First Thing Today | January 3, 2023
Good morning!
No overnight grain trade... Grain and livestock markets will reopen at 8:30 a.m. CT following the extended holiday weekend. As of 6:30 a.m. CT, front-month crude oil futures are trading around 75 cents lower and the U.S. dollar index is about 1,200 points higher.
Weekend rains in Argentina, but dry outlook... Argentina received some much-needed rainfall during the holiday weekend, offering some short-term relief to dryness, but the forecast calls for mostly dry and hot weather over the next 10 days, which will increase crop stress. Brazil will continue to see favorable weather during the next two weeks. There are some pockets of dryness in far southern Brazil and too-wet conditions in some northern areas, but overall, World Weather Inc. says growing conditions remain mostly favorable.
Mild slowdown expected in soy, corn crush for November... USDA this afternoon is expected to report November soybean crush totaled 190 million bu., according to a Bloomberg survey. That would be down 3.5% from October and 0.1% below year-ago. Corn-for-ethanol use is expected to be 448.7 million bu., down marginally from October and 3.9% less than year-ago.
Ukraine grain exports fall 30% in first half of 2022-23... Ukraine exported 22.6 MMT of grain in the first half of the 2022-23 marketing year, down 29.8% from the same period last year. That total included 12.5 MMT of corn (up 15.7%), 8.4 MMT of wheat (down 47.0%) and 1.6 MMT of barley (down 68.8%).
India will soon decide on selling wheat reserves to control inflation... The Indian government is considering selling wheat in open market to control food inflation and a final decision will be made in the next 10 days, two government officials told Reuters. The government has about 2.1 MMT of surplus wheat above the mandated buffer after it decided to discontinue the free foodgrain distribution program that was operational for 28 months, a government official said.
Brazil soy exports slow, corn shipments rise in December... Brazil exported 2.02 MMT of soybeans in December, according to official government data. That was down from 2.64 MMT in November and 2.71 MMT last year. Brazilian corn exports totaled 6.41 MMT last month, up from 6.06 MMT in November and 3.41 MMT last year.
The week ahead in Washington... The 118th session of Congress begins today. Before members take their oaths of office, the House must elect a new speaker, and House Republicans cannot yet say who their leader will be. Kevin McCarthy (R-Calif.) is expected to eventually get the vote, but he’s going down to the wire. On the economic front, the headliner will be jobs data for December, which will be released on Friday. On Wednesday, minutes from the December Fed monetary policy meeting will be released.
More countries tighten regs on Chinese travelers... Britain, France, Israel, South Korea and Spain joined the growing list of countries restricting travelers from China, with some demanding proof of vaccination and others negative Covid-19 test results. The World Health Organization (WHO) is pleading with China to release more regular information about the spread of the disease, as it rolls up its isolation policy. The EU’s health chief suggested the bloc should restart widespread genomic sequencing of new cases of Covid-19, to detect any new variants. The EU also reportedly offered free Covid-19 vaccines to China to help manage the vast outbreaks that surged as it relinquished its zero-Covid policy. Officials from the European Commission told the Financial Times that it would contribute variant-optimized doses to supplement China’s response, which relies on less-effective Chinese vaccines. The WHO has deemed the country’s vaccination coverage insufficient.
Cash cattle expected to trade higher... Packers were more aggressive than expected with cash cattle prices last week, suggesting they were short-bought on supplies after the holidays. Cash sources expect packers to be active buyers of cattle this week after light purchases the past could weeks and given their improved cutting margins.
Cash hog index drops... After two days of gains, the CME lean hog index is down 55 cents to $80.19 (as of Dec. 29). Traders will closely monitor the index as they wait to see if the cash market has posted a seasonal low. Today’s cash quote is $1.59 above the low to date of $78.60.
Holiday weekend 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
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Fats & Oils — NASS
- 2:00 p.m. Grain Crushings — NASS
