Good morning!
Wheat firmer, corn and beans weaker this morning... Wheat futures rebounded from Friday’s losses during the overnight session, while corn and soybeans pulled back from their gains at the end of last week. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are 5 to 8 cents lower and wheat is mostly 2 to 3 cents higher. The U.S. dollar index is around 100 points lower and front-month crude oil futures are about 50 cents lower.
Helene rips through Southeast... While the full extent of Helene’s impact on U.S. cotton production and other crops is still being assessed, reports note the hurricane caused significant crop damage and disrupted harvesting operations in key cotton-producing states. Remnants of Helene also moved through the lower Midwest and a part of the Tennessee River Basin. However, markets remained cautious, waiting for more concrete data on the extent of the damage. Mostly dry conditions are expected across the Plains and Corn Belt for the next week to 10 days.
Key grains stocks data out later this morning... USDA’s Quarterly Grain Stocks Report at 11:00 a.m. CT will set final 2023-24 ending stocks for corn and soybeans. The report has a history of surprises, especially for corn, with analysts routinely missing those estimates by a wide margin. USDA will also issue its final estimates for 2024 wheat production. For Sept. 1 stocks, analysts expect 1.844 billion bu. for corn, 351 million bu. for soybeans and 1.973 billion bu. for wheat. All-wheat production is expected at 1.966 billion bu., down from the August estimate of 1.982 billion bushels.
U.S. dockworkers preparing to strike at midnight... A potential strike looms at East Coast and Gulf of Mexico ports starting Oct. 1 if no deal is reached between the United States Maritime Alliance (USMX) and International Longshoremen’s Association (ILA). President Joe Biden said Sunday he wouldn’t intervene in any dockworkers strike. Biden said resolving the dispute is a matter for collective bargaining and expressed his opposition to using the Taft-Hartley Act. While a strike could have significant economic consequences, the administration believes the economy and supply chains are more resilient now than during the pandemic. Still, Oxford Economics estimates that a strike would cost the U.S. economy $4.5 billion to $7.5 billion a week.
Canadian grain workers end strike at Port of Vancouver... Grain terminal workers at the Port of Vancouver ended a four-day strike that disrupted grain exports during the critical harvest season following a tentative agreement. Meanwhile, longshoremen at the Port of Montréal are set to begin a three-day strike today, potentially disrupting cargo shipments at one of Canada’s busiest seaports.
India resumes non-basmati white rice exports... India on Sunday approved the resumption of non-basmati white rice exports as inventories grow and farmers prepare for the upcoming harvest. This decision, combined with a new export floor price of $490 per metric ton and a reduction of the export tax on white rice to zero, is expected to boost global rice supplies and lower international prices. India’s easing of export restrictions comes after a series of measures to address rising local stocks and follows improved monsoon rains that have led to increased rice planting across the country.
The week ahead in Washington... Lawmakers are on recess until mid-November. Vice presidential candidates Sen. JD Vance (R-Ohio) and Minnesota Governor Tim Walz participate in a debate hosted by CBS News on Tuesday. The week’s main economic data will be the jobs report for September on Friday.
China’s factory sector contracts in September... China’s official manufacturing purchasing managers index (PMI) rose to 49.8 in September, though that marked the sixth consecutive month of contraction in factory activity. China’s Caixin/S&P Global manufacturing PMI, which measures smaller and export-oriented factories, fell to 49.3 in September, the lowest since July 2023.
China cuts existing mortgage rates, cities ease home-buying curbs... Starting Nov. 1, homeowners in China will be able to renegotiate their mortgage terms with their current lenders. This includes the option for those with fixed mortgage rates to adjust their loans based on the latest loan prime rate, which serves as a benchmark for mortgage loans. The People’s Bank of China (PBOC) said these initiatives are expected to lower average mortgage rates for individual borrowers by 50 basis points. This reduction is estimated to decrease annual interest costs by approximately 150 billion yuan ($21 billion). Meanwhile, three of China’s largest cities eased rules for homebuyers. Trading hub Guangzhou became the first tier-1 city to remove all restrictions, saying it will stop reviewing homebuyer eligibility and no longer limit the number of homes owned. Both Shanghai and Shenzhen said they will allow more people to purchase residences in suburban areas, as well as allow others to buy more homes. Shanghai and Shenzhen also announced they were lowering minimum downpayment ratios for first and second homes to 15% and 20%, respectively, in a bid to boost demand.
PBOC ramps up net purchases of sovereign bonds in September... China’s central bank said it bought 200 billion yuan ($28.52 billion) of the country’s government bonds in open-market operations in September, surpassing the amount of notes purchased in August. PBOC said the operation was to “strengthen counter-cyclical adjustment of monetary policy and keep banking system liquidity reasonably ample.”
FDA chief warns of bird flu pandemic risk, updates on food labeling efforts... FDA Commissioner Robert Califf raised concerns about the threat of avian influenza, highlighting the significant number of U.S. dairy cattle infected. He warned that a mutation allowing the virus to infect humans could trigger the next pandemic. While current containment measures are focused on farms, Califf emphasized the need for robust surveillance systems. Meanwhile, he expressed optimism about finalizing new definitions for “healthy” food labels and progressing with front-of-pack labeling initiatives, which he believes will drive industry change.
China’s sow herd contracts... China’s sow herd stood at 40.36 million head at the end of August, down 4.8% from a year earlier, according to the ag ministry. The sow herd was modestly smaller than the 40.41 million head at the end of July.
Another week of higher cash cattle trade... Cash cattle traded higher for a third straight time last week, though traders will have to wait until later this morning to get the official price. Cash opinions are uncertain to open this week, with some looking for higher prices again, while others feel recent hefty purchases by packers, negative margins and a fresh supply of contracted cattle will halt gains.
Cash hog index slips, pork cutout firms... The CME lean hog index is down 4 cents to $84.03 as of Sept. 26, ending a one-day uptick and marking a new seasonal low. The pork cutout value firmed $1.11 to $95.75 on Friday, as strong gains in loins, butts, picnics and ribs more than offset modest declines in hams and bellies.
Weekend 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
· 10:00 a.m. Weekly Export Inspections — AMS
· 11:00 a.m. Grain Stocks — NASS
· 11:00 a.m. Annual Small Grains Summary — NASS
· 2:00 p.m. Livestock and Meat Domestic Data — ERS
· 3:00 p.m. Crop Progress — NASS