First Thing Today | October 30, 2023
Good morning!
Beans firmer, corn and wheat lower to start the week... Soybeans have firmed this morning, while corn and wheat adopted a weaker tone following two-sided trade overnight. As of 6:30 a.m. CT, corn futures are trading a penny lower, soybeans are 3 to 4 cents higher and wheat futures are 5 to 8 cents lower. Front-month crude oil futures are more than $1.00 lower and the U.S. dollar index is modestly weaker.
Better rain chances for dry areas of Brazil... Rain prospects have improved for this week in dry areas of center-west and northeastern Brazil, according to World Weather Inc. After rains last week, growing conditions are also improved across much of Argentina. Meanwhile, southern Brazil and southern Paraguay remain excessively wet, with flooding in some areas and more rains expected this week.
Israel starts ground war against Hamas in Gaza... Israel over the weekend announced it had entered a “second stage” of its war against Hamas and on Sunday said its ground operations in Gaza would intensify. Israeli Prime Minister Benjamin Netanyahu reiterated his intent to “destroy” the militant group after its Oct. 7 attack on Israel, which killed more than 1,400 people, mostly civilians. The UN will hold an emergency meeting today, where the UAE will seek a resolution on a “humanitarian pause” in the fighting, though Israel has vowed to continue its ground raids in the coming days.
The week ahead in Washington... The Senate plans to continue work on a spending bill minibus and install an ambassador to Israel. The House is expected to take up additional spending bills this week after passing its Energy-Water measure last week. Speaker Mike Johnson (R-La.) has his sights on bringing the Legislative Branch, Interior-Environment and Transportation-HUD bills to the floor this week. That would leave four spending bills left to vote on next month. The Ag appropriations bill has a tentative House dateline for the week of Nov. 13. Whatever the final outcomes are for the House spending measure, they will differ greatly from the Senate approach (more spending in Senate versions), so hurdles are ahead. Johnson indicated his willingness to consider a short-term stopgap funding measure to keep the government funded beyond the Nov. 17 deadline set by the previous funding measure. There will be two key economic events this week. The Fed is widely expected to keep interest rates unchanged following the two-day monetary policy meeting on Wednesday. The Labor Department will release the October employment data on Friday. USDA’s first winter wheat crop condition ratings this afternoon are expected to be below normal.
Ukraine’s grain exports fall sharply... Ukraine’s grain exports in October plunged 49.1% from year-ago to 2.15 MMT, according to the country’s ag ministry. Since July 1, Ukraine has exported 8.9 MMT of grain, down 4 MMT (31.0%) from last year. That total included 4.5 MMT of wheat, 3.6 MMT of corn and 679,000 MT of barley.
Strike resolution expected to reopen vital Great Lakes to Atlantic trade route... A tentative agreement was reached to end a week-long strike by Canadian workers on the St. Lawrence Seaway, with the trade route connecting the Great Lakes to the Atlantic Ocean set to reopen today. The nonprofit company operating the Canadian side of the seaway, in conjunction with the Unifor trade union representing the workers, reached a wage deal. While the agreement awaits ratification by employees in the coming days, workers are scheduled to return to their duties today.
Russia proposes slightly bigger fertilizer export quota... Russia’s trade ministry has proposed setting the quota for export of fertilizers at 16.95 MMT from December through May, Russian news agencies reported. The June through November quota was set at 16.3 MMT.
Biden set to sign a far-reaching executive order on AI... This order represents a significant effort by the U.S. government to stimulate innovation while addressing concerns that artificial intelligence (AI) could worsen bias, displace workers and jeopardize national security. The order encompasses a wide range of issues, imposing new safety responsibilities on AI developers and urging various federal agencies to manage the risks associated with AI while assessing their own use of AI tools. Notably, it mandates that companies developing advanced AI systems conduct safety tests and share the results with the government before launching their products.
Euro zone economic sentiment slips... The economic sentiment indicator in the euro zone edged lower to 93.3 in October from 93.4 the previous month. This marked the lowest reading since November 2020, as persistent inflationary pressures within the bloc and the European Central Bank’s unprecedented policy tightening continued to exert a dampening effect on overall sentiment.
German economy slightly contracts in Q3... Germany’s economy experienced a slight contraction of 0.1% in the third quarter. This follows a modest expansion of 0.1% in the second quarter. While Europe’s largest economy has managed to steer clear of a technical recession, defined as two consecutive quarters of negative economic growth, high inflation has eroded household purchasing power.
Bulls regain footing in cattle market... Live cattle futures finished strong last Friday, as the December contract filled Monday’s downside gap on the daily chart. Cash fundamentals also strengthened as the week progressed, with packers raising cash bids late Friday in an apparent attempt to buy more cattle, while wholesale beef prices firmed 72 cents for Choice and 43 cents for Select amid movement of 134 loads on Friday.
Cash hog index continues to weaken... The CME lean hog index is down another 24 cents to $77.95 (as of Oct. 26). After strong corrective gains late last week, December lean hog futures finished Friday $7.475 below today’s cash quote. Additional buying in the lead contract is likely to be limited unless the cash index stabilizes.
Weekend demand news... Tunisia tendered to buy 100,000 MT of soft milling wheat and 50,000 MT of feed barley – both optional origin.
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
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Egg Products — NASS
- 3:00 p.m. Crop Progress — NASS
