Good morning!
Wheat leads overnight price strength... Wheat futures firmed overnight amid global supply concerns and rising tensions in the Black Sea region, while corn and soybeans built on Thursday’s gains. As of 6:30 a.m. CT, corn futures are trading 3 to 4 cents higher, soybeans are 2 to 3 cents higher, winter wheat markets are 8 to 11 cents higher and spring wheat is 6 to 7 cents higher. The U.S. dollar index is more than 300 points lower and front-month crude oil futures are around 75 cents higher.
Francine weakening, Gulf ports reopening... Hurricane Francine is expected to dissipate today. However, it continues to produce heavy rainfall, across the Delta and Southeast. Lighter rains are expected up into the Ohio River valley. The ports of Cameron, Lake Charles, New Orleans, Plaquemines and St. Bernard have reopened but have restrictions in place, the U.S. Coast Guard said. The Texas Port of Corpus Christi lifted its restrictions and ports in Freeport, Houston and Sabine reopened. Meanwhile, grain export facilities in several locations remain without power, but the North American Export Grain Association and National Grain and Feed Association said there was little major damage based on reports from their members.
Low water levels on Mississippi River disrupt grain barge movements... As of Sept. 12, low water levels on the Mississippi River have forced barge operators to reduce draft limits and tow sizes, particularly affecting grain shipments, according to USDA’s Grain Transportation Report. Drafts have been cut to 9.5 feet on the Ohio River, 10 feet from St. Louis to Greenville and 10.5 feet from Greenville to the Gulf. Tow sizes are down by 14% to 25%, leading to transit delays of one to two days. Barge groundings are common near Memphis, and 24-hour closures in the Vicksburg District have begun to allow dredging. Although Hurricane Francine’s rain may temporarily relieve low water levels, facilities south of Caro, Illinois, remain closed. Normal operations, including barge flow from the Gulf, may resume soon, depending on hurricane damage.
Romania: Russian attack on Ukrainian ship near its border ‘unprecedented escalation’... Romania’s foreign ministry said the attack on a grain ship by Russia was “unprecedented escalation” in its war against Ukraine. Kyiv accused Russia on Thursday of using strategic bombers to strike a civilian grain vessel in a missile attack in neutral Black Sea waters near Romania.
Putin warns of war escalation... Meanwhile, Russian President Vladimir Putin threatened retaliation as the U.S. and U.K. prepare to discuss allowing Ukraine to use Western-supplied missiles to strike targets inside Russia. A meeting is set for today between President Joe Biden and U.K. Prime Minister Keir Starmer, could pave the way for Ukraine to use British-made Storm Shadow missiles and possibly U.S.-supplied ATACMS on Russian soil. This potential shift in Western support follows revelations that Iran has supplied Russia with ballistic missiles, further heightening concerns about the conflict’s escalation. Western officials are weighing the risks of expanding Ukraine’s strike capabilities while seeking to curb Russian gains in eastern Ukraine.
Vance downplays tariff impact, defends protectionist trade policies... During a Thursday interview with CNBC, GOP vice presidential candidate JD Vance supported Donald Trump’s tariff policy, dismissing concerns from economists and agricultural groups about the negative effects on agriculture and consumer prices. He argued that while tariffs may raise prices temporarily, they will eventually lower costs through increased domestic manufacturing, aligning with Trump’s anti-China and protectionist agenda. Vance’s stance diverges from traditional Republican free-trade views and contradicts mainstream economic research, which links tariffs to higher consumer prices and job losses. Critics say Vance lacks evidence to support his claims.
Online grocery prices post record decline... U.S. consumers are experiencing relief in grocery costs, particularly online, with online grocery prices dropping 3.7% in August, the largest decline since Adobe began tracking in 2014. While online grocery shopping represents about 12% of the total market and tends to fluctuate more than in-store prices, the overall trend aligns with broader grocery pricing patterns, Bloomberg reports.
Months-long labor dispute ends at Australia’s biggest sugar maker... Workers at Wilmar Sugar and Renewables, Australia’s largest sugar maker, voted to accept a pay offer, the company said on Friday, ending a months-long industrial dispute that disrupted sugar production. Labor action since May delayed the start of the cane crushing season and led to several shutdowns after it began. Wilmar said that so far this crushing season its mills had processed about 6.3 MMT of sugar cane, around 40% of the estimated crop.
China bond yields sink to record low... The yield on China’s most actively traded 10-year sovereign notes dropped to 2.065%, a level unseen since official records became available in 2002. The move came even as state banks were seen becoming more active in selling long-dated bonds in the secondary market in recent days, a sign the People’s Bank of China may have intervened to cool the rally. This underscores a wide gap between where traders and Chinese policymakers think bond yields should be.
China approves amended statistics law to combat data fraud... China’s top legislative body has approved an amended statistics law, state-run Xinhua news agency reported, in the latest move to fight persistent data fraud amid skepticism about the reliability of data. Xinhua said the standing committee of the National People’s Congress approved the law, without providing details. Earlier this week, state media quoted a spokesperson of the top legislative body as saying the amended law will help strengthen the prevention of statistical fraud and increase the punishment of officials for falsifying economic data. Analysts outside China have long been skeptical of the reliability of Chinese data, especially numbers that aren’t supportive for the country’s economy.
Euro zone industrial production decline slows in July... Industrial production in the euro zone decreased 2.2% from year-ago in July, an improvement from the 4.1% drop in June, though the seventh straight month of year-over-year declines.
H5N1 detected in eight California dairy herds... The H5N1 virus has been found in eight dairy herds in California, according to USDA Deputy Undersecretary Eric Deeble. Cattle from the first three herds tested positive for the same variant detected in other states, with tests on the remaining five herds to be completed this week. All herds have been quarantined. Additionally, a Missouri individual previously hospitalized with H5N1 has recovered. Health officials also announced a campaign to inoculate farmworkers against seasonal flu starting in October.
Cash cattle trade mostly steady... Cash cattle trade so far this week took place at roughly steady prices with last week in the Southern Plains, though some feedlots continued to hold out for higher bids. Cash negotiation in the northern market remained limited.
Cash hog slide continues, pork cutout rebounds... The CME lean hog index is down another 11 cents to $85.35 as of Sept. 11. The pork cutout firmed $1.27 on Thursday to $94.18 amid strong gains in bellies, ribs, loins and butts.
Overnight demand news... Indonesia tendered to buy 450,000 MT of rice that can be sourced from Vietnam, Thailand, Myanmar, Cambodia or Pakistan.
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
· 11:00 a.m. Feed Grains Database — ERS
· 2:00 p.m. Season Average Price Forecasts — ERS
· 2:00 p.m. Wheat data — ERS
· 2:00 p.m. Peanut Prices — NASS
· 2:00 p.m. Turkey Hatchery — NASS
· 2:30 p.m. Commitments of Traders — CFTC