First Thing Today | December 31, 2021

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Good morning!

Quiet overnight trade... Corn, soybeans and wheat traded both side of unchanged in light price action to kick off the last trading day of the year. As of 6:30 a.m. CT, soybeans are mostly 2 to 3 cents higher, corn is fractionally to a penny lower in most contracts, SRW wheat futures are 2 to 4 cents lower, HRW wheat is fractionally to a penny lower and HRS wheat is mostly 3 to 5 cents higher. Front-month crude oil futures are more than $1.50 lower and the U.S. dollar index is near unchanged.  

Happy New Year from Pro Farmer... Grain and livestock markets will trade normal hours today, but government offices are closed for the New Year’s holiday. Pro Farmer wishes you a safe New Year’s celebration and a prosperous 2022.

First notice day for January soy futures... Today marks the start of the delivery process for January soy futures. CME Group reported deliveries of 244 contracts against January soybeans, no deliveries against January soymeal and 36 deliveries against January soyoil.

China warns Walmart, Sam’s Club over Xinjiang products... China’s anti-graft agency on Friday accused U.S. retail giant Walmart and its Sam’s Club chain of “stupidity and short-sightedness” after Chinese news outlets reported Sam’s Club had removed Xinjiang-sourced products from stores. China’s Central Commission for Discipline Inspection (CCDI) accused Sam’s Club of boycotting Xinjiang products and trying to “muddle through” the controversy over Beijing’s treatment of Uyghurs and other minority Muslims in Xinjiang by remaining silent. “To take down all products from a region without a valid reason hides an ulterior motive, reveals stupidity and short-sightedness, and will surely have its own bad consequences,” it said on its website.

China to cut subsidies for new energy vehicles by 30% in 2022... China will cut its subsidies for new energy vehicles (NEVs), such as electric cars, by 30% next year, the Finance Ministry said on Friday. The ministry said the NEV subsidy policy will end on Dec. 31, 2022, and NEVs will not be subsidized thereafter. China, the world’s largest auto market, has set a target for NEVs, including electric hybrids and hydrogen fuel cell vehicles, to account for 20% of car sales by 2025.

PBOC issues guidelines to guard against systemic financial risks... The People’s Bank of China (PBOC) issued guidelines for macro prudential assessments, with the aim of establishing a basic framework and enhancing transparency to guard against systemic financial risks. It says key areas for the monitoring of systemic risks include China's macro leverage ratio, debt levels and the repayment abilities of government departments as well as companies.

China’s sow herd grows 4.7% from last year... China’s sow herd at the end of November was 4.7% higher than the previous year at 42.96 million head, the country’s ag ministry reported, though down 1.2% from October. China slaughtered 235.9 million hogs in the first 11 months of 2021, up 66.1% from the same period the previous year, amid rapid expansion of the hog herd after the African swine fever outbreak. Rising output and oversupply have caused pork prices to plunge this year and pushed hog margins to negative territory.

Cash cattle prices rise further... Packers increased cash cattle bids as they rebuilt slaughter supplies for next week’s full schedule after two holiday weeks. Cash sources signal this week’s average price could top the $140.44 mark posted the first week of December, as prices were as high at $142.50 in some locations yesterday.

Hog futures have big premiums to cash index... February lean futures finished Thursday at $82.70, $10.95 above where the cash index is quoted today. That’s an optimistic stance by traders heading into the new year, as the five-year average increase in the cash index from the end of the year through mid-February was $7. There’s currently around a $16 premium in June hogs compared with the February contract, whereas the five-year average was around $10.

Overnight demand news... Jordan tendered to buy 120,000 MT of optional origin milling wheat.

Today’s reports

  • No reports – Gov’t closed for New Year’s Day holiday

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