Good morning!
Quiet overnight grain trade... Corn, soybeans and wheat spent time on both sides of unchanged while holding in tight trading ranges overnight. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are 3 to 4 cents higher and wheat futures are steady to 2 cents lower. Front-month crude oil futures and the U.S. dollar index are both trading just above unchanged.
September jobs data out this morning... Economists polled by Reuters expect the Labor Department to report non-farm payrolls increased 170,000 in September, though the lower-than-expected ADP figure earlier this week caused the “whisper” number to decline from that level. Economists expect the unemployment rate to dip to 3.7% from 3.8% in last month’s report.
Downward revisions in monthly jobs report dishearten Wall Street traders... Wall Street traders are growing cautious in their reliance on the federal government’s monthly jobs report, as it has seen a continuous streak of downward revisions this year, the Wall Street Journal reported on Thursday. The employment data is a significant economic release closely monitored by the financial industry, as it provides insights into the Federal Reserve’s interest-rate policy. What sets this year apart is that, for the first time on record, each monthly release through July has resulted in negative revisions. These downward revisions are adding complexity to Wall Street’s narrative, which suggests the economy’s robustness may lead to higher interest rates persisting for longer than initially anticipated.
Russia attacks Ukrainian grain storage... Russian drones attacked port infrastructure in Ukraine’s Odesa region, damaging a grain silo near the Danube River. As we reported in “Evening Report” on Thursday, a Turkish-flagged general cargo ship hit a mine yesterday in the Black Sea off the coast of Romania and sustained minor damage.
Exchange warns Argentine farmers need rain to plant corn... Argentine corn plantings for 2023-24 could be less than intended if substantial rains don’t come soon the Buenos Aires Grain Exchange warned. In its weekly report, the exchange said, “Rain will be necessary over the next two weeks to meet planting goals.” The exchange also said one-third of the country’s 2023-24 wheat crop was rated poor/very poor due to dry conditions and recent frosts.
FAO global food price index inches lower... The UN Food and Agriculture Organization global food price index inched down 0.1 point to the lowest level since March 2021, as declines in the price of vegoils, dairy and meat slightly offset increases in sugar and cereal grains. The sugar index jumped 9.8% from August, hitting its highest level since November 2010 amid growing concerns over the tighter global supply outlook. Compared to year-ago, prices declined 5.1% for meat, 23.9% for dairy, 14.6% for cereal grains and 20.8% for vegoils, while sugar prices jumped 48.3%.
Global renewable fuels capacity set to triple by 2025... According to BloombergNEF, global renewable fuels capacity is projected to surge to a cumulative 17.5 billion gallons by 2025. The growth in annual additions to renewable fuel capacity has been consistent, but several projects initially planned for deployment in the current and upcoming years have been delayed or put on hold as developers seek greater policy certainty in key markets. Consequently, 2025 is poised to be a pivotal year, with an estimated 6.1 billion gallons of new capacity set to come online.
Russia resumes diesel exports with new restrictions after recent ban... Russia decided to allow the resumption of seaborne exports of diesel fuel, according to Bloomberg, just weeks after imposing a ban that had significant global market repercussions. The ban had been instituted in response to domestic fuel cost increases that contributed to inflation concerns ahead of Russia’s presidential elections in March. Under the updated regulations, diesel shipments can restart, provided the fuel is delivered to Russian ports via pipelines, particularly to the western ports that account for most exported volumes. This move is expected to provide relief to importers, as Russia is a major seaborne exporter of diesel-type fuels. The new rules are set to free up approximately 90% of the pre-ban seaborne export volumes, estimated at around 630,000 barrels per day. However, the regulations also stipulate that producers must retain at least 50% of their diesel output within the country, ensuring domestic supply. The Russian government is also fully restoring subsidies to refiners to meet domestic fuel demand and compensate for price differences between domestic and international markets. This decision followed a reduction in subsidies last month, which had been criticized by President Vladimir Putin for exacerbating domestic fuel market conditions.
Bird flu found in South Dakota commercial turkey flock... Highly pathogenic avian influenza (HPAI) has been confirmed in a U.S. commercial poultry flock for the first time since April 19. According to USDA’s Animal and Plant Health Inspection Service (APHIS), the presence of the virus was confirmed in a commercial turkey flock in Jerauld County, South Dakota on Oct. 4.
Wholesale beef market struggling to find a bottom... Choice boxed beef prices firmed $1.00 on Thursday, while Select fell a dime. Despite the modest uptick in Choice prices, they are trading at the lowest level since April and showing no signs of any significant rebound. Seasonally, the market should begin to strengthen, especially given tight market-ready supplies. But with signs of demand destruction from high prices earlier this year that retailers are passing onto consumers, the struggles in the wholesale market appear likely to continue.
Seasonal cash hog slide continues... The CME lean hog index is down 58 cents, extending the seasonal slide. With market-ready supplies building, traders anticipate the price slide will continue. October lean hog futures finished Thursday $2.80 below today’s cash quote (as of Oct. 4), while December hogs held an $11.425 discount.
Overnight demand news... Exporters reported no tenders or sales.
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. Monthly Employment Report — BLS
- 10:00 a.m. Livestock and Meat International Trade Data — ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC