kept its 2024-25 wheat export forecast outside of the EU at 4 MMT, 61% below last year. It cut the forecast within the bloc by 100,000 MT to 6 MMT, 5.8% below year-ago.
Summit seeks dismissal of federal suit over carbon pipeline... Summit Carbon Solutions urged the U.S. District Court for the Northern District of Iowa to dismiss a federal legal challenge to its carbon capture pipeline, arguing the case belongs in state courts. Plaintiffs filed suits in both state and federal courts, contesting the Iowa Utilities Commission’s approval of the pipeline. They claim compensation for eminent domain is insufficient for potential damages and criticize easement terms allowing route modifications without further compensation. Summit argued that questions about state law violations should be resolved by state courts.
Strong bank profits boost optimism for U.S. soft landing... Quarterly profits at major American banks have fueled optimism the U.S. economy is on track for a soft landing. Executives from JPMorgan Chase and Bank of America highlighted robust consumer spending, defying concerns over inflation and high household debt. Goldman Sachs, despite a slowdown in corporate mergers, reported $3 billion in third-quarter profits. A Goldman executive noted the global economy is trending above average. A recent fund manager survey also showed increased optimism, with investors shifting from bonds to stocks, signaling bullish sentiment.
UK consumer inflation plunges in September... British consumer inflation plunged to 1.7% above year-ago in September, the lowest since April 2021. Core inflation, minus food, energy, alcohol and tobacco prices, dropped to 3.2%, the lowest since September 2021.
Wholesale beef prices remain strong... Wholesale beef prices jumped $3.51 for Choice to $316.83 and $2.99 for Select to $292.09 on Tuesday, while movement totaled 136 loads. Given the strength in wholesale prices, especially for Choice beef, packer cutting margins have improved and are in the black despite the five-week string of higher cash cattle prices.
Pork movement surges... The pork cutout fell 57 cents to $94.40 on Tuesday as all cuts except ribs and bellies weakened. But the drop in price spurred a strong pickup in retailer demand as movement surged to 416.4 loads.
Overnight demand news... Japan purchased 700 MT of milling wheat and 220 MT of feed barley. Egypt purchased 50,000 MT of sunflower oil from unspecified origins and passed on a tender to buy soyoil.
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. Cotton and Wool Outlook: October 2024 — ERS
· 11:00 a.m. Oil Crops Outlook: October 2024 — ERS
· 2:00 p.m. Feed Outlook: October 2024 — ERS
· 2:00 p.m. Rice Outlook: October 2024 — ERS
· 2:00 p.m. Wheat Outlook: October 2024 — ERS
· 2:00 p.m. Broiler Hatchery — NASS
· 2:00 p.m. Turkey Hatchery — NASS