First Thing Today | October 24, 2023

Good morning!

Corn and wheat weaker, beans firmer this morning... Corn faced followthrough selling overnight, while wheat more than erased Monday’s modest gains. Soybeans posted two-sided trade. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are around a penny higher, SRW wheat futures are 5 to 6 cents lower, HRW wheat is 7 to 9 cents lower and HRS wheat is 3 to 4 cents lower. Front-month crude oil futures are modestly firmer, while the U.S. dollar index is nearly 350 points higher.

Focus remains on House GOP leadership... There is guarded optimism that House Republicans will unite behind the chosen nominee after weeks of public disagreements. Lawmakers held a meeting to hear proposals from candidates who outlined their strategies for unifying the party and advancing legislative priorities, including reducing federal spending and enhancing border security. A GOP vote to select the party’s nominee is scheduled, with a full House floor vote expected in the coming days. Support seems to be coalescing around several individuals, including House Majority Whip Tom Emmer (R-Minn.), Republican Study Committee Chair Rep. Kevin Hern (R-Okla.), House Republican conference vice chair Rep. Mike Johnson (R- La.) and Byron Donalds of Florida, an ally of former President Donald Trump. The large field of now eight candidates sets the stage for an unpredictable outcome, with the possibility of multiple rounds of internal House GOP conference voting. The eventual House speaker-designate will need to secure the support of a majority in the House, requiring 217 out of 433 House votes if all members participate.

Brazil crop estimates unchanged but bias weakens... Crop consultant Dr. Michael Cordonnier left his Brazilian soybean and corn crop estimates at 162 MMT and 125 MMT, respectively, but he now has a neutral to lower bias toward both crops. Irregular rainfall across Brazil caused Cordonnier to be more cautious with his bias toward soybeans, while delayed soybean plantings could push back harvest and the planting of safrinha corn. Cordonnier left his Argentine crop estimates at 50 MMT for soybeans and 52 MMT for corn.

Crop progress report highlights… Following are highlights from USDA’s crop progress and condition update as of Oct. 22.

• Corn: 59% harvested (54% average).
• Soybeans: 76% harvested (67% average).
• Cotton: 90% bolls opening (91% average); 41% harvested (39% average); 29% good/excellent (30% last week).
• Winter wheat: 77% planted (78% average); 53% emerged (53% average).

Ukraine’s Black Sea corridor gain exports reach 700,000 MT... About 700,000 MT of grain have been exported through Ukraine’s new Black Sea export corridor since it began operating in August, the country’s ag ministry said. He said 38 ships have entered Ukrainian ports via the corridor and more than 30 have departed with grains and other goods.

Indonesia to implement new rice price measures... Indonesia will introduce new measures on rice prices to ensure affordability amid concerns of a supply crunch due to dry weather, a senior finance ministry official said. The government has approached global rice exporters to make sure supply remains available while making sure prices remain under control. Indonesia will also extend the government’s rice handout program through December.

New trading limits for grain, oilseed futures... Effective Nov. 1, the new daily trading limits will be 35 cents for corn (currently 45 cents), 95 cents for soybeans (currently $1.05) and 50 cents for SRW and HRW wheat futures (currently 60 cents). If there is a limit close, the expanded limits the following day would be 55 cents for corn, $1.45 for soybeans and 75 cents for SRW and HRW wheat.

House lawmakers launch discussion on next WRDA... House lawmakers are initiating discussions on the next Water Resources Development Act (WRDA), a legislative framework that authorizes water-related projects managed by the Army Corps of Engineers. The discussion is scheduled to take place today during a planned House Transportation and Infrastructure subcommittee hearing. The hearing will feature appearances from key figures, including Assistant Secretary of the Army for Civil Works Michael L. Connor and Lt. Gen. Scott A. Spellmon, who serves as the Corps’ commanding general and chief of engineers. They will provide insights into past WRDAs and discuss the requirements and priorities for future legislation in this domain.

China’s gov’t land sales revenue continues to drop... China’s government land sales revenue fell for a 21st month in September, data from the finance ministry showed. Land sales revenues in September fell 21.3% from a year earlier, after falling 22.2% the previous month. For the first nine months of the year, sales dropped 19.8% from a year earlier to 3.0875 trillion yuan ($422.42 billion).

Euro zone October PMI at near 3-year low, stirring recession worries... HCOB’s flash euro zone composite purchasing managers index (PMI) compiled by S&P Global fell to 46.5 in October from September’s 47.2. That was the fifth consecutive month of falling business activity and its lowest since November 2020. In Germany, Europe’s largest economy, business activity contracted there for a fourth straight month.

USDA releases study on agriculture and forestry's role in U.S. carbon markets... USDA published a report titled “A General Assessment of the Role of Agriculture and Forestry in the U.S. Carbon Markets.” This report, part of the USDA’s commitments under the Growing Climate Solutions Act (GCSA), provides an examination of current market activity, identifies barriers preventing farmer and forest landowner participation in carbon markets and highlights opportunities for improvement. While recognizing the potential for agriculture and forestry to combat climate change, the report also sheds light on challenges, including high transaction costs.

Key day for cattle futures... Monday’s hefty selloff in live cattle futures did major technical damage. Additional heavy selling today would completely flip the script and give bears the strong upper hand. But if buyers show up under the market it would suggest yesterday’s price action was an overdone bearish reaction. Volatility could be extreme as daily price limits expand to $10.00 for live cattle and $12.25 for feeders today.

Cash hogs drop, pork cutout firms... The CME lean hog index is down another 72 cents to $79.07 (as of Oct. 20), extending the seasonal downturn. The pork cutout value firmed 58 cents on Monday, marking the second straight daily gain after an extended pullback.

Overnight demand news... Exporters reported no tenders or sales.

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

• No reports scheduled.