First Thing Today | January 9, 2024
Good morning!
Mild corrective buying in grains overnight... Corn, soybeans and wheat recouped a portion of Monday’s losses during overnight trade. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are mostly 3 to 5 cents higher, SRW wheat is 3 to 4 cents higher, HRW wheat is 5 to 7 cents higher and HRS wheat is mostly 5 to 6 cents higher. Front-month crude oil futures are more than $1.50 higher and the U.S. dollar index is around 180 points higher.
Cordonnier keeps South American crop estimate unchanged... South American crop consultant Dr. Michael Cordonnier kept his Brazilian crop estimates at 151 MMT for soybeans and 117 MMT for corn as he awaits production updates from Conab and USDA later this week, along with additional soybean harvest data. He favors the downside for both crops. Cordonnier also kept his Argentine crop estimates at 50 MMT for soybeans and 53 MMT for corn, while maintaining neutral-to-higher biases.
China food security: Agricultural corruption crackdown ‘far-reaching’... The South China Morning Post reports a “corruption crackdown in the agricultural sector of a key northernmost province has ‘far-reaching’ significance when it comes to ensuring China’s food security, according to a four-part documentary series by state broadcaster CCTV.” A total of 1,011 cases of corruption have been filed and 1,367 officials in Heilongjiang province disciplined as of November, according to the second episode of the series produced by CCTV and China’s anti-corruption agency, the Central Commission for Discipline Inspection (CCDI), which aired on Sunday.
Chinese online gaming tycoon ranks as major U.S. landowner... Chinese national Chen Tianqiao, who amassed his wealth through online gaming, is now one of the most prominent non-American landowners in the United States. Chen owns a substantial 198,000 acres of timberland in Oregon, ranking him as the country’s 82nd-largest property owner, according to the Land Report. Foreign ownership of U.S. land, especially land utilized for farming, has become a politically sensitive topic in recent years, with approximately 40 million acres of American agricultural land owned by non-U.S. entities as of 2021. The country’s biggest landowner is the Emmerson family, owners of timberland empire Sierra Pacific Industries, followed by billionaires John Malone, Ted Turner and Stan Kroenke.
Red Sea freight traffic plunges... Merchandise traffic through the Bab el Mandeb Pass in the Red Sea is 46% less than since the beginning of the attacks by the Yemeni militias on Nov. 19, and 53% less than recorded on Jan. 7, 2023, according to Port Watch data. Hapag-Lloyd and Maersk said on Monday they have not entered any agreements with Iranian-backed Houthi militants to prevent their ships from being attacked in the Red Sea, denying a report saying that some shippers had started to make such deals. German logistics giant DHL Group is advising customers to take a close look at how they manage inventories as shippers switch away from the Red Sea.
USDA allocates over $203 million to boost U.S. ag exports in 2024... USDA’s Foreign Agricultural Service (FAS) announced investments totaling over $203 million for the expansion of export markets for U.S. food and agricultural products in the fiscal year (FY) 2024. The funding breakdown is as follows: $174.3 million for the Market Access Program extensively for promoting various agricultural products such as fruits, vegetables, nuts, processed goods and bulk commodities; and $27 million for the Foreign Market Development Program for generic promotion of U.S. commodities, rather than promoting specific branded products. Additionally, USDA has introduced a new program called the Regional Agricultural Promotion Program (RAPP), which complements the funds announced for FY 2024. RAPP will provide $1.2 billion to assist exporters in reaching non-traditional markets and maintaining relationships in existing markets. This initiative encourages exporters to establish and grow their presence in markets with rising demand for U.S. products.
ERP Phase 2 payments steadily rise... Payments for Phase 2 of the Emergency Relief Program (ERP) reached $874.54 million on Jan. 8, distributed among 10,218 recipients. This reflects a rise from the previous week when payments amounted to $854.57 million for 10,182 recipients. Total ERP payments have now reached $8.33 billion, with Phase 1 payouts remaining relatively stable at $7.45 billion. Of note: USDA has not released any payment data for the 2022 ERP initiative at this time.
EPA grants nearly $1 billion for low-emission school buses... EPA granted approximately $1 billion to 67 recipients to replace their school bus fleets with low-emission buses. This funding contributes to a total investment of nearly $2 billion, benefiting 280 school districts in 37 states, to support the transition to cleaner energy buses. EPA Administrator Michael Regan emphasized the positive impact of this policy, citing the enthusiasm of students experiencing their first rides on clean school buses.
Euro zone unemployment rate falls to historic low in November... The seasonally adjusted jobless rate in the euro zone reached 6.4% in November, which matched June’s historic low. This decrease was accompanied by a drop of 99,000 unemployed individuals from the previous month, bringing the total to 10.970 million. Additionally, the youth unemployment rate, representing those under 25 years old actively seeking employment, decreased to 14.5% from the previous month’s 14.8%. Among the major euro zone economies, Spain reported the highest jobless rate at 11.9%, followed by Italy at 7.5% and France at 7.3%. In contrast, Germany and the Netherlands had the lowest unemployment rates at 3.1% and 3.5%, respectively.
Weather adds uncertainty to cash cattle trade... Cash cattle prices averaged $174.01 last week, up $1.77 from the previous week and the third consecutive increase. Expectations are cash cattle will trade higher again this week, though the first major winter storm of the season across the central U.S. adds uncertainty as some plants could reduce slaughter runs, especially with margins deep in the red.
February hogs extend premium to cash index... The CME lean hog index is down 11 cents to $65.74 (as of Jan. 5), marking back-to-back mild declines after two days of gains last week. February lean hog futures finished Monday at a $4.86 premium to today’s cash quote.
Overnight demand news... South Korea purchased 135,0000 MT of corn – 67,000 MT expected to be sourced from South America and 68,000 MT expected to be sourced from the U.S., South America or South Africa. Algeria tendered to buy up to 120,000 MT of Argentine corn. Japan is seeking 89,260 MT of milling wheat in its weekly tender. Egypt tendered to buy an unspecified amount of wheat from multiple origins. Tunisia tendered to buy 50,000 MT each of optional origin durum wheat and feed barley.
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
- 2:00 p.m. Field Crops - Statistical Bulletin — NASS
- 2:00 p.m. Potatoes and Sweet Potatoes - Statistical Bulletin — NASS
- 2:00 p.m. Rice Stocks - Statistical Bulletin — NASS
- 2:00 p.m. Stocks of Grain, Oilseeds, & Hay - Statistical Bulletin — NASS
