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Livestock producers: Extend meal coverage... Soymeal futures have dropped to just above $300.00, which has represented a strong value level over the past 10 to 15 years. With that in mind, we advise livestock producers to cover remaining fourth quarter soymeal needs and 25% of first quarter 2025 needs in the cash market. Be prepared to extend coverage deeper into the first quarter of next year when the market signals a bottom.
Cotton hedgers: Add short-term hedge coverage... December cotton futures violated psychological support at 70.00 cents, opening the door for a possible return to the August lows. We advise cotton hedgers to hedge 15% of 2024-crop production in December futures to limit downside risk. Our fill was 69.84 cents.
H5N1 detected in U.S. swine for the first time... H5N1 was detected in a pig in a backyard farm in Oregon, the first detection of the virus in U.S. swine, USDA said. Tests are still pending for two other pigs on the farm. The Oregon farm has been quarantined, and other animals there, including sheep and goats, are under surveillance. Pigs and poultry on the farm were culled to prevent the spread of the virus and enable additional testing of the swine. The pigs were not intended for the commercial food supply and there is no concern about the safety of the U.S. pork supply.
SovEcon lowers Russian wheat export forecast to three-year low... SovEcon further lowered its 2024-25 grain export estimates, citing new restrictions prohibiting sales of Russian grain by foreign third parties to sovereign buyers at tenders. SovEcon now expects Russia to export 45.9 MMT of wheat in the current marketing year, down 1.7 MMT from its prior forecast. That would be the lowest since 2021- 22. Total grain exports are forecast at 53.6 MMT, down 1.8 MMT.
SovEcon noted the new export measure would affect the domestic market as well. It also said expected further hikes in wheat export duties, which have risen 80% during the past month alone, will also weigh on exports. “This will lead to the closure of businesses for a significant number of small and medium traders organizing domestic deliveries,” SovEcon said.
China seeks stronger soybean ties with Russia... China is willing to cooperate more closely with Russia in the soybean industry, an agriculture ministry official said, as agriculture is a key component of China/Russia bilateral relations. China currently imports most of its soybean needs, with the bulk of the supplies coming from Brazil and the United States. China has been seeking to diversify its sources for soybeans and other agricultural products, along with increasing domestic production.
Update on 2023 ARC-CO and PLC payments for corn, soybeans and wheat... Farmdoc Daily provides the following update. No Price Loss Coverage (PLC) payments were triggered for corn, soybeans or wheat as the 2023 marketing year prices for these crops were all above their respective effective reference prices. Agriculture Risk Coverage at the county level (ARC-CO) payments for corn, soybeans and wheat were triggered in a relatively small number of counties nationally. Notably, multiple counties in Nebraska and Kansas triggered ARC-CO payments for all three crops.
ARC-CO triggers support payments when actual revenue in the county falls below 86% of benchmark revenue. Benchmark revenue is the product of a national benchmark price and a county-level benchmark yield. The 2023 ARC benchmark prices for corn, soybeans, and wheat were $3.98, $9.57, and $5.50 per bu., respectively. With marketing year prices in 2023 above the ARC benchmark price for each crop, a yield loss would need to be experienced at the county level to trigger ARC-CO support. Corn’s $4.55 price implies the average corn yield for a county would need to be 24.8% below the county’s benchmark yield to trigger an ARC-CO payment. The $12.40 price for soybeans for 2023 implies the average soybean yield in a county would need to fall at least 33.6% below benchmark. The required yield loss for wheat, based on its $6.96 price, would need to be at least 32%.
Click here to view related ARC-CO payment maps.
Ukraine to launch minimum grain export prices scheme in December... Ukraine’s new system of minimum export prices for the country’s key grain and oilseed shipments is likely to be operational at the beginning of December, Ukrainian agriculture minister Vitaliy Koval said. Under the scheme, minimum permissible export prices will be calculated on the basis of state customs service data, taking into account the terms of delivery for the previous month and using a 10% discount. It will apply to shipments of wheat, corn, sunflower oil, soybeans, rapeseed and some other agricultural commodities.
The new scheme was originally intended to be launched in August, but a large number of necessary legislative changes delayed it.
GOP gears up for leadership elections as Senate and House face tight races... House and Senate Republicans are pushing forward with leadership elections soon after the Nov. 5 general election, even though some races could remain undecided. Senate Republicans will hold their internal elections on Nov. 13, likely in the Old Senate Chamber, while House Republicans will meet the same day at the Hyatt Regency.
Sen. Mitch McConnell’s (R-Ky.) tenure as GOP leader is nearing its end, with Sens. John Thune (R-S.D.), John Cornyn (R-Tex.) and Rick Scott (R-Fla.) vying to succeed him. Meanwhile, the race to replace John Barrasso (R-Wyo.) as Conference Chair sees Sens. Tom Cotton (R-Ark.) and Joni Ernst (R-Iowa) competing.
In the House, Speaker Mike Johnson (R-La.) aims to move forward despite potential delays in California’s slow vote count, which could significantly impact the final majority. The House GOP is also considering rule changes, including clarifying leadership roles in the event of a Speaker’s removal.
U.S. economic growth slows a little in Q3... The U.S. economy expanded 2.8% on an annualized rate in the third quarter, according to the advance estimate. That was slower than the 3% growth in the second quarter and expectations for a steady reading. The slight miss reflected a widening of the trade deficit as businesses boosted imports to satisfy robust demand, while inventory accumulation was pared back. Despite the mildly disappointing figure, consumer spending increased at its fastest pace in 1.5 years in the third quarter and inflation slowed sharply.