Good morning!
Corrective buying in grains overnight... Corn, soybeans and wheat rebounded amid modest corrective buying during the overnight session. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, while soybeans and wheat are 3 to 5 cents higher. Front-month crude oil futures are around 90 cents higher and the U.S. dollar index is modestly firmer.
Initial winter wheat conditions second lowest ever... USDA’s initial winter wheat conditions rated the crop 38% “good” to “excellent,” down nine points from last year and the second lowest on record behind two years ago. The amount of crop rated “poor” to “very poor” was 23%, up five points from last year. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop started the growing season with a 293.8 rating, down 24.9 points from last year and 22.8 points below the five-year average. The initial SRW CCI rating was 356.4, down 13.5 points from last year and 1.2 points below the five-year average. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of Oct. 27:
· Corn: 81% harvested (64% average).
· Soybeans: 89% harvested (78% average).
· Cotton: 33% good/excellent (37% last week); 97% bolls opening (94% average); 52% harvested (46% average).
· Winter wheat: 38 good/excellent (47% last year); 80% planted (84% average); 56% emerged (61% average).
Cordonnier keeps South America crop estimates unchanged... South American crop consultant Dr. Michael Cordonnier kept his Brazilian crop estimates at 165 MMT for soybeans and 125 MMT for corn as needed rains fell on central production areas with more expected this week. Cordonnier says the strong soybean planting progress over the past week, especially in Mato Grosso, means less safrinha corn will likely be planted after the ideal window. Cordonnier kept his Argentine crop estimates at 57 MMT for soybeans and 48 MMT for corn.
Ukraine’s winter grain seeding nearing completion but crops need rain... Ukrainian farmers had seeded 4.68 million hectares of winter grains for harvest next year as of Oct. 28, or 90.2% of the expected area of 5.19 million hectares, the agriculture ministry said. That included 4.13 million hectares of winter wheat, or 92.2% of the projected area, along with 486,100 hectares of winter barley and 66,000 hectares of rye. Ukraine’s state weather forecasters said last week that most of the country’s winter crop was under-developed due to drought.
Some grain handlers strike at Australian exporter GrainCorp... The Australian Workers’ Union (AWU) said GrainCorp handlers in New South Wales – one of the country’s biggest growing regions – would conduct impromptu hour-long strikes over the next 30 days with as little as 10 minutes warning. “We’ll be taking action at peak work periods, if a train comes in, if trucks line up,” said AWU official Tony Callinan. He said around 200 workers were taking part in the work stoppages due to pay raises being far below the rate of inflation during a period of healthy company profits. GrainCorp says the stoppages won’t impact exports but will slow down grain deliveries for farmers.
Indonesia considers importing additional rice from India... Indonesia is considering a plan to import 1 MMT of rice from India in 2025 to secure supply until its main harvest, Coordinating Minister for Food Affairs Zulkifli Hasan said after a meeting of food and agricultural officials. Indonesia’s rice output is estimated to fall 2.43% this year to 30.34 MMT due to a delay in planting and harvest season amid longer dry weather in 2023, the statistics bureau said earlier this month.
China considers over $1.4 trillion in extra debt over next few years... China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy, a fiscal package which is expected to be further bolstered if Donald Trump wins the U.S. election, two sources with knowledge of the matter told Reuters. China’s top legislative body is looking to approve the fresh fiscal package, including 6 trillion yuan which would partly be raised via special sovereign bonds, on the last day of a meeting to be held from Nov. 4-8, said the sources. The package includes 6 trillion yuan in debt to be raised from 2024-26 to help local authorities resolve off-balance-sheet debt, as well as 4 trillion yuan worth of bonds to fund regional governments’ purchases of idle land and properties over the next five years.
Choice beef continues to strengthen... Wholesale beef prices were widely mixed on Monday, as Choice firmed another $1.26 to $323.50 while Select dropped $2.90 to $292.18. That widened the Choice/Select spread to $31.32. Movement remained strong at 156 loads, including 60.9 boxes of Choice beef.
Cash hog fundamentals extend contra-seasonal strength... The CME lean hog index is up another 12 cents to $85.55 as of Oct. 25, the seventh straight daily gain. During that span, the index has firmed $1.69. December lean hog futures finished Monday $4.925 below today’s cash quote. The pork cutout jumped $3.01 on Monday to $101.95 amid strong gains in all cuts.
Overnight demand news... South Korea purchased 136,000 MT of corn to be sourced from the U.S., South America or South Africa.
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
· 2:00 p.m. Livestock and Meat Domestic Data — ERS