First Thing Today | October 16, 2023
Good morning!
Quiet grain trade to start the week... Corn, soybeans and wheat held in relatively tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading fractionally on either side of unchanged, soybeans are 1 to 2 cents higher, SRW wheat futures are mostly 6 to 8 cents higher, HRW and HRS wheat futures are mostly 3 to 4 cents higher. Front-month crude oil futures are near unchanged and the U.S. dollar index is down around 175 points.
Israeli strikes on Gaza intensify... Israeli forces kept up their attacks of Gaza on Monday after diplomatic efforts to arrange a ceasefire to allow foreign passport holders to leave and aid to be brought into the area failed. While the fighting is intensifying, market reaction remains relatively muted.
Record NOPA crush expected for September... Traders expect the National Oilseed Processors Association (NOPA) to report its members crushed 161.7 million bu. of soybeans during September. If realized, that would be up 0.1% from August, 2.5% above last year and a record for the month. Soyoil stocks are expected to total 1.208 billion lbs. at the end of September.
Firm raises Russian grain crop, export forecasts... Russia’s IKAR agriculture consultancy raised its forecast for Russia’s grain crop by 400,000 MT to 141.6 MMT. The firm expects Russia to export 64.7 MMT of grain in 2023-24.
India reviewing floor price for basmati rice exports... India said on Saturday said it will maintain a $1,200 per ton minimum export price on basmati rice shipments, which was first imposed in August to calm local prices. But a review of the floor price “is under active consideration of the government.” Exporters say the price floor is adversely affecting their shipments.
The week ahead in Washington... The House leadership saga continues, with Rep. Jim Jordan (R-Ohio) being the latest nominee to be speaker, though he faces an uphill battle. The House will reconvene at 5:00 p.m. CT today with a proposal to make Rep. Patrick McHenry (R-N.C.) temporary speaker gaining steam. Until Republicans can unite around a speaker candidate, the House is poised to remain unable to conduct business, including the next steps for any new farm bill yet this year. Several Federal Reserve officials, including Chair Jerome Powell, will give speeches this week, which the market hopes will give clues to future interest rate decisions. Key agricultural data this week will be this afternoon’s harvest progress for corn and soybeans, along with Friday’s Cattle on Feed Report.
China ramps up liquidity support for banking system... The People’s Bank of China (PBOC) conducted medium-term lending facility (MLF) operations worth 789 billion yuan ($107.96 billion) to keep liquidity in the banking system adequate. With 500 billion yuan worth of MLF loans maturing, PBOC is pumping 289 billion yuan of fresh liquidity into the banking system, the biggest such net injection in nearly three years. Meanwhile, PBOC held the rate on the one-year policy loans unchanged at 2.50%.
China lifts FMD ban on some Russian regions... China lifted a ban on foot and mouth disease (FMD) for sheep, cattle and pigs in 22 Russian regions. China’s ag ministry says livestock and their products from these regions that comply with Chinese laws are allowed to enter the country.
Bullish cash cattle hopes... Cash cattle traded higher last week, which gives traders hope of firmer cash prices again this week. But packers bought a lot of cattle, which could limit their willingness to actively raise bids again this week. With USDA’s Cattle on Feed Report out Friday afternoon, this week’s cash negotiations are likely to push deep into the week.
Hog fundamentals weaken... The CME lean hog index is down 31 cents to $82.11, ending a two-day uptick in prices. The pork cutout value fell $1.64 on Friday as all cuts but ribs traded lower. Despite big discounts in winter-month hog futures, the fundamental pressure is likely to keep buyer interest limited and could encourage fresh selling.
Weekend demand news... Bangladesh tendered to buy 50,000 MT of optional origin milling wheat.
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. Export Inspections — AMS
- 11:00 a.m. Monthly Soybean Crush — NOPA
- 11:00 a.m. Cotton and Wool Outlook: October 2023 — ERS
- 11:00 a.m. Oil Crops Outlook: October 2023 — ERS
- 2:00 p.m. Dairy Monthly Tables — ERS
- 2:00 p.m. Feed Outlook: October 2023 — ERS
- 2:00 p.m. Rice Outlook: October 2023 — ERS
- 2:00 p.m. Wheat Outlook: October 2023 — ERS
- 2:00 p.m. Turkey Hatchery — NASS
- 3:00 p.m. Crop Progress — NASS
