Good morning!
Beans firmer, corn and wheat weaker overnight... Soybeans extended Wednesday’s gains overnight, while corn and wheat futures weakened. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny lower, soybeans are 4 to 5 cents higher and wheat futures are 3 to 6 cents lower. The U.S. dollar index and front-month crude oil futures are both modestly firmer.
Weekly Export Sales Report out this morning... For the week ended Oct. 24, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) |
Corn | 1,800,000-3,500,000 | 3,602,594 |
Wheat | 300,000-600,000 | 532,885 |
Soybeans | 1,600,000-2,800,000 | 2,151,743 |
Soymeal | 100,000-350,000 | 159,901 |
Soyoil | 0-30,000 | 28,975 |
California, major airlines reach deal to boost SAF use... The state of California and a group representing major U.S. passenger and cargo airlines said they had reached an agreement to sharply boost the use of sustainable aviation fuel (SAF). The California Air Resources Board (CARB) and Airlines for America, an industry trade organization representing American Airlines, Delta Air Lines, United Airlines, FedEx and others, committed to a goal to increase the availability of SAF for flights within California to 200 million gallons by 2035. That would meet about 40% of intrastate travel demand and is more than 10 times current levels. CARB Chair Liane Randolph said the board and airlines will work together on incentives, timely permitting and other issues to accelerate the availability of SAF. The agreement includes a SAF working group to report progress and address barriers to deploying the fuel. The board will also create a public website that will detail the availability and use of conventional jet fuel and SAF within California.
Milei taps unseasonal source in search of dollars in Argentina... Faced with a shortage of foreign reserves, Argentina’s central bank is turning to an unusual source of funding for this time of year – carry trade by grain exporters, Bloomberg reports. Selling soybeans, wheat and corn, grain exporters can borrow dollars from banks, unlike most Argentines hampered by capital controls. They then sell those dollars and invest the pesos they receive in return in high-yield local currency assets. Dollars are available to the central bank, boosting its reserves. That carry trade, however, comes with a risk for exporters, as they depend on the central bank to keep devaluing the peso at a steady pace. The dollar boon also could end if banks lend less to exporters, or grain ends up being stored instead of being sold.
China tells carmakers to pause investment in EU countries backing EV tariffs... China told its automakers to halt big investment in European countries that support extra tariffs on Chinese-built electric vehicles (EVs), two people briefed about the matter told Reuters. Several foreign automakers also attended the meeting, where the participants were told to be prudent about their investments in countries that abstained from voting and were “encouraged” to invest in those that voted against the tariffs, the people said. Ten EU members including France, Poland and Italy supported tariffs in a vote this month, in which five members including Germany opposed them and 12 abstained. Meanwhile, Bloomberg reported the EU will send officials to Beijing to hold more talks aimed at finding an alternative to tariffs on EVs from China, citing people familiar with the situation. The two sides have been exploring whether an agreement can be reached on so-called price undertakings—a complex mechanism to control prices and volumes of exports, used to avoid tariffs.
China’s factory sector expands for first time in six months... China’s official purchasing managers index rose to 50.1 in October from 49.8 in September, marking the first expansion in factory activity since April. Output grew for the second consecutive month, reaching its highest level in six months, while new orders stabilized after five months of decline. Despite these positive signs, new export orders remained weak and uncertainty looms due to the upcoming U.S. presidential election, which could affect trade policies.
China’s central bank injects $70 billion with new liquidity tool... The People’s Bank of China (PBOC) injected $70 billion worth of cash into money markets this month via a newly established policy tool to ease liquidity stresses in the fragile economy. PBOC conducted 500 billion yuan of “outright reverse repurchase agreements” in October in order to safeguard reasonably amble liquidity in the banking system, it said in a statement. The agreements are for six months, the bank said. This is the first time it has disclosed its use of this new tool which was only unveiled earlier this week. The program allows the PBOC to buy a range of securities from primary dealers for a maximum of one year. PBOC also bought a net 200 billion yuan of sovereign bonds from the open market in October, it said separately.
Euro zone consumer inflation rises in October... Annual consumer inflation in the euro zone accelerated to 2% in October from 1.7% in September, which was the lowest level since April 2021. Core inflation, excluding prices for energy, food, alcohol and tobacco, was unchanged at 2.7% in October.
Japan holds rates steady but signals potential rate hike as inflation nears target... The Bank of Japan (BOJ) maintained current monetary policy at its latest meeting but hinted at a possible rate increase soon, as inflation approaches the 2% target. Governor Kazuo Ueda’s remarks were less dovish than before, emphasizing that future policy decisions will depend on data at the time. With steady U.S. economic data and potential risks from next week’s U.S. elections, expectations for a BOJ rate hike have shifted to December, earlier than the previously anticipated first quarter of 2025.
USDA expands H5N1 testing in dairy to enhance biosecurity... USDA’s APHIS is rolling out a tiered strategy to collect milk samples for detecting H5N1. The plan aims to strengthen biosecurity, guide containment efforts and protect farm workers exposed to infected animals. Bulk milk will initially be tested regionally, with further farm-level sampling as necessary. USDA will collaborate with state and private veterinarians, maintaining testing requirements for cattle before interstate movement to curb virus spread. Two vaccine candidates for dairy cows are also in field trials.
Cash cattle trade starts at steady/weaker prices... Cash cattle traded at mostly steady prices in the Southern Plains, though many feedlots still sought firmer bids, despite heavy pressure on cattle futures. The northern market, where supplies are more plentiful, saw trade begin at steady to lower prices.
Cash hog index picking up steam... The CME lean hog index is up another $1.05 to $86.78 as of Oct. 29, extending the string of gains to nine straight days, during which the index has jumped $2.92. This was the largest daily gain since April. After strong gains again Wednesday, the discount December hogs hold to today’s cash quote tightened to $2.405.
Overnight 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
· 7:30 a.m. Weekly Export Sales — FAS
· 2:00 p.m. Agricultural Prices — NASS