First Thing Today | January 4, 2024
Good morning!
Grains favor downside in quiet overnight trade... Corn, soybeans and wheat traded in narrow ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans are 2 to 3 cents lower, winter wheat markets are 3 to 4 cents lower and spring wheat is around a penny lower. Front-month crude oil futures are about 85 cents higher and the U.S. dollar index is about 180 points lower this morning.
Export sales pushed back to Friday... Due to Monday’s government holiday, export sales data for the week ended Dec. 28 will be released Friday morning.
U.S., allies issue final warning to Houthi rebels over Red Sea vessel attacks... This warning comes after at least 23 attacks by Houthi rebels in the Red Sea region occurred since Dec. 19. The countries, including the U.S., Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, Singapore and the UK, have conveyed that this warning should be considered the final one. While a senior U.S. official did not specify what actions might be taken, he emphasized the Houthis should not expect another warning. The joint statement from these nations calls for an immediate end to these unlawful attacks, as well as the release of unlawfully detained vessels and crews. It also warns the Houthis they will be held responsible for any consequences should they persist in threatening lives, the global economy and the free flow of commerce in the critical waterways of the region. U.S. officials have emphasized that any potential action would be undertaken in a cautious manner to avoid escalating tensions with Iran or other parties involved in the region.
Smaller Thai rice exports expected... Thailand expects to export 7.5 MMT of rice this year, the Thai Rice Exporters Association said. That would be down 1 MMT (11.8%) from last year.
Indonesia raises industrial sugar import quota... Indonesia set this year’s sugar import quota at 4.77 MMT for industrial use, a trade ministry official said, up from 3.6 MMT in 2023. The sugar import quota for household use is set at 708,609 MT in 2024, compared with last year’s 991,000 MT level.
Congressional leaders ‘quite close’ to funding level agreement, but… Senate Majority Leader Chuck Schumer (D-N.Y.) said he and House Speaker Mike Johnson (R-La.) are “quite close” to a deal for top-line spending, which would be the first step toward keeping money flowing for government operations after an initial Jan. 19 funding deadline for some departments, including USDA. One option is to continue providing funding at the existing levels until the end of the current fiscal year, without implementing sequestration measures. This approach would act as a year-long continuing resolution (CR), even though it would be treated as a new appropriation. But some lawmakers have cautioned against a strategy that merely maintains spending at its current levels, suggesting a desire for adjustments or changes in the budget. Of note: Some leading House Republicans are now pushing border security language as part of any funding measure.
China emphasizes commitment to advancing ag technology... China will use “all strengths” to accelerate the advancement and use of agricultural technology to secure higher productivity and a stable supply of crops, the agriculture ministry said. “It is necessary to intensify the application of research and development, leave no stone unturned to accelerate high-yield and high-oil soybeans, breakthrough in core technologies such as agricultural machinery in hilly and mountainous areas, and integrate and strengthen the application of technologies,” the ministry said. Beijing will promptly establish a scientific and technological innovation strategic advisory committee to provide decision-making consultation on major ag technology strategies, plans and policies, it said.
China targets better integration of EVs, grids to manage power demand... China’s state planner has issued new rules on strengthening the integration of electric vehicles (EVs) with the electric grid, as it aims to manage its power demand amid a transition to renewable energy. China’s National Development and Reform Commission called for the creation of initial technical standards governing new energy vehicle integration into the grid by 2025. New energy vehicles will become an important part of the country’s energy storage system by 2030, it said. Charging during off-peak hours as well as
“vehicle-to-grid” charging, where millions of EV owners could sell their EV batteries’ juice back to grid operators during peak hours, have been seen as potential solutions.
China expands nuclear power while U.S. lags... China has been significantly expanding its nuclear power capacity by adding 37 new reactors in the last decade, making it the world’s second-largest economy in this regard. In contrast, the U.S. has been closing older nuclear power plants and has been slow to build new ones. Over the past 30 years, only one new nuclear power plant has been opened in the United States. This divergence in nuclear power development is due to concerns about safety and costs associated with nuclear energy in the U.S., while China has been aggressively pursuing nuclear energy as part of its energy strategy, according to the Washington Times.
Early signs point to another rise in cash cattle prices... Initial cash cattle trade started around $175.00 in the far northern market. While volume was light, that suggests the broader tone in cash cattle trade will be higher for a third straight week. February live cattle futures finished Wednesday 39 cents below last week’s average cash price of $172.24.
Cash hog index ticks up... The CME lean hog index rose 14 cents to $65.19 (as of Jan. 2). It will take more than one modest daily price gain to convince traders the seasonal low is in place, though this could trigger some buyer interest. February lean hog futures finished Wednesday at an 11-cent premium to the cash index.
Overnight demand news... South Korea purchased 68,000 MT of corn expected to be sourced from the U.S., South America or South Africa and tendered to buy 50,000 MT of U.S. 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
- 9:30 a.m. Weekly Ethanol Production — EIA
