Good morning!
Corn and beans weaker, wheat mixed to open the week... Corn and soybeans faced light followthrough selling after last Friday’s losses during the overnight session, while wheat has turned mixed early this morning. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are mostly 6 cents lower, winter wheat markets are steady to a penny higher and spring wheat is steady to a penny lower. Front-month crude oil futures are around $4.25 lower and the U.S. dollar index is modestly weaker.
Oil prices drop as Israel avoids striking Iran’s oil facilities... Oil prices fell sharply after Israel’s weekend attacks on Iran avoided targeting key oil and nuclear infrastructure. Iran’s measured response, signaling no immediate retaliation, helped ease fears of regional supply disruption. The U.S. had urged Israel to avoid key Iranian sites to prevent further escalation. Analysts suggest that market attention is shifting from geopolitical risks to concerns over potential oversupply in 2025, with OPEC nations expected to unwind production cuts by year-end.
Weather improving in central Brazil... Rain fell across center-west and center-south Brazil during the weekend and more rainfall through these areas is expected over the next two weeks. Southern Brazil and Argentina will be dry through Thursday, followed by increasing rainfall chances for late this week through next week.
The week ahead in Washington... Election-year politics is clearly the focus in Washington with Nov. 5 elections deciding the fate of the White House, House and Senate. Polls suggest a tight race for the presidency and the House, with most expecting a GOP takeover of the Senate. Key economic data this week includes the advance estimate of U.S. third quarter GDP on Wednesday, the personal consumption expenditures price index — the Fed’s favored inflation gauge — on Thursday and the October employment report on Friday. Agricultural reports are highlighted by USDA’s soy and grain crush data for September on Friday.
China’s September industrial profits plunge... China’s industrial profits plunged 27.1% from a year earlier in September, the steepest fall of the year. Industrial profits dropped 3.5% to 5,228.16 billion yuan during the first nine months of the year, reflecting an uncertain economic recovery due to persistent weak demand, deflation risks and a property downturn.
China again warns EU against separate talks with EV makers... China renewed warnings to the European Union that if the bloc conducts separate negotiations with electric vehicle (EV) companies while in talks with China, that would “shake mutual trust” and interfere with the overall negotiations, Chinese commerce ministry said. This reiteration from warnings earlier this month comes days after China and the EU agreed to hold further technical negotiations on possible alternatives to tariffs on Chinese EVs.
China launches new lending tool to add liquidity before year-end loan expiry... The People’s Bank of China (PBOC) launched a new lending tool on Monday to inject more liquidity into the market and support credit flow in the banking system ahead of the expiration of trillions of yuan in loans at the end of the year. PBOC activated the open market outright reverse repo operations facility to “maintain a reasonable abundance of liquidity in the banking system and further enrich the central bank’s policy toolbox.” Some 2.9 trillion yuan ($406.6 billion) in medium-term loans are due to mature between now and the end of December, which would make it harder for banks to finance investment and revive flagging growth in the world’s second-largest economy. PBOC will also conduct outright reverse repurchase agreements with primary dealers monthly for a timeframe of no more than a year.
McDonald’s rules out beef patties as source of E. coli outbreak... McDonald’s on Sunday ruled out beef patties as a source of the E. coli outbreak linked to Quarter Pounder hamburgers. The Colorado Department of Agriculture said that all subsamples from multiple lots of McDonald’s brand fresh and frozen beef patties had tested negative for E. coli, adding that it had completed beef testing and does not anticipate receiving further samples. FDA continues to believe that slivered onions from a single supplier are the probable source of contamination. McDonald’s said it would resume distribution of fresh supplies of the Quarter Pounder without slivered onions.
Iowa euthanizes 1.3 million chickens following Pure Prairie Poultry bankruptcy... The Iowa Department of Agriculture has euthanized approximately 1.3 million chickens that it had taken custody of following the bankruptcy of Pure Prairie Poultry. This drastic action came after the state failed to find buyers for the birds, largely due to creditors’ claims on the broilers. The situation unfolded when Pure Prairie Poultry, an Iowa-based poultry processor, filed for Chapter 11 bankruptcy in late September.
USDA warns of illegally imported meat in multi-state health alert... USDA’s Food Safety and Inspection Service (FSIS) issued a health alert concerning meat and poultry products illegally imported and sold in several U.S. states without official inspection marks. The affected products, found in Arizona, California, Iowa, Kansas, Maryland, Minnesota, Nebraska, Oklahoma and Texas, include items such as “BEST Beef Curry” and “Eain Chak Coconut Soup Paste.” While no illnesses have been reported, consumers are urged to discard or return the products. The investigation is ongoing as FSIS emphasizes the public risk posed by uninspected imports. Of note: FSIS does not refer to the products as coming from Myanmar (Burma). However, it does note that you can view the labels in Burmese.
Neutral Cattle on Feed Report... USDA estimated there were 11.600 million head of cattle in large feedlots (1,000-plus head) as of Oct. 1, virtually unchanged from last year. August placements declined 1.9%, while marketings rose 2.0% from year-ago levels in September. The feedlot inventory and placements numbers were a little heavier than the average pre-report guesses, but not enough to have much if any market impact.
Mildly negative meat stocks data... USDA’s Cold Storage Report showed beef stocks totaled 413.8 million lbs. at the end of September, up 25.2 million lbs., whereas the five-year average was a 15.1-million-lb. increase for the month. Beef inventories declined 7.1 million lbs. (1.7%) from year-ago and were 49.9 million lbs. (10.8%) below the five-year average. Pork stocks increased 4.9 million lbs. during September to 460.1 million lbs., whereas the five-year average was a nearly 1-million-lb. decline during the month. Pork stocks declined 1.5 million lbs. (0.3%) from last year and were 46.5 million lbs. (10.1%) below the five-year average.
Wholesale beef rally may not be done yet... Wholesale beef firmed on Friday after losses earlier last week hinted the strong price rally may be running out of steam. Choice beef firmed $1.07 to $322.24 while Select rose 74 cents to $295.08. Due to the wholesale beef strength, packer cutting margins remain solidly in the black, despite cash cattle prices rising for seven consecutive weeks.
Cash hog fundamentals continue to strengthen... The CME lean hog index is up another 22 cents to $85.43 as of Oct. 24, the sixth consecutive daily gain. The pork cutout value firmed 79 cents on Friday to $98.94.
Weekend demand news... 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
· 10:00 a.m. Weekly Export Inspections — AMS
· 3:00 p.m. Crop Progress — NASS