Good morning!
Grains lower to open the week... Corn, soybeans and wheat faced followthorugh selling during the overnight session. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 5 to 6 cents lower and wheat futures are unchanged to 3 cents lower. The U.S. dollar index is holding near unchanged while front-month crude oil futures are around $1.85 higher.
Hurricane Milton to impact central Florida... Hurricane Milton will bring damaging wind and flooding rain to central Florida during the middle of this week. Milton is much smaller in size relative to Helene, but it is expected grow as it approaches Florida. World Weather Inc. says Milton will come and go quickly, which may help reduce the duration of the most damaging conditions. Damage to Florida’s citrus crop will be due more to excessive winds than rainfall.
Another week of open U.S. harvest weather, central Brazil gets needed rains... The central U.S. will remain dry over the next week, while temps will run above normal. Brazil’s center-west and center-south crop areas will see slowly improving shower activity, but resulting rainfall won’t reverse the dry pattern. Argentina will be wetter in the north half to two-thirds of the nation during the next 10 days.
Ukraine says Russian missile strike damaged grain vessel... A Russian missile strike damaged a civilian Saint Kitts and Nevis-flagged vessel loaded with corn in Ukrainian port of Pivdennyi on Sunday, the Ukrainian restoration ministry said. The 15 crew members were not injured. This is the third Russian attack on a civilian vessel in the Black Sea region in a month.
The week ahead in Washington... Congress is out until Nov. 12. Focus is on needed aid for those states impacted by Hurricane Helene, though it appears Congress will not be called back to deal with additional disaster aid funding. This will be the top priority once they return. The Supreme Court’s upcoming term starts today and will run through June 2025. The economic focus will be minutes from the Fed’s last monetary policy meeting on Wednesday, consumer inflation data for September on Thursday and producer prices on Friday. USDA will update ag trade data on Thursday and release the October Crop Production and Supply & Demand Reports on Friday.
Fed’s bigger September rate cut questioned amid strong jobs data... Former Treasury Secretary Larry Summers criticized the Federal Reserve’s decision to cut interest rates by 50 basis points in September, calling it a mistake following strong U.S. job growth data. Non-farm payrolls rose by 254,000 in September, surpassing expectations, while unemployment fell to 4.1%. Summers, pointing to a “high neutral rate environment,” urged caution in future rate cuts. Meanwhile, billionaire investor Stanley Druckenmiller expressed concerns the Fed might be cornered into future rate cuts following stronger-than-expected September payroll growth. Druckenmiller warned that with GDP above trend, corporate profits strong and equity markets at all-time highs, there’s little sign of economic restriction. His comments follow a broader Wall Street sentiment urging caution on rate cuts, as traders scale back expectations for a large cut in November and question the Fed’s September 50-basis-point reduction.
China’s Sept forex reserves rise more than expected... China’s foreign exchange reserves grew by $28.2 billion to $3.316 trillion last month from $3.288 trillion in August. That’s the highest level since December 2015. The yuan strengthened about 1.1% against the U.S. dollar in September, while the dollar last month weakened around 1% against a basket of other major currencies.
China’s gold reserves unchanged for fifth straight month in September... China’s gold holdings stood at 72.8 million troy ounces at the end of last month. The value of the gold reserves, however, rose to $191.47 billion from $182.98 billion at the end of August. Global central banks, which actively bought gold in 2022-2023, are on track to slow purchases in 2024 from 2023, according to the World Gold Council, but to keep them above the pre-2022 level. This is partly due to the pause in purchases by the People’s Bank of China, which until May had bought gold for 18 consecutive months.
Euro zone investor morale rises in October... Investor morale in the euro zone unexpectedly rose in October after three consecutive months of decline, boosted by rising expectations even as dissatisfaction with the current situation hit a new low this year. The Sentix index for the euro zone rose to -13.8 in October from -15.4 in September. Investor expectations rose to -3.8 points this month from -8.0 in September. The current situation score for the currency union, on the other hand, dropped for a fourth month in a row to its lowest level this year at -23.3.
Cash cattle extend price rally... Cash cattle prices firmed for a fourth consecutive week, though the official price for last week won’t be known until late this morning. With margins deep in the red, it’s unlikely packers will want to raise cash cattle prices again this week, though feedlots won’t be in any hurry to move cattle at lower prices. Extended cash negotiations are likely.
Rise in cash hog index ends... The CME lean hog index is down 7 cents to $84.83 as of Oct. 3, ending a three-day rise. October lean hog futures finished Friday 80.5 cents below the cash index, while December hogs held a $8.68 discount.
Weekend demand news... Saudi Arabia purchased 307,000 MT of milling wheat, with the bulk of it likely to be sourced from Russia. Algeria tendered to buy a nominal 50,000 MT of optional origin soft milling wheat. Bangladesh tendered to buy 50,000 MT of optional origin milling wheat. Iran tendered to buy 120,000 MT of corn from Brazil, Europe or the Black Sea region and 120,000 MT of feed barley from the EU or Black Sea region.
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