Good morning!
Corn and beans firmer, wheat mixed this morning... Corn and soybean futures mildly extended Thursday’s corrective gains during overnight trade, while wheat pivoted around unchanged. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are 4 to 5 cents higher, SRW wheat is narrowly mixed, while HRW and HRS wheat are mostly a penny higher. The U.S. dollar index is nearly 200 points lower and front-month crude oil futures are around 25 cents lower.
Weekly Export Sales Report out this morning... For the week ended Nov. 10, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) |
Corn | 1,200,000-2,200,000 | 1,222,066 |
Wheat | 250,000-550,000 | 433,560 |
Soybeans | 1,000,000-2,200,000 | 1,264,320 |
Soymeal | 150,000-350,000 | 165,717 |
Soyoil | 0-20,000 | 3,821 |
Dry conditions trim Aussie wheat production in southern areas... Persistent dry weather in southern regions of Australia that suffered frost damage last month is lowering wheat yield potential but the country could still produce an above-average harvest due to favorable weather in other areas. South Australia is set to produce 2.8 MMT of wheat and Victoria 3.6 MMT this year, Commonwealth Bank analyst Dennis Voznesenski told Reuters, down from the five-year averages of 4.7 MMT and 4.6 MMT, respectively. Still, overall Australian production should come in around 30.6 MMT due to expected large harvests in Western Australia, New South Wales and Queensland, where conditions have been better, Voznesenski said.
Russia to push for dollar alternatives at BRICS summit... At the BRICS summit in Kazan from Oct. 22-24, Reuters reports Russia will advocate for a new international payment system to bypass U.S. dollar dominance and avoid Western sanctions. Russian President Vladimir Putin aims to strengthen BRICS, now expanded to include Egypt, Ethiopia, Iran, and the UAE, as well as Brazil, Russia, India, China and South Africa, as a geopolitical counterweight to the West. Moscow’s proposal includes a blockchain-based payments network backed by national currencies, a grain trading exchange and a new “BRICS Clear” platform for settling securities trade. The proposal envisages the extension of BRICS grain trading mechanisms to oil, natural gas and gold in the future. While these initiatives reflect Russia’s push for financial independence, consensus among the expanded membership may be challenging.
China’s Q3 GDP lowest since early 2023... China’s economy expanded 4.6% annually in the third quarter, slowing from 4.7% growth during the previous three-month period and the lowest since the first quarter of 2023. In the first three quarters of the year, the economy grew by 4.8%, below China’s full-year target of around 5%.
China’s industrial production, retail sales improve but housing slump continues... China’s industrial production grew by 5.4% annually in September, accelerating from August’s five-month low of 4.5%. It was the fastest expansion in industrial output since May. For the first three quarters of the year, factory output rose 5.8% from year-ago. China’s retail sales climbed by 3.2% from year-ago in September from 2.1% gain the previous month. During the first three quarters of the year, retail sales expanded 3.3%. China’s new home prices fell 5.8% from last year in September, the fastest decline since May 2015. For the first three quarters, new home prices plunged 22.7%. Property investment in China fell 10.1% in the first nine months of this year.
China rolls out funding schemes to bolster stock market... The People’s Bank of China (PBOC) kicked off two funding schemes on Friday that will initially pump as much as 800 billion yuan ($112.38 billion) into the stock market through newly-created monetary policy tools, providing details of the swap and relending schemes first announced in late September. Under the swap scheme, initially worth 500 billion yuan, brokerages, asset managers and insurers can obtain liquidity from the central bank through asset collateralization to buy stocks. In addition, institutions can use the tool to access liquidity in a stock market rout without having to sell shares in a downward spiral. Currently, 20 companies have been approved to participate in the scheme and initial applications have exceeded 200 billion yuan, PBOC said. The central bank also launched a relending program, initially worth 300 billion yuan, that would allow financial institutions to borrow from PBOC to fund share purchases by listed companies or their major shareholders. The one-year interest rate for relending is set at 1.75%, and 21 eligible financial institutions, including policy and commercial banks, can apply for the loans at the start of each quarter, PBOC said.
PBOC head signals more monetary policy easing... PBOC governor said on Friday the reserve requirement ratio for commercial lenders could be cut further by 25 to 50 basis points by the year-end depending on liquidity conditions, keeping the door open to more policy easing steps. The benchmark seven-day reverse repurchase rate has been lowered by 20 basis points and the medium-term lending facility rate has been reduced by 30 basis points, he noted. On Oct. 21, the Loan Prime Rate (LPR) will decrease by 20 to 25 basis points, the official Xinhua news agency quoted the official as saying.
China weighs higher tariffs on car imports amid EU trade tensions... China is considering raising tariffs on imported large-engine, fuel-powered vehicles following the European Union’s decision to impose new tariffs of up to 45% on China-made electric vehicles (EVs). China’s ministry of commerce confirmed it is evaluating the measures and has invited EU officials for further negotiations. Analysts suggest that if implemented, the higher tariffs would primarily affect German automakers due to their export volumes to China. While the move is seen as partly political, a drop in Chinese car imports has already reduced its potential impact. The ongoing trade tensions come as the U.S. and Canada also maintain 100% tariffs on Chinese EVs.
China’s pork imports plunge in September amid falling consumer demand... China imported 100,000 MT of pork during September, half of the volume from August and 1.4% less than last year. Through the first nine months of this year, China imported 800,000 MT of pork, 37.3% less than the same period last year. Meanwhile, China’s pork production slipped 0.8% in the third quarter to 12.59 MMT, falling on an annual basis for a third consecutive quarter as poor meat consumption hampered slaughter rates. For the first nine months of the year, pork production fell 1.4% to 42.4 MMT. Meat demand has slowed in China, with shoppers tightening their belts to cope with a sluggish economy. Farmers slaughtered 520.3 million hogs during the first nine months of the year, down 3.2% from a year earlier. China’s pig herd at the end of September was down 3.5% from the previous year to 426.94 million head.
Cash cattle trade steady/higher... Cash cattle started trading at steady to $1.00 higher prices on Thursday, with the strongest bids in the Southern Plains. While some feedlots opted to hold out for even better prices, sales were relatively active.
Cash hog index slips, pork cutout firms... The CME lean hog index is down a penny to $83.84 as of Oct. 16. The pork cutout firmed $1.56 on Thursday to $96.41 as all cuts except ribs strengthened.
Overnight demand news... Taiwan purchased 65,000 MT of corn expected to be sourced from Brazil.
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
· 2:00 p.m. Livestock, Dairy, and Poultry Outlook: October 2024 — ERS
· 2:00 p.m. Sugar and Sweeteners Outlook: October 2024 — ERS
· 2:00 p.m. Peanut Prices — NASS