First Thing Today | October 11, 2023

Good morning!

Quiet overnight grain trade... Corn, soybeans and wheat held in tight trading ranges during a quiet two-sided overnight session. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny higher, soybeans are steady to 2 cents higher and wheat futures are steady to 3 cents lower. Front-month crude oil futures are modestly weaker, while the U.S. dollar index is trading just above unchanged.

Escalating conflict in Middle East... In a volatile turn of events, an anti-tank missile fired from Lebanon struck an Israeli military post near the border, intensifying the already heightened tensions in the region. Adding to the complexity of the situation, Hezbollah, an Iran-funded group operating from Lebanon, has expressed solidarity with Hamas and launched several rockets at Israel. The specter of a ground invasion of Gaza looms as Israeli Prime Minister Benjamin Netanyahu vowed that their actions in the days to come would have far-reaching repercussions. However, such an invasion would be fraught with challenges, given Gaza’s densely populated areas, intricate underground tunnel network and the inherent risks it poses to potential hostages. U.S. Secretary of State Antony J. Blinken plans to arrive in Israel on Thursday, carrying “a message of solidarity and support” from Washington.

House Republicans to hold internal election... The House Republican Conference will hold its internal election this morning at 9 a.m. CT. A cloud of uncertainty hangs over the process, leaving it unclear how long it will take to agree on a new leader. The two declared candidates vying to replace Speaker Kevin McCarthy, namely No. 2 House Republican Steve Scalise of Louisiana and hardline Judiciary Chair Jim Jordan of Ohio, addressed fellow Republican lawmakers during a closed-door meeting Tuesday evening. The ousting of McCarthy has cast a shadow of doubt over critical matters, including funding for the U.S. government, as a temporary bill is set to expire after Nov. 17, as well as assistance to Ukraine and Israel. The ongoing leadership struggles have also raised the possibility of new candidates emerging in the event that none of the current contenders can secure enough support to assume the role of speaker.

Crop progress report highlights… Following are highlights from USDA’s crop progress and condition update as of Oct. 8.

• Corn: 89% mature (85% average); 34% harvested (31% average); 53% good/excellent (53% last week).
• Soybeans: 93% dropping leaves (87% average); 43% harvested (37% average); 51% good/excellent (52% last week).
• Cotton: 82% bolls opening (82% average); 25% harvested (24% average); 32% good/excellent (30% last week).
• Winter wheat: 57% planted (57% average); 29% emerged (30% average).

France raises wheat export forecast... France’s ag ministry raised its forecast for 2023-24 wheat exports outside the EU by 300,000 MT to 9.8 MMT, though that would still be 3.5% below last year. The ministry cut its forecast for wheat exports within the bloc by 210,000 MT to 7.54 MMT, which would be up 14.8% from 2022-23.

Ukraine keeps winter wheat plantings forecast unchanged... A senior Ukrainian ag ministry official said he still expects the country to plant 4.4 million hectares to winter wheat. As of Oct. 9, 3.7 million hectares had been planted to the crop. Last week, Ukraine’s ag minister warned not all intended winter wheat acres would likely be seeded.

India plans to extend duty on parboiled rice exports... India is planning to extend a 20% duty on exports of parboiled rice until March 2024, a government official told Reuters. The duty that was imposed in August was originally set to expire Oct. 15.

Indonesia to launch crude palm oil futures exchange... Indonesia will launch its crude palm oil (CPO) futures exchange on Friday, but it will not make trading via the exchange mandatory, its chief regulator told Reuters. Authorities had previously planned to make it mandatory for all CPO exports to go through the exchange, in order to drive global palm oil prices and create benchmarks similar to those in Kuala Lumpur and Rotterdam.

Euro zone consumers see inflation holding above ECB target for years... The European Central Bank’s Consumer Expectation Survey, carried out in August and released on Wednesday, showed the median respondent thought inflation would be 2.5% in three years’ time, up from 2.4% in the previous survey around a month earlier. Consumers’ views about inflation in the coming 12 months showed a slight increase to 3.5% from 3.4% in July.

EU food safety agency recommends preventive bird flu vaccination... The European food safety agency (EFSA) is recommending preventative bird flu vaccination for susceptible poultry in areas with a high risk of transmission to stem the spread of the virus. EFSA also recommended that, in the event of an outbreak, emergency protective vaccination should be carried out in a 3-kilometer (1.9 mile) radius of the outbreak in high-risk transmission areas. Vaccination should complement and not replace other preventive and control measures, such as infection monitoring in birds, early detection and biosecurity, and is recommended as part of an integrated disease control approach, it added. The opinion comes after France last week became the first EU country and the world’s first large poultry exporter to launch a nationwide bird flu vaccination campaign.

Movement soars as beef prices drop... Packers have struggled to push wholesale beef prices higher, with Choice anchored near $300.00 and Select holding near $275.00. But sharp losses in wholesale prices on Tuesday signaled there’s still strong demand under the market on price pullbacks. With Choice down $2.36 and Select $1.35 lower, packers moved a strong 217 loads of product on the day.

Cash hogs showing signs of stabilizing... The CME lean hog index is down another 20 cents to $82.26 (as of Oct. 9). Remember, the index is a two-day weighted average. The single-day average for Monday at $82.31 topped Friday’s single-day figure at $82.22, signaling the cash market may be stabilizing.

Overnight demand news... South Korea purchased 202,000 MT of corn in two separate tenders – two cargoes expected to be sourced from South America or South Africa and one cargo of optional origin. Thailand purchased 60,000 MT of optional origin feed wheat. Japan tendered to buy 60,000 MT of feed wheat and 20,000 MT of 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

• 2:00 p.m. Broiler Hatchery — NASS