Good morning!
Wheat firms, beans weaken and corn trades mixed... Wheat futures firmed overnight, while soybeans faced mild selling pressure and corn was caught in the middle. As of 6:30 a.m. CT, corn futures are trading fractionally on either side of unchanged, soybeans are around 3 cents lower and wheat futures are 7 to 11 cents higher. Front-month crude oil futures are near unchanged, while the U.S. dollar index is nearly 600 points higher and trading at a fresh 20-year high.
Russia closer to annexing four regions of Ukraine... Russian-installed officials in four occupied regions of Ukraine reported huge majorities of votes in favor of joining Russia following referendum votes that ended Tuesday. The U.S. planned a United Nations resolution condemning the referendums as shams and was also preparing a new round of sanctions against Russia should it annex Ukrainian territory and a $1.1 billion arms package for Ukraine that will be announced soon, U.S. officials said.
Putin again slams West’s predatory food ‘swindle’... The U.S. and its allies are causing a global food crisis by draining the market, Russian President Vladimir Putin said. “Predatory” monetary and trade policies pursued by the U.S. and its allies are the primary cause of the global food crisis, Putin said. Western nations are using their wealth and ability to print money to vacuum up food products from the global market, the Russian leader said during a government meeting on Tuesday. Putin also reiterated his criticism of the Ukraine grain deal, which allowed Kiev to export food via the Black Sea. Russia believes it is not working as intended, arguing that the shipments do little to alleviate food shortages in needy nations. Russia is set to harvest a record amount of grain this year, including 100 MMT of wheat, Putin said. But Russian food products have a difficult time finding their way to the global market due to Western economic sanctions, as do Russian fertilizers, he added.
BOE intervenes in UK bond market... The Bank of England (BOE) said it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilize financial markets. BOE also said it would delay the start of a program to sell down its 838 billion pounds ($891 billion) of government bond holdings, which had been due to begin next week. “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” the BOE said. “This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy. The purpose of these purchases will be to restore orderly market conditions. The purchases will be carried out on whatever scale is necessary to effect this outcome.” Meanwhile, the International Monetary Fund ratings agency Moody’s ramped up pressure on Britain to reverse a new economic strategy that has roiled UK markets.
Argentine soybean sales slow after FX crackdown... Argentina’s ag ministry says farmers sold 1.6 MMT of soybeans between Sept. 15-21, a 30.4% decrease compared to the previous week. The slowdown in sales happened after the country’s central bank decided to prevent the purchase of foreign currency for companies using the preferential exchange rate.
China says stabilizing yuan its top priority as yuan continues to fall... China’s central bank said on Wednesday stabilizing the foreign exchange market is the top priority. PBOC said the FX market was largely operating in an orderly manner but warned against making heavy one-way bets on the currency. It reiterated the yuan has a solid basis to be basically stable. PBOC also urged members of the China FX Market Self-Regulatory Framework, which serves as a market self-regulatory and coordinating mechanism, to prevent sharp fluctuations in the currency. The remarks came after the yuan fell to its lowest level against the dollar since the global financial crisis of 2008, while the offshore yuan fell to an all-time low.
Manchin caves, now glide path to CR measure... Sen. Joe Manchin (D-W.Va.) asked Senate Majority Leader Chuck Schumer on Tuesday to remove his energy permitting package from a short-term government funding bill. Quickly after, the spending bill cleared a key Senate procedural vote and could pass as early as today, but more likely Thursday. Schumer said on the floor that he and Manchin would “continue to have conversations about the best way” to move forward on the permitting effort before the end of the year. Main reason why Manchin caved: His plan faced opposition from progressive House Democrats over climate concerns, and from Republicans still upset over Manchin’s turnabout role in the reconciliation measure. It shows again that in Congress, it’s far easier to stop something than to get something. Bottom line: Manchin caved and lost. The continuing resolution drama is over except expected passage by both chambers. As for Manchin’s dropped permitting language, he will attempt to attach it in the lame-duck session via the annual defense policy bill or the next government funding bill that will be needed in December.
Lagarde: Inflation a bigger focus than economic growth... The European Central Bank (ECB) must keep raising interest rates to tame inflation, even if the side effect of tighter policy will be weaker economic growth, ECB President Christine Lagarde said. “We have return inflation to 2% in the medium term, and we will do what we have to do, which is to continue hiking interest rates in the next several meetings,” she told a conference. “If we were not delivering (on our mandate) it would hurt the economy far more.” She said the “first destination” of rate hikes will be to reach the neutral rate, which neither stimulates nor slows growth.
Indonesia lowers crude palm oil reference price... Indonesia plans to set its crude palm oil reference price at $792.19 per metric ton for Oct. 1-15, economic ministry official told Reuters, down from $846.32 per metric ton for Sept. 16-30. That would place the export tax for palm oil at $33 per metric ton.
China’s sow herd grows fractionally in August... China’s sow herd totaled 43.2 million head at the end of August, according to local media, citing ag ministry data. That was a 0.6% increase from July.
Slow start to cash cattle negotiations... Traders came into the week hopeful packers would raise cash cattle bids after paying higher money last week. But heavy pressure on futures has delayed the start of cash cattle negotiations and increased uncertainty about this week’s eventual trade. Packer bids have been virtually nonexistent to this point and feedlots aren’t likely to be willing sellers at lower prices. That points to cash negotiations extending deep into the week.
Overly pessimistic in hogs again... Traders had nearly wiped out the discount October hog futures held to the cash index, but it has sharply widened again with hefty losses the past week. While the cash index is down another 58 cents and has fallen five of the last six days, October hogs finished Tuesday $7.71 below today’s cash quote (as of Sept. 26).
Overnight demand news... The Philippines tendered to buy up to 50,000 MT each of feed wheat and feed barley.
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
- 8:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Egg Products — NASS
- 2:00 p.m. Potatoes — NASS