Good morning!
Grains mostly weaker overnight... Corn, soybeans and the winter wheat markets favored the downside during overnight trade. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are 6 to 7 cents lower, winter wheat markets are 2 to 3 cents lower and spring wheat is narrowly mixed. Front-month crude oil futures are around $1.00 higher and the U.S. dollar index is nearly 200 points higher.
Day 3 of East Coast, Gulf port strike... President Joe Biden called on U.S. port employers to resume negotiations with striking dock workers, warning the strike along the East Coast and Gulf could exacerbate the economic fallout from Hurricane Helene. Biden criticized port employers for delaying talks, calling for a swift resolution to avoid further economic disruption. The strike is expected to have significant impacts on supply chains and the broader economy, according to recent assessments by Moody’s and other experts. Moody’s believes the strike will “snarl supply chains” and have negative credit implications for retail and consumer goods sectors. The affected ports handle more than half of U.S. container imports. Experts warn that if the strike persists beyond a couple of weeks, it could lead to significant supply chain shocks. This may result in shortages of various products, including perishable goods, auto parts and other consumer items.
Israel hits Beirut as world awaits its response against Iran... Israel’s warplanes bombed Beirut overnight after eight of its soldiers were killed in southern Lebanon in ongoing ground battles against Hezbollah. President Biden called on Israel to avoid attacking Iran’s nuclear facilities in response to recent missile strikes, as the G7 seeks to prevent further escalation in the region. World leaders are concerned that, should Israel strike key Iranian assets, the Islamic Republic will lash out and escalate the conflict, dragging in more countries.
Weekly Export Sales Report out this morning... For the week ended Sept. 26, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | NA | NA | 600,000-1,000,000 | 535,056 |
Wheat | NA | NA | 150,000-400,000 | 158,938 |
Soybeans | NA | NA | 1,000,000-1,600,000 | 1,574,721 |
Soymeal | (50,000)-60,000 | (7,944) | 140,000-350,000 | 279,928 |
Soyoil | 0-40,000 | 935 | 0-50,000 | 3,489 |
Union Pacific says FXE issuing some U.S./Mexico grain shuttle permits... Union Pacific Corp said Ferromex (FXE), the Mexican railroad it interchanges with, has resumed issuing permits for grain shuttle trains at the U.S./Mexico border crossing at Eagle Pass, Texas. Earlier this week, BNSF Railway said it had resumed issuing permits for grain shuttles heading to Mexico. Grain shuttle train traffic between the U.S. and Mexico has been snarled in recent months as booming demand outstripped the system’s capacity, creating heavy congestion and a growing backlog of loaded train.
Kazakhstan grain shipments to Russia not halted... Kazakh grain exports to Russia have been not been halted, the state railway company said. Russia said earlier this week it has effectively banned the import and transit of Kazakh grain on phytosanitary grounds. Kazakhstan relies on transit through Russian territory to sell its grain in Europe and the Mediterranean. In the absence of phytosanitary certificates, goods cannot legally cross the border.
Johnson estimates $35 billion needed for Hurricane Helene relief, urges prioritizing federal spending... House Speaker Mike Johnson (R-La.) emphasized the need to prioritize federal spending amid the $35 trillion national debt. Congress has already allocated $20 billion for FEMA in a recent stopgap bill, but additional relief measures may take time. Johnson rejected calls from some lawmakers from hurricane-ravaged states for Congress to return early from a break running through the Nov. 5 election in order to pass a relief measure. Johnson said Wednesday that officials would need “30 days or more” to finish assessing the damage from the storm before Congress acts. He called for bipartisan cooperation but hinted at concerns over national debt, raising questions about potential offsets for disaster aid. Senators from impacted states are pushing for immediate disaster relief legislation.
USDA announces up to $7.7 billion in funding for conservation practices on working lands in FY 2025... The funding will include $5.7 billion from the Inflation Reduction Act for climate-smart initiatives and $2 billion from the 2018 Farm Bill. The funds will support programs like the Environmental Quality Incentives Program and the Conservation Stewardship Program. These efforts have already assisted over 28,500 farmers, applying conservation measures to 361 million acres since 2023.
New tool to simplify GMO regulatory process for biotech companies... The U.S. Food and Drug Administration (FDA), Environmental Protection Agency (EPA) and USDA launched a new web-based tool to help biotechnology companies better understand and navigate the regulatory requirements for genetically modified organisms (GMOs). This tool is part of a broader effort to modernize and streamline the regulatory framework for biotechnology products in the United States. Link to the new tool.
Euro zone business activity contracted in September... HCOB’s composite purchasing managers index compiled by S&P Global dropped to 49.6 in September, the first contraction since February but above the preliminary reading of 48.9. Services slowed and the manufacturing contraction deepened as demand for euro area goods and services fell at the quickest pace in eight months, leading to backlog reductions and a slightly faster rate of job cutting. Business confidence also weakened fractionally, taking it further beneath its long-run average. Meanwhile, the three biggest economies in the euro zone – Germany, France and Italy – recorded contractions simultaneously for the first time in 2024.
Iowa AG leads 22-state coalition to challenge Massachusetts pork law (Q3) in appeal... lowa Attorney General Brenna Bird led a coalition of 22 states in filing an amicus brief to support an appeal against a district court ruling that upheld Massachusetts’ Question 3 (Q3) law. Question 3 is a Massachusetts law approved by voters in 2016 that sets minimum size requirements for farm animal containment. Similar to California’s Proposition 12, Q3 prohibits the sale of pork from hogs born to sows housed in pens that don’t comply with Massachusetts’ standards. However, Q3 goes a step further by also banning the transportation of non-compliant pork through Massachusetts. The coalition of states argues several points against Q3: 1) They contend Massachusetts is overstepping its authority by effectively regulating farming practices in other states; 2) The attorneys general claim Q3 poses “crippling costs” for farmers and could lead to “skyrocketing prices” for consumers; 3) The ban on transporting non-compliant pork through Massachusetts is seen as a potential disruption to interstate commerce; 4) Bird argues that “Massachusetts does not get to tell Iowans how to raise their pork.”
Will futures surge sway cash cattle trade?... Cash sources were generally expecting mostly steady cash cattle prices this week. But the surge in futures on Wednesday has some now anticipating firmer cash prices again, despite negative cutting margins and ideas packers are well supplied after recent active purchases.
October hogs surge above cash index... The CME lean hog index is up 32 cents to $84.45 as of Oct. 1. After strong gains again yesterday, October lean hog futures finished at a rare 22.5-cent premium to today’s cash quote. The discount in December hogs declined to $7.70, which is nearly $5.00 less than the five-year average drop from the beginning of October until mid-December when the contract is settled against the index.
Overnight demand news... Japan purchased 137,048 MT of milling wheat, including 85,703 MT U.S., 27,385 MT Canadian and 23,960 MT Australian. Saudi Arabia tendered to buy 295,000 MT of optional origin hard milling 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
· 7:30 a.m. Weekly Export Sales — FAS