First Thing Today | September 23, 2022

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Good morning!

Heavy pressure on grain, soy markets overnight... Outside markets weighed heavily on the grain and soy complex overnight as the U.S. dollar strengthened to a fresh 20-year high and front-month crude oil dropped to near $80.00. As of 6:30 a.m. CT, corn futures are trading mostly 9 cents lower, soybeans are 10 to 12 cents lower, SRW wheat is 14 to 16 cents lower, HRW wheat is 10 to 12 cents lower and HRS wheat is mostly a dime lower. Front-month crude oil futures are around $2.75 lower an the U.S. dollar index is more than 900 points higher.

Currency devaluation helps spur Argentine soy exports... Argentina devalued its peso earlier this month to spur soy exports, and it’s helped, according to Bloomberg. China booked as much as 3 MMT in the past two weeks, almost as much as the roughly 3.75 MMT it imported from Argentina all of last year, Bloomberg reported, citing people familiar with the matter.

U.K. unveils biggest tax cuts since 1970s, sending pound lower... Kwasi Kwarteng, Britain’s finance minister, unveiled a “mini-budget” designed to boost growth through tax cuts and increased government spending. The pound, which had already fallen by nearly a fifth this year against the dollar, slid another 1.5% Friday to $1.110, hitting a fresh 37-year low. U.K. borrowing costs rose quickly, with yields on both short-term and longer-term government bonds shooting up by more than a third of a percentage point, a massive jump in bond-market terms. The 10-year U.K. government bond yielded 3.8%, shooting higher than the U.S. equivalent for the first time in several years.

Voting begins for Russia’s annexation of four regions in Ukraine... Polling stations opened in four Russian-controlled parts of Ukraine, with residents given until next Tuesday to vote on whether they want to officially join Russia. Both the Ukrainian government and Western leaders have declared the referendums are illegitimate and an excuse for annexation — they plan to ignore the results. Ukrainian authorities claim the Russians’ own polling suggests that no more than 10% of the population will turn out. Ukraine is urging its citizens not to take part, and for adult men to leave the regions in question — to avoid being mobilized against their own country.

Medvedev: Strategic nuclear weapons can be used to defend annexed Ukrainian territory... “The Western establishment and all citizens of NATO countries in general need to understand that Russia has chosen its own path,” Medvedev said. Medvedev, who also serves as deputy chairman of Russia’s Security Council, said that referendums planned by Russian-installed and separatist authorities in large swathes of Ukrainian territory will take place, and “there is no going back. Therefore, various retired idiots with generals’ stripes do not need to scare us with talk about a NATO strike on Crimea,” Medvedev wrote on Telegram. “Hypersonic [missiles] are guaranteed to be able to reach targets in Europe and the United States much faster.”

Russian wheat export tax drops again... Russia’s wheat export tax for Sept. 28-Oct. 4 will be 2,476.6 rubles ($42.39) per metric ton based on an indicative price of $308.20. That’s down from a rate of 2,668.3 rubles per metric ton the previous week and the seventh straight weekly decline. Despite a record crop this year, Russia’s wheat exports have been slower than average, due partly to the restrictive export tax.

Severe drought impacting south and central China lingers... Since July 1, the National Meteorological Center has issued drought warnings for more than 40 days. Tuesday marked its 34th consecutive day of drought warnings. The drought spans at least 13 provinces and regions, including key grain-producing provinces Anhui, Henan, Jiangxi, and Hunan. But the grain harvest is going well so far, a rural expert at the Chinese Academy of Social Sciences told the Global Times. It says: With roughly 20% of the fall harvest completed in the Yangtze River region, the drought’s impact appears “limited.” Says China-watcher Trivium China: “Beijing has directed a massive relief package to farmers in the region — but if the drought doesn’t break in the next month or two, there’s no amount of cash that can bail out next spring’s harvest.

China continues soybean auctions... China will auction another 500,000 MT of imported soybeans from state-owned reserves on Sept. 30. China has been selling state-owned soybean stockpiles onto the domestic market on a regular basis since March.

Big increase in Indian palm oil imports... India’s palm oil imports could jump 23% in 2022-23 to an eight-year high of 9.5 MMT, as a rebound in consumption and competitive prices prompt refiners to increase purchases, the country’s top palm oil buyer said. Palm oil is offered at $950 per MT including cost, insurance and freight (CIF) to India for October shipment, compared with $1,250 for crude soyoil, according to traders.

USDA to hold listening sessions on farm labor pilot program... USDA will hold several public listening sessions on a pilot program aimed at stabilizing farm labor via a pilot program to address immigration issues. USDA said the pilot program seeks to address issues in the agricultural supply chain by looking at “current labor shortages in agriculture, reducing irregular migration through increased use of legal pathways, and improving labor protections for farmworkers.” Two sessions will take place Sept. 28 for employer organizations and labor unions with a third session for farmworker advocacy organizations on Sept. 29. USDA is also seeking public comment on the effort, with comments due Oct. 24.

China pork price eases... China’s average pork price slipped 0.3% during the week ended Sept. 16 to 30.61 yuan ($4.38) per kilogram, though that was still 77.9% above year-ago. China is selling state-owned frozen pork reserves onto the domestic market in an attempt to tame prices ahead of the upcoming holiday season.

Beef, pork stocks imply strong demand... USDA’s Cold Storage Report showed both beef and pork stocks climbed seasonally during August, though less than average. The smaller-than-normal rise in frozen meat stocks came despite hefty monthly increases in beef and pork production, implying demand was strong and outpaced supplies.

Placements key in Cattle on Feed Report... USDA’s Cattle on Feed Report this afternoon is expected to show the Sept. 1 feedlot inventory in line with year-ago at 11.2 million head. Placements are expected to be down 2.7% from year-ago, though the range of estimates is from 93.2% to 100.9%. August marketings are expected to be up 5.9% from year-ago.

Traders take bearish stance on cattle... Live cattle futures finished moderately to sharply lower and low-range yesterday even with strengthening cash cattle prices and a bullish long-term price outlook. After posting contract highs on Tuesday, sellers reemerged in futures, signaling traders are cautious, despite bullish fundamentals.

Cash hog index firms... The CME lean hog index ended a two-day slide by rising 5 cents to $98.01 (as of Sept. 21). While the cash index has stabilized after a sharp drop the previous five weeks, October lean hog futures finished Thursday $3.885 below today’s cash quote, suggesting traders anticipate price pressure to develop over the next three weeks before the lead contract expires.

Overnight demand news... The Philippines purchased 45,000 MT of Australian 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

Today’s reports


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