Good morning!
Grains mixed overnight… Corn and soybeans favored the downside overnight while wheat traded modestly higher. All three saw light volume overnight. As of 6:30 a.m. CT, corn futures are around a penny lower, soybeans are fractionally lower and SRW wheat are mostly a penny higher, while HRW and HRS futures are around 3 cents higher. Front-month crude oil futures are trading near unchanged following two consecutive sessions of steep losses, while the U.S. dollar index is modestly lower.
Happy New Year from Pro Farmer... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Monday, Jan. 1 for New Year’s Day, so there will be no Pro Farmer reports that day. Grain and livestock markets resume trading at 8:30 a.m. CT on Tuesday, Jan. 2. Pro Farmer wishes you a happy New Year and prosperous 2024!
Weekly Export Sales Report out this morning... For the week ended Dec. 21, traders expect:
| 2023-24 expectations (in MT) | Last week (in MT) |
Corn | 600,000-1,400,000 | 1,013,095 |
Wheat | 200,000-600,000 | 322,702 |
Soybeans | 800,000-1,700,000 | 1,989,428 |
Soymeal | 100,000-300,000 | 147,786 |
Soyoil | (5,000)-10,000 | 3,127 |
Russia raises wheat export tax… Russia’s wheat export tax for Jan. 11-16 will be 4,165.9 rubles ($46.16) per metric ton based on an indicative price of $250.00. That’s up from a rate of 3,859.7 rubles per metric ton last week and the first increase in a month.
Russia launched large scale missile attack… Russia unleashed one of its biggest missile attacks in the war so far today, killing several people and taking place all over the country. Approximately 158 missiles and drones were fired, though Ukrainian officials note most of the missiles were shot down. The main targets were infrastructure, including export infrastructure in the Black Sea port city of Odesa.
Israel warned it will remove Hezbollah from Lebanese border… Israeli Minister without portfolio Benny Gantz said “[t]he situation on Israel’s northern border demands change,” and that “the stopwatch for a diplomatic solution is running out… If the world and the Lebanese government don’t act in order to prevent the firing on Israel’s northern residents, and to distance Hezbollah from the border, the IDF [Israeli Defense Forces] will do it,” Gantz said. Cross-border attacks have been ongoing, and escalating, since Oct. 8, the day after Hamas’s attack on Israel.
Shipping companies continue to circumvent Red Sea… Houthi attacks in the Red Sea have led to over 350 container ships and various other vessels diverting to alternative routes since late November. The U.S. military’s Operation Sea Guardian has been unable to provide immediate solutions, and it remains uncertain which ships can expect escort, given the complex nature of vessel ownership and operation. The Red Sea route comes with war risk premiums, while the Cape of Good Hope route incurs up to $1 million in extra fuel costs and surcharges imposed by shipping lines.
Panama Canal Authority continues to limit vessel transits... The Panama Canal Authority (ACP) reduced the daily limit of vessels passing through the canal to 22 ships in December, down from the usual 36 vessels, and plans to raise daily transits to 24 in January due to improved rainfall and water levels but remains below normal volume. This reduction has delayed U.S. exports of grains such as corn and soybeans during the peak shipping season. Grain carriers struggle to secure transit slots due to irregular schedules and fleet fluctuations compared to cruise and container ships. The ACP auctions extra transit slots, with winning bids ranging from $1.4 million to $2 million. Such high costs, if absorbed, would significantly increase grain transportation expenses.
Biden extends suspension of Trump-era tariffs on European steel and aluminum... The Biden administration as expected extended the suspension of Trump-era tariffs on European steel and aluminum for two more years. This move comes as efforts to find a permanent solution to eliminate these tariffs have not yielded results even after more than two years of negotiations. As part of this extension, the administration will maintain a temporary import quota system that replaced the original tariffs imposed during the Trump administration.
Maine removes Trump from state ballot… Maine on Thursday disqualified former President Trump from the state’s primary ballot in next year’s presidential primary election taking place in March, becoming the second state to bar the former president for his role in the Jan. 6 attack on the U.S. Capitol. Maine Secretary of State Shenna Bellows made the decision to bar Trump from the ballot and the decision will likely be appealed to a state Superior Court. Trump’s campaign said it would quickly file an objection to the “atrocious” decision.
Argentina’s president faces first general strike amid protests against economic reforms... Argentina’s President Javier Milei is set to confront his first general strike a little over a month after taking office. The country’s leading unions are organizing a nationwide labor strike in opposition to Milei’s plans to deregulate the economy, change the voting system, and reduce social safety nets. Workers across Argentina are expected to participate in the strike on Jan. 24, as announced by the CGT, one of Argentina’s oldest and most influential union groups. The protesters plan to gather around the Congress building in Buenos Aires to challenge what they consider an “illegal” decree signed by President Milei last week.
2024 predicted to be hottest year on record… Climate scientists are warning that 2024 could potentially become the hottest year in recorded history. A climate scientist from Texas A&M University suggests that 2024 will likely be “a bit” hotter than 2023. Additionally, it’s noted that the first year of a strong El Niño weather pattern is expected in 2024, which could result in temperature peaks. These rising temperatures have significant implications, particularly for global food supplies, as recent extreme weather events have negatively impacted crop yields and agriculture.
U.S. mortgage rates drop for nine consecutive weeks… The average rate on a 30-year fixed mortgage dropped to 6.61% down more than a percentage point from the 2023 high of 7.79% in late October, according to data released by Freddie Mac. The supply of homes for sale remains very low, keeping a lid on market activity.
Still no cash cattle trade… The holiday shortened week and lessened slaughter counts has apparently discouraged packers and feedlots from negotiations. That likely does not bode well for cash cattle prices, as packers have fresh contracted supplies available starting next week and steer weights are likely nearing their seasonal peak.
Uncertainty in CME lean hog index… After a brief uptick earlier this week, the CME lean hog index fell 14 cents to $65.57, marking a fresh seasonal low. Historical data points to likely sustained weakness through New Years, as a seasonal low is rarely forged between Christmas and New Years.
Overnight demand news... Egypt cancelled an international tender with no purchases made.
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. Weekly Export Sales — FAS
- 2:00 p.m. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC