First Thing Today | October 18, 2023
Good morning!
Grains firmer overnight... Soybeans were supported by followthrough buying overnight, while corn and wheat rebounded from losses earlier this week. As of 6:30 a.m. CT, corn futures are trading 3 cents higher, soybeans are 6 to 8 cents higher and wheat futures are 3 to 6 cents higher. Front-month crude oil futures are more than $2.00 higher and the U.S. dollar index is trading just above unchanged.
Biden arrives in Israel... President Joe Biden has arrived in Israel, where he faces the challenging task of showing support for the United States’ closest ally in the Middle East while also working to prevent the Israel/Hamas conflict from escalating further. During the trip, Biden was originally scheduled to travel to Jordan to meet with King Abdullah II, Mahmoud Abbas, the president of the Palestinian Authority, and Egyptian President Abdel Fattah el-Sissi. The meeting in Amman was canceled after a rocket struck a Gaza hospital killing and injuring hundreds on Tuesday.
Another Jordan vote expected today... Jim Jordan (R-Ohio) faces an uphill battle in his quest to become Speaker of the House amid Republican divisions. Another vote on Jordan is expected around 11 a.m. ET. The divisions within the party have left the future Speaker unclear, leading to suggestions that acting Speaker Patrick McHenry (R-N.C.) could be a temporary solution to bridge the gap. His authority is currently limited to overseeing the election of a new speaker. A motion to formally elect McHenry following the second vote on Jordan’s speakership today is expected, assuming Jordan again falls short.
China watcher: China to step up purchases of U.S. soybeans... China is short-bought on soybeans and soybean crush margins are robust, a China watcher informs, with logistical problems in both Brazil and the U.S. limiting recent purchases. China is closely watching transportation glitches in both countries and will soon accelerate its purchases of U.S. soybeans, the source informs.
India to allow export of non-basmati white rice to some countries... India will allow exports of non-basmati white rice to Nepal, Cameroon, Malaysia, Philippines, Seychelles, Ivory Coast and the Republic of Guinea. India in July banned exports of non-basmati white rice and later imposed a 20% duty on exports of parboiled rice.
India hikes minimum support price for wheat... India increased the minimum support price for six crops, including wheat, the country’s information minister said. The minimum support price of wheat was raised by 150 rupees (7%) to 2,275 rupees ($27.33) per 100 kg to encourage farmers to expand plantings as New Delhi tries to increase production. As of Oct. 1, wheat stocks in government warehouses stood at 24 MMT, down sharply compared with the five-year average of 37.6 MMT.
Timing of farm bill discussed at CIPA event... Dr. Joe Outlaw of Texas A&M University on Tuesday told the Crop Insurance Professionals Association (CIPA) there is a lack of decision-making and agreement among key lawmakers in the farm bill process, which is hindering progress. He expressed doubt a farm bill will be passed this year but remains somewhat optimistic about the possibility for early next year, though he stressed if it goes past February, it will confront presidential politics via primaries, etc.
USDA to move up corn, soybean and wheat acreage adjustments to August crop report... USDA will permanently include updated acreage estimates for wheat as well as corn, soybeans and several other crops in its monthly U.S. crop production reports every August, earlier than in past years, the agency announced at its data users meeting on Tuesday. USDA will update acreage data for corn and soybeans again in its September reports, and update canola and sunflower acreage in October. USDA also said it won’t roll out its new weekly export sales reporting system until spring 2024 at the earliest.
China’s Q3 GDP tops expectations... China’s economy grew 4.9% versus year-ago during the third quarter, beating market forecasts of 4.4%. That was down from growth of 6.3% in the second quarter, but offered hopes it will meet the official annual target of around 5% this year, as sustained stimulus from Beijing offset the impact of a prolonged property crisis and weak trade.
China’s industrial output steady, but retail sales increase... China’s industrial production growth was unchanged at 4.5% above year-ago in September, maintaining the highest reading since April and slightly exceeding market forecasts of 4.3%. China’s retail sales climbed 5.5% from year-ago in September, accelerating from a 4.6% gain the prior month and exceeding market estimates of 4.9%. That was the largest monthly increase since May.
China pork imports plunge vs. year-ago in September... China imported 110,000 MT of pork during September, equal to the amount it brought in during August but 31.7% less than last year. Pork imports through the first nine months of this year totaled 1.27 MMT, up 4.4% from the same period last year.
China’s Q3 pork output soars... China’s pork output in the third quarter rose 4.8% from year-ago to 12.69 MMT, the highest for the quarter in at least a decade. Pork output in the first nine months of this year rose 3.6% from the same period last year to 43.01 MMT. China’s hog herd rose to 442.29 million head at the end of September, up 7.12 million head (1.6%) from the previous quarter, but down 0.4% from last year.
Wholesale beef market strengthens... Choice boxed beef prices firmed 47 cents on Tuesday and Select rose $1.43, while packers moved a strong 153 loads of product. Key will be whether packers can push prices higher and maintain movement, as retailers have been selective buyers much above $300.00 for Choice and $275.00 for Select.
Seasonal hog weakness builds... The CME lean hog index is down another 45 cents to $81.15 (as of Oct. 16). The pork cutout value fell $1.67 on Tuesday to $89.55. While the buildup in hog supplies hasn’t been overwhelming, both the cash and product markets continue to face seasonal pressure.
Overnight demand news... Taiwan buys 65,000 MT of corn expected to be sourced from Brazil. South Korea purchased 60,000 MT of optional origin feed 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 10:00 a.m. Fruit and Tree Nuts Data — ERS
- 10:00 a.m. Vegetables and Pulses Data — ERS
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: October 2023 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: October 2023 — ERS
- 2:00 p.m. Broiler Hatchery — NASS
