Chinese PPI Surges | November 10, 2021
Soybean futures were unable to find sustained followthrough buying overnight after Tuesday’s strong price rebound. Corn futures extended their gains but failed to clear yesterday’s highs. Wheat futures were mostly firmer overnight, though buyer interest in HRW contracts is easing this morning. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents higher, soybeans are 1 to 2 cents lower, SRW wheat is around a penny higher, HRW wheat is fractionally to a penny lower and HRS futures are mostly 3 to 4 cents higher. Front-month crude oil futures are around 75 cents lower and the U.S. dollar index is about 325 points higher.
China’s producer price index (PPI) surged 13.5% from a year earlier in October, matching the highest factory-gate inflation since 1995, as energy prices soared last month. China’s consumer price index (CPI) rose 1.5% versus year-ago in October, the highest figure since September 2020.
Chinese President Xi Jinping says Beijing is willing to “enhance exchanges and cooperation across the board” with the U.S. ahead of a virtual meeting with President Joe Biden planned for as soon as next week. Xi's statements signal a possible easing of tensions between the two countries.
Starting Nov. 15, ocean carrier companies that brought idling containers in will be charged $100 on the first day past deadline, $200 on the next, and so on — an escalating fine that could quickly mount for the thousands of containers on the docks. Plans for the fine seem to be making a difference. The number of containers subject to the fine is down 26% at Long Beach.
The White House on Tuesday announced “a set of concrete steps to accelerate investment in our ports, waterways, and freight networks.” It also announced the U.S. Department of Transportation will allow port authorities across the country to redirect project cost savings toward tackling supply-chain challenges.
USDA raised its 2021 average cash steer price forecast by a quarter from last month to $121.31, which would be up $12.80 from last year. For 2022, USDA increased its cash price forecast by $1 to an average of $130.
After packers increased cattle bids twice last week, feedlots are seeking higher prices for this week’s supplies. But most packers have yet to establish bids after buying a lot of cattle last week.
The pork cutout value dropped $2.31 on Tuesday and is down $7.89 since a brief uptick last Tuesday and Wednesday. The CME lean hog index is down 6 cents today, ending a modest recovery the past two days. Given weak cash fundamentals, buyer interest in December hog futures will be limited.
