Good morning!
Soybeans firmer, corn and wheat choppy this morning... Soybeans rebounded from earlier weakness to trade higher early this morning, while corn and wheat are choppy. As of 6:30 a.m. CT, corn futures are trading steady to fractionally weaker, soybeans are mostly 3 cents higher, winter wheat futures are narrowly mixed and spring wheat is 1 to 4 cents lower. The U.S. dollar index is tethered near unchanged while front-month crude oil futures are around $1.85 higher.
Tropical storm forming in northwest Caribbean... A tropical storm will form in the northwestern Caribbean Sea today and is expected to reach Category 3 intensity before reaching landfall Thursday in the northern Apalachee Bay. The storm will then move through the southern Appalachian Mountains before curving to the north and northwest into the eastern Midwest as a tropical depression and then a remnant low pressure center. World Weather Inc. says the storm is likely to produce wind damage in Florida and Georgia and flooding from Florida to Kentucky and the western Carolinas.
Cordonnier again trims U.S. soybean yield, production forecasts... Crop consultant Dr. Michael Cordonnier trimmed his U.S. soybean yield forecast 0.5 bu. to 52.0 bu. per acre, noting early soybeans will be better yielding that later-harvested fields due to late-summer dryness. That reduced his soybean production estimate to 4.48 billion bushels. Cordonnier kept his corn yield and production forecasts at 182.5 bu. per acre and 15.09 billion bu., respectively. He maintained a neutral to lower bias toward both crops.
Corn, soybean CCI ratings slip despite USDA’s unchanged conditions... USDA rated 65% of the corn crop as “good” to “excellent” and 12% “poor” to “very poor.” The soybean crop was rated 64% “good” to “excellent” and 11% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 2.2 points to 366.0. The soybean rating slipped 0.7 point to 358.5. Both crops are rated well above year-ago, with corn up 30.8 points (9.2%) and soybeans up 20.4 points (6.0%). Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of Sept. 22:
· Corn: 65% good/excellent (65% last week); 92% dented (91% average); 61% mature (55% average); 14% harvested (11% average).
· Soybeans: 64% good/excellent (64% last week); 65% dropping leaves (57% average); 13% harvested (8% average).
· Cotton: 37% good/excellent (39% last week); 63% bolls opening (60% average); 14% harvested (12% average).
· Spring wheat: 96% harvested (95% average).
· Winter wheat: 25% planted (24% average); 4% emerged (5% average).
China sets wheat purchase amount, prices for next two years... China has set a 37 MMT maximum volume for wheat purchases at the minimum price in 2025 and 2026, state planner the National Development and Reform Commission said. It set the minimum purchase price for third-grade wheat produced in 2025 and 2026 at 119 yuan ($16.92) per 50 kilograms, equal to 2,380 yuan per metric ton. China buys wheat from farmers at the minimum price when the market price drops below that level to support food production.
China unveils broad range of economic stimulus measures... China’s central bank unveiled its largest stimulus since the pandemic to pull the economy out of its deflationary funk and back toward the government’s growth target. The People’s Bank of China (PBOC) announced plans to lower its reserve requirement ratio by 0.5% (50 basis points) and cut the seven-day reverse purchase rate from 1.7% to 1.5%. It did not provide a specific timeline. This marked the first time reductions to both measures were revealed on the same day since at least 2015, according to Bloomberg. The property market support package included a 50-basis-point reduction on average interest rates for existing mortgages and a cut in the minimum downpayment requirement to 15% on all types of homes, among other measures. PBOC has also introduced two new tools to boost the capital market. The first, a swap program with an initial size of 500 billion yuan, allows funds, insurers and brokers easier access to funding in order to buy stocks. The second provides up to 300 billion yuan in cheap PBOC loans to commercial banks to help them fund listed companies’ share purchases and buybacks. China’s securities regulator will issue guidance for medium and long-term funds to enter the market and measures to promote mergers, acquisitions and reorganizations. Economists say recent support measures for China’s economy are helpful, but insufficient to address deeper structural issues like sluggish growth, falling prices, a worsening real estate crisis and escalating trade tensions. They argue Beijing must take stronger actions to control the real-estate downturn and implement significant steps to boost domestic consumption to achieve sustained economic recovery.
Trump vows to Push Xi on trade deal if re-elected... Donald Trump pledged to confront Chinese President Xi Jinping over China’s failure to honor a 2020 trade deal involving $50 billion in U.S. agricultural purchases. Speaking in Pennsylvania, Trump criticized the Biden administration for not enforcing the deal and vowed to impose steep tariffs on China if re-elected. The issue of China’s economic influence has become central to the 2024 presidential race between Trump and Kamala Harris, with both candidates promising tougher stances against Beijing.
China probes U.S. firm PVH over suspected boycotting of Xinjiang products... China will launch an investigation into PVH, the parent company of Calvin Klein and Tommy Hilfiger, for suspected boycotting of cotton sourced from its Xinjiang region, the commerce ministry said. The ministry said PVH is suspected of “unjustly boycotting” Xinjiang cotton and other products “without factual basis.” The company must provide documentation and evidence within 30 days detailing any “discriminatory measures” taken regarding Xinjiang products over the past three years.
Fed officials open to more rate cuts but caution against rapid moves... Several Federal Reserve officials, including Chicago Fed President Austan Goolsbee, indicated on Monday that while additional interest rate cuts are possible, they remain cautious about moving too aggressively. Goolsbee emphasized the need to lower rates to a “neutral” level, estimating that current rates are still “hundreds” of basis points above neutral. While he advocates for significant rate reductions to maintain favorable employment and inflation conditions, others, like Atlanta Fed President Raphael Bostic, warn against hasty cuts, citing ongoing uncertainties in the labor market and inflation.
Beef margins back in the red... The average cash cattle price climbed $1.90 to $184.01 last week, which in combination with recent weakness in wholesale beef prices dropped packer margins below breakeven. Even with the red ink, cash sources expect cash cattle prices to be steady/firmer again this week. Wholesale beef prices firmed $1.62 for Choice to $301.81 on Monday, while Select dropped 80 cents to $287.79.
Cash hog index slipping again... The CME lean hog index is down 7 cents to $84.29 as of Sept. 20, marking the second straight daily decline after a brief uptick late last week. As of Monday’s close, traders narrowed the discount October lean hog futures hold to the cash index to $1.99.
Overnight demand news... Japan is seeking 112,580 MT of milling wheat in its weekly tender.
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
· No reports scheduled.