First Thing Today | December 23, 2022
Good morning!
Price strength overnight... Corn, soybeans and wheat firmed after trading lower early in the overnight and are near their highs this morning. As of 6:30 a.m. CT, corn futures are trading mostly 3 to 4 cents higher, soybeans are 4 to 6 cents higher, winter wheat futures are 5 to 7 cents higher and spring wheat is 2 to 3 cents higher. Front-month crude oil futures are around $2 higher and the U.S. dollar index is about 150 points lower this morning.
Holiday schedule; Merry Christmas from Pro Farmer... Grain and livestock markets trade normal hours today. All markets and government offices are closed Monday, Dec. 26, in observance of Christmas. As a result, there will be no Pro Farmer market reports next Monday. Grain and livestock markets will reopen at 8:30 a.m. CT on Tuesday, Dec. 27. Pro Farmer wishes you a blessed Christmas filled with joy.
Argentina’s crop condition ratings decline again... The Buenos Aires Grain Exchange rated Argentina’s soybean crop 12% good/excellent (down seven points from last week), 63% normal (up two points) and 25% poor (up five points). The exchange rated the corn crop 15% good/excellent (down two points), 59% normal (down one point) and 26% poor (up three points).
House expected to vote on omnibus gov’t spending bill today... The House is expected to vote on a massive $1.7 trillion spending bill today as lawmakers look to avoid a government shutdown before heading home for the holiday break. The Senate passed the measure Thursday, just ahead of tonight's funding deadline, along with a bill to extend the deadline by one week to provide enough time for the bill to be formally processed and sent to President Joe Biden’s desk.
Blinken thanks Turkey for work on Black Sea grain initiative... U.S. Secretary of State Antony Blinken, in a call on Thursday with Turkish Foreign Minister Mevlut Cavusoglu, thanked Ankara’s efforts to ensure continuation of the UN-brokered Black Sea grain initiative, the State Department said. The two diplomatic leaders also underscored the importance of NATO unity in supporting Ukraine’s defense against Russia’s invasion, the State Department said, adding Blinken also expressed concern over the situation in Syria.
Russian wheat export tax surges... Russia’s wheat export tax for Dec. 28-Jan. 10 will be 4,160.9 rubles ($61.09) per metric ton based on an indicative price of $312.80. That’s up sharply from a rate of 3,333.8 rubles per metric ton the previous week and the highest rate since the last week of August.
India ‘deeply engaged’ in developing GM seeds for 13 crops... Indian institutions are deeply engaged in the development of genetically modified seeds for 13 crops, including rice, wheat and sugarcane, to improve their stress tolerance, yield and quality, the government said on Friday.
India may cut fertilizer subsidy to save money... India is likely to spend less on subsidizing fertilizers as global prices fall and the government looks to narrow its budget deficit, Bloomberg News reported, citing people familiar with the matter. Officials are considering slashing the fertilizer subsidy bill to 1 trillion to 1.5 trillion rupees ($18 billion) for the 2023-24 fiscal year starting in April. That would be down from an estimated 2.2 trillion rupees this year, which overshot the initial budget as prices surged. The lower fertilizer allocation will help with India’s goal of cutting its budget deficit. The government’s spending on food, fertilizer and fuel is set to exceed the budget estimate by almost 70% this year. However, the move could challenge efforts to rein in inflation. The government uses the fertilizer subsidy to reimburse companies for selling their products to farmers at below-market prices.
McKalip confirmed as chief ag negotiator at USTR... As expected, the Senate on Thursday confirmed Doug McKalip, President Biden’s nominee to serve as Chief Agricultural Negotiator for the Office of the U.S. Trade Representative. McKalip most recently was a policy adviser at USDA. Sen. Bob Menendez (D-N.J.) had placed a hold on McKalip’s nomination over concerns about transparency at the Office of the U.S. Trade Representative, but he lifted it Wednesday after a meeting with USTR Katherine Tai. “We face many challenges and opportunities, and I am confident that Doug is the right leader to help us tackle these issues at a critical moment for America,” Tai said in a statement after the confirmation. José Emilio Esteban was also confirmed by voice vote Thursday to be the USDA’s undersecretary for food safety. This follows Wednesday’s confirmation of Alexis Taylor as USDA’s Undersecretary for Trade and Foreign Agricultural Affairs.
Beef, pork stocks follow seasonal patterns in November... USDA’s Cold Storage Report on Thursday afternoon showed beef stocks at the end of November at 521.9 million lbs., up 11.6 million lbs. from October. The five-year average during the month was a 3.5-million-lb. increase. Beef stocks rose 31.5 million lbs. (6.4%) from November 2021 and were 25.9 million lbs. (5.2%) above the five-year average. Pork stocks totaled 454.2 million lbs., down 55.5 million lbs. from October, which was slightly greater than the five-year average decline of 52.7 million lbs. during the month. Pork stocks increased 52.0 million lbs. (12.9%) from November 2021 but were 27.2 million lbs. (5.6%) below the five-year average.
Cattle on Feed, Hogs & Pigs Reports out this afternoon... USDA’s Cattle on Feed Report is expected to show the Dec. 1 feedlot inventory down 2.8% from last year, with placements anticipated to drop 4.2% and markets expected to rise 0.9%. USDA’s Hogs & Pigs Report is expected to show the U.S. hog herd contracted 1.5% from year-ago as of Dec. 1. The breeding herd is expected to be 0.2% smaller than last year, while the market hog inventory is anticipated to be down 1.6%.
Steady cash cattle prices... Light cash cattle trade occurred on Thursday, with prices around $155 in the Southern Plains and $158 in Nebraska – fully steady with last week in both locations. But packers didn’t appear eager to chase after cattle with higher bids and feedlots weren’t in a hurry to move cattle. This week’s reduced slaughters may limit the number of cattle packers buy as they try to stretch out supplies through the holiday season.
February hogs build premium to cash hog index... The CME lean hog index is down 90 cents to $79.67 (as of Dec. 21). After strong gains the past two days, February lean hog futures finished Thursday $9.38 above today’s cash quote. That likely limits additional buyer interest in the lead contract and could trigger profit-taking ahead of the extended Christmas weekend.
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. Cattle on Feed — NASS
- 2:00 p.m. Hogs and Pigs — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC
