First Thing Today | October 27, 2023
Good morning!
Corn and beans firmer, wheat mixed overnight... Soybeans recouped most of their losses the two previous days during overnight trade, while corn also traded to the upside and wheat had a varied tone. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents higher, soybeans are mostly 12 cents higher, winter wheat markets are steady to 2 cents lower and spring wheat is steady to fractionally higher. Front-month crude oil futures are about $1.50 higher and the U.S. dollar index is around 150 points higher.
Subdued reaction to U.S. strike of Iranian-backed sites in Syria... U.S. forces conducted airstrikes on two eastern Syria weapons and ammunition facilities associated with Iran’s Islamic Revolutionary Guard Corps and “affiliated groups” following attacks on U.S. personnel there and in neighboring Iraq, the Pentagon said late Thursday night. Oil prices rose on the news but other markets had a limited reaction.
Key inflation data out this morning... The Bureau of Labor Statistics will issue the personal consumption expenditures (PCE) price index for September. The Federal Reserve’s preferred inflation measure — core PCE, which excludes food and energy prices — is forecast to be up 3.7% from a year earlier, slower than the 3.9% rise in August.
Yellen: Q3 GDP signals economy headed for soft landing... Treasury Secretary Janet Yellen said U.S. third quarter economic growth of nearly 5% was a good sign the economy was headed for a soft landing but could also keep longer-dated bond yields elevated. “It’s a good strong number and shows the economy is doing well,” Yellen told Bloomberg. “What we have looks like a soft landing.” Yellen said the recent sharp rise in long-term bond yields is reflective of confidence in the U.S. economy and expectations that interest rates will be higher for longer as a result. She dismissed suggestions that higher bond yields may be due to worries about rising U.S. deficits or worries about a recession.
G7 to address supply chain resilience, economic coercion amid geopolitical tensions... Trade ministers from the Group of Seven (G7) nations are set to convene in Osaka to formulate strategies aimed at strengthening global supply chains and reducing vulnerability to economic coercion, particularly from countries like China. This gathering takes place against a backdrop of heightened geopolitical risks stemming from conflicts in the Middle East and Ukraine, as well as strained diplomatic relations marked by sanctions and trade barriers designed to bolster industrial security. Underlining the importance of supply chains, the G7 will engage in discussions with nations including India, Indonesia, Australia, Chile and Kenya. The agenda for the meeting encompasses various trade-related topics, including food security, climate change, equitable trade rules, economic coercion and supply chain resilience.
Global commerce to slow... With the global economy grappling with high inflation in the U.S. and Europe and a sluggish post-pandemic recovery in China, the World Trade Organization predicts global commerce is expected to grow at a rate significantly lower than what was forecasted six months ago.
China’s Former Premier Li Keqiang dies... Li, known for advocating economic reforms but increasingly sidelined by President Xi Jinping, has passed away at the age of 68 due to a heart attack. His death occurred just months after stepping down from his role as the nation's second-highest official. Li’s death marks the end of an era where reform-minded leaders like him faced diminishing influence in a China increasingly dominated by Xi Jinping’s leadership style and agenda.
China’s industrial profits post another gain in September... Profits at China's industrial firms rose 11.9% annually during September. While that was down from the surprising 17.2% surge in August, it suggests the sector is on better footing. For the first nine months of this year, industrial profits dropped 9% from the same period last year.
Russia cuts wheat export tax... Russia’s wheat export tax for Nov. 1-7 will be 4,923.4 rubles ($52.98) per metric ton based on an indicative price of $253.20. That’s down from a rate of 5,297.7 rubles per metric ton the previous week and the second straight weekly decline.
Indonesia conducts its first commercial flight using SAF... Indonesia flew its first commercial flight using palm oil-blended jet fuel. The palm-oil blended sustainable aviation fuel (SAF) is produced by Indonesian state energy firm PT Pertamina and seen as a way of cutting the aviation industry’s carbon footprint.
Packers raise cash cattle bids... Cash cattle trade so far this week was at solidly lower prices, though trading volume was light as most feedlots passed. Packers began raising their cash bids on Thursday, suggesting increased interest. It still appears the average cash cattle price will be lower this week, but it might not be as weak as once expected.
Cash hogs drop, pork cutout firms... The CME lean hog index is down another 22 cents to $78.19 as of Oct. 25 amid seasonally building slaughter supplies. The pork cutout value firmed $1.00 on Thursday and has shown signs of stabilizing in the $86.50 to $88.50 range.
Overnight demand news... Exporters reported no tenders or sales.
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. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS
- 2:30 p.m. Commitments of Traders — CFTC
