First Thing Today | December 4, 2023
Good morning!
Corn and beans weaker, wheat mostly firmer this morning... Corn and soybeans traded lower through the overnight session, while wheat firmed this morning after earlier losses. As of 6:30 a.m. CT, corn futures are trading mostly 1 to 2 cents lower, soybeans are 6 to 9 cents lower, SRW wheat is 2 to 3 cents higher, HRW wheat is fractionally higher and HRS wheat is steady to fractionally higher. Front-month crude oil futures are modestly weaker, while the U.S. dollar index is mildly firmer.
AgRural cuts Brazilian soybean crop estimate... Due to damage caused by irregular rainfall and heat primarily in Mato Grosso, AgRural cut its Brazilian soybean crop estimate by 4.4 MMT to 159.1 MMT. If the hot and dry conditions persist, the firm says additional cuts to crop size would be likely. AgRural estimated soybean planting was 85% done as of last Thursday, behind 91% on this date last year.
South American weather update... Rain will be erratic and lighter than usual in most of center-west, northeast and northern parts of center-south Brazil over the next 10 days, although completely dry weather is not expected. World Weather Inc. says daily rainfall should be sufficient to slow drying rates and maintain status-quo conditions in the driest areas. Rainfall in the second half of December “may increase” as the dominating high pressure system aloft weakens and begins to dissipate. Regular rains will continue in southern Brazil, leaving some areas too wet. Argentina’s weather will remain mostly favorable, with alternating periods of rain and sunshine.
Geopolitical focus rises in Middle East... An American warship and two commercial vessels were attacked in the Red Sea on Sunday, the Pentagon said, a possible major increase in aggression in Middle Eastern waters, where Iran-backed Yemeni rebels have escalated attacks on Western and Israeli-linked ships. A U.S. Defense official said a U.S. warship shot down Houthi drones, responding to the ballistic missile attack. A U.S. military official also confirmed a “self-defense strike on an imminent threat” that targeted a drone staging site near the northern Iraq city of Kirkuk on Sunday afternoon.
Gold hits record high overnight... Gold, considered a safe-haven asset, reached a record high overnight, with February Comex futures hitting an intraday peak of $2,152.30 per ounce. Prices have slightly retreated from these highs just before the start of the New York trading session.
Bigger Canadian wheat, canola crop estimates expected... Traders expect Statistics Canada at 7:30 a.m. CT to estimate Canadian all wheat production at 31.1 MMT, which would be up from its September forecast of 29.8 MMT. Canada’s canola production is expected to come in at 18.3 MMT, which would be up from the prior forecast of 17.4 MMT.
The week ahead in Washington... It will be another week with the same unsettled congressional issues on (1) Fiscal year (FY) 2024 appropriations; (2) Supplemental aid to Ukraine, Israel and Taiwan; (3) Border security and funding; (4) Federal Aviation Administration reauthorization; (5) Section 702 (FISA) reauthorization and reform; and (6) National Defense Authorization Act. Senate Majority Leader Chuck Schumer (D-N.Y.) told Democrats to be ready for a vote on President Joe Biden’s supplemental bill, likely to occur on Wednesday or Thursday. To pave the way for this vote, Schumer is expected to act today or Tuesday to initiate a vote aimed at overcoming a filibuster, although it’s anticipated Republicans will block this move. Nevertheless, some senators are in favor of this course of action. Key economic data this week will be the employment report for November on Friday. The focus for agriculture will be Friday’s USDA crop reports, though there will be no updates to corn and soybean production this month and changes to 2023-24 usage forecasts are expected to be limited.
Stormy debate at COP28 climate summit... Climate scientists are expressing strong discontent after Sultan Al Jaber, the president of the COP28 climate summit, made a statement claiming there is “no science” supporting the necessity of phasing out fossil fuels to limit global warming to 1.5 degrees Celsius above pre-industrial levels. Opponents say this assertion contradicts scientific reports that emphasize the urgent need to rapidly reduce fossil fuel usage in order to stay below the critical 1.5-degree Celsius warming threshold. Exceeding this limit could lead to greater challenges for both human societies and ecosystems to adapt to the changing climate. Sultan Al Jaber’ presidency of the COP28 summit has drawn criticism due to his dual roles as the United Arab Emirate’s climate envoy and the chairman of the board of directors of its renewable energy company, while also heading the state-owned Abu Dhabi National Oil Company.
China’s Evergrande liquidation hearing pushed to January... China Evergrande Group said it has been granted an adjournment of a court hearing into a liquidation petition to Jan. 29, giving the embattled property developer time to finalize a revamped offshore debt-restructuring plan. The decision came as the world's most indebted developer with more than $300 billion in liabilities sought adjournment unexpectedly unopposed by the petitioner’s lawyer. The petitioner surprised the court on Monday when its lawyer started proceedings saying he was “instructed not to present any argument in opposition to” adjournment.
Bipartisan lawmakers oppose USDA’s beef imports from Paraguay over disease risk... A bipartisan group of lawmakers oppose USDA’s final rule permitting beef imports from Paraguay due to concerns about the risk of foot-and-mouth disease. They argue in a letter that USDA has not met the necessary criteria to lift the ban on beef imports from Paraguay and that the department relied on outdated site visits, irrelevant inspections, and insufficient data in making this decision. Twenty-one lawmakers, led by House Agriculture members Tracey Mann (R-Kan.) and Jim Costa (D-Calif.), signed the letter to USDA Secretary Tom Vilsack.
Belgium reports bird flu outbreak on farm near French border... Belgium has reported an outbreak of highly pathogenic H5N1 avian influenza on a poultry farm in the northwestern part of the country, the World Organization for Animal Health (WOAH) said. The outbreak, the first this season, was detected in Diksmuide, not far from France.
Big beef movement... Packers are struggling to push wholesale beef prices higher, with Choice holding in the upper-$290.00 area and Select around $265.000. But spot movement was strong last week, with load counts totaling 749, including 159 loads on Friday. The increased movement suggests retailers are gearing up for year-end beef features.
Cash hog decline continues... The CME lean hog index is down 77 cents to $70.58 (as of Nov. 30), extending the seasonal price decline. December lean hog futures, which expire on Dec. 14 and are cash settled against the index on Dec. 18, finished Friday at a $1.98 discount to today’s cash quote. February lean hog futures hold a 48-cent discount to the cash index.
Weekend demand news... Algeria tendered to buy 50,000 MT of optional origin durum 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
- 7:30 a.m. Canadian Crop Production — StatsCan
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Dairy Products — NASS
