First Thing Today | November 9, 2023

Good morning!

Quiet trade overnight ahead of USDA's November crop reports... Soybean futures failed to sustain followthrough buying overnight and have turned narrowly mixed this morning. Corn and wheat traded lower throughout overnight trade. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents lower, soybeans are fractionally lower to 3 cents higher, SRW wheat futures are 6 to 7 cents lower, HRW wheat is mostly 4 cents lower and HRS wheat is 2 to 4 cents lower. Front-month crude oil futures are around 50 cents higher and the U.S. dollar index is modestly firmer this morning.

November crop reports out later this morning... USDA’s corn and soybean crop estimates aren’t likely to change much in the Crop Production Report at 11:00 a.m. CT. The average pre-report estimates peg corn production at 15.079 billion bu. (15.064 billion bu. in October) and the soybean crop at 4.103 billion bushels (4.104 billion bu. in October). Barring any supply-side surprises, adjustments to usage forecasts in the 2023-24 balance sheets are also likely to be minor. Traders expect 2023-24 ending stocks to come in at 2.129 billion bu. for corn (2.111 billion bu. in October), 221 million bu. for soybeans (220 million bu. in October) and 669 million bu. for wheat (670 million bu. in October). Given El Niño impacts, the potentially biggest changes could be to USDA’s global production forecasts.

Reuters: China makes more U.S. soybean purchases... Chinese importers bought at least five more U.S. soybean cargoes (around 300,000 MT) on Wednesday in a second day of active buying after booking their largest purchases in months a day earlier, two U.S. exporters familiar with the deals told Reuters. The flurry of Chinese buying of U.S. soybeans comes amid increasing crop concerns in Brazil.

Brazil raises soybean crop, cuts corn production... Conab raised its official 2023-24 Brazilian soybean crop forecast by 417,000 MT to a record 162.42 MMT, despite erratic weather through the first two months of the growing season, as its planted area estimate increased. Conab cut its corn crop forecast by 338,000 MT to 119.07 MMT. The corn crop forecast is based off an estimate for the first crop (about one-quarter of total production) and a projection for the safrinha crop (about three-quarters of total production).

Weekly Export Sales Report out this morning... For the week ended Nov. 2, traders expect:

China cuts soybean, cotton production estimates... China’s ag ministry cut the country’s soybean production estimate by 570,000 MT from last month to 20.89 MMT. That would still be up 600,000 MT (3.0%) from last year. The ministry cut the cotton crop estimate by 100,000 MT to 5.68 MMT, which would now be down 300,000 MT (5.0%) from last year. The ministry made no changes to its 2023-24 import forecasts for corn, soybeans or cotton.

Ukraine says export corridor remains operational... Ukraine remains steadfast in asserting that its export corridor in the Black Sea is operational, despite yesterday’s attack by Russia on a civilian vessel. Deputy Prime Minister Oleksandr Kubrakov conveyed through social media platform X that vessel traffic continues to flow both to and from the ports in the Big Odesa region. He highlighted that six vessels carrying 231,000 MT of agricultural products had departed the region and were enroute to the Bosphorus Strait. Furthermore, there were five additional vessels awaiting entry to ports for loading. Kubrakov said since August, 91 vessels carrying 3.3 MMT of agricultural and metals products have traversed the humanitarian corridor.

Russia seeking new routes for wheat, fertilizer exports... Russian President Vladimir Putin called for the development transport routes in Asia during a visit to Kazakhstan on Thursday, as Russia seeks to forge new export routes for its wheat and fertilizer due to Western sanctions. Putin said Russia would have about 60 MMT of wheat available for exports from this year’s crop. He called for further development of shipping routes to large Asian markets such as China and India.

China deflation concerns resurface as consumer prices fall... China’s consumer prices dropped 0.2% from year-ago in October, compared with a flat reading in the prior month. Food prices declined 4.0%, the most in 25 months, falling for the fourth straight month due to a 30% plunge in pork prices. Non-food inflation was unchanged at 0.7%. China’s producer prices declined 2.6% in October, the 13th consecutive month of producer deflation.

Choice beef below $300... Choice boxed beef prices fell $1.63 on Wednesday to $298.75. The last time Choice beef fell below $300.00 in early October it only stayed there for two days and sparked a fresh wave of retailer buying. Select beef firmed $1.55 yesterday, though it’s still around $4.00 below the previous value level at $275.00.

Cash hog index firms again... The CME lean hog index is up 42 cents to $76.69 (as of Nov. 7), marking back-to-back days of price gains. After a $1.40 decline on Wednesday, December hog futures finished at a $5.19 discount to today’s cash quote.

Overnight demand news... Japan purchased 108,890 MT of milling wheat in its weekly tender, including 23,590 MT U.S., 57,600 MT Canadian and 27,700 MT Australian. South Korea purchased 97,060 MT of U.S. rice, though the volume could increase as other offers are still be considered.

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

• 7:30 a.m. Weekly Export Sales — FAS
• 11:00 a.m. WASDE — WAOB
• 11:00 a.m. Crop Production — NASS
• 11:00 a.m. Cotton Ginnings — NASS
• 11:15 a.m. Cotton: World Markets and Trade — FAS
• 11:15 a.m. Grains: World Markets and Trade — FAS
• 11:15 a.m. Oilseeds: World Markets and Trade — FAS
• 11:15 a.m. World Agricultural Production — FAS
• 2:00 p.m. U.S. Agricultural Trade Data Update — ERS
• 2:00 p.m. Peanut Prices — NASS