First Thing Today | January 26, 2024
Good morning!
Grains weaker overnight... Corn and soybeans faced followthrough selling overnight, while wheat retreated from recent gains. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are 4 to 5 cents lower, SRW wheat is mostly 6 cents lower, HRW wheat is 4 to 9 cents lower and spring wheat is mostly a nickel lower. Front-month crude oil futures are around 75 cents lower and the U.S. dollar index is nearly 300 points lower.
More grain ships diverted from Red Sea... More ships carrying grain were diverted from the Suez Canal to sailings around the Cape of Good Hope this week after attacks on vessels in the Red Sea, shipping analysts said. “Another 16 vessels were confirmed diverted this week, taking the total grain cargoes diverted to some 3.9 million tons, up from 3.0 million tons last week, Ishan Bhanu, lead agricultural commodities analyst at data provider Kpler, told Reuters. “Many of the diverted ships are carrying U.S. grain cargoes showing caution with this freight,” Bhanu said. About 7 million metric tons of grain cargoes normally transit the Suez Canal into the Red Sea each month.
China presses Iran to rein in Houthi attacks in Red Sea... Chinese officials have asked their Iranian counterparts to help rein in attacks on ships in the Red Sea by the Iran-backed Houthis, or risk harming business relations with Beijing, four Iranian sources and a diplomat familiar with the matter told Reuters. The discussions about the attacks and trade between China and Iran took place at several recent meetings in Beijing and Tehran, the Iranian sources said. However, the Chinese officials did not make any specific comments or threats about how Beijing’s trading relationship with Iran could be affected if its interests were damaged by Houthi attacks, the Iranian sources said.
Strong demand, limited supplies raise Ukrainian wheat prices... Strong export demand and insufficient supply from farmers have pushed up Ukrainian food wheat prices this week, analyst APK-Inform said. It said the prices for second class food wheat had risen by $7.90 to $13.20 per MT versus the previous week, reaching $179.80 to $203.50 per MT CPT (Carriage Paid To). “It is worth noting that even at the highest prices, there were almost no offers,” APK-Inform said.
Yellen: Biden economic agenda isn’t finished... Treasury Secretary Janet Yellen said the Biden administration’s economic agenda isn’t finished. Funds for infrastructure, energy and manufacturing are still being distributed, and the White House still aims to expand child care, tuition-free community college, affordable housing and other initiatives.
China equity funds draw largest weekly inflows since 2015... Investors poured almost $12 billion into Chinese equity funds in the week ended Jan. 24, the largest inflow since 2015 and the second largest ever, a BofA Global Research report showed. A sharp fall in Chinese property stocks made China “the world’s most enticing contrarian long ‘trade,’” BofA analysts said, noting: “No one believes it’s an ‘investment.’”
China’s hog herd declines notably... China’s pig herd at the end of 2023 fell declined 1.8% from the previous quarter and 4.1% from a year ago to 434.22 million head, the ag ministry said. The sow herd dropped 2.3% from the previous quarter and 5.7% from last year to 41.42 million head.
Cash cattle prices strengthen... After initial trade at $1.00 higher prices on Wednesday, cash cattle traded mostly $2.00 higher yesterday. Cash sources indicated the bulk of trade was completed in the Southern Plains, while there could still be some cleanup sales in the northern market.
Cash hogs continue to climb, pork pauses... The CME lean hog index firmed another 28 cents to $69.67 (as of Jan. 24), extending the string of gains off the seasonal low to start the month. February lean hog futures finished Thursday $4.63 above today’s cash quote. The pork cutout value firmed a nickel to $88.91. After poking above $90.00 on Monday, the cutout value has settled in the upper-$80.00 range.
Overnight demand news... The Philippines tendered to buy up to 96,000 MT of optional origin feed 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
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS
- 2:30 p.m. Commitments of Traders — CFTC
