First Thing Today: U.S. Shipping Delays Slow China's Bean Buys in October

Good morning!

Grains lower, soybeans higher during quiet overnight session... Corn futures are steady to fractionally lower following a quiet overnight session with buying and selling interest likely to remain limited leading up to USDA's Thursday reports. Soybean futures, on the other hand, are steady to a penny higher. Winter wheat futures are down 1 to 3 cents in most contracts across all three flavors. The U.S. dollar index is bouncing around unchanged while crude oil futures are slightly lower.

Disappointing Chinese bean buys for October amid U.S. shipping delays.... China imported 5.86 MMT of soybeans during October, a 2.23 MMT (27.7%) drop from September but a 650,000 MT (12.5%) increase from the year prior, according to preliminary customs data. Its imports came in well under expectations, with Monica Tu, an analyst with Shanghai JC Intelligence Co. Ltd., blaming shipping delays from the U.S. due to bean quality issues and logistics problems in the wake of consecutive hurricanes. China's commodity imports as a whole were disappointing in October, in part due to seasonal factors but also because the country's efforts to cut down on smog by year-end have impacted a number of industries. Ten months into the year, China has imported 77.31 MMT of soybeans, a 15.2% jump from year-ago.

Army Corps closes stretch of Ohio River... The U.S. Army Corps of Engineers closed locks and dam 52 on the Ohio River near Paducah, Kentucky yesterday due to rising water levels. The installation of a rock dike as part of an emergency dam repair this fall paired with the high water levels made boat passage dangerous. Army Corps crews will start working to remove the dike today or tomorrow, a process that could take several days. This has already backed up 22 towboats hauling more than 200 barges, according to the Army Corps. And that backlog is only expected to grow along one of the busiest stretches of the U.S. river system. Grain barge freight rates shot higher in response. This represents the third time this area of the river has been closed in two months. It also emphasizes the need to upgrade our country's infrastructure. The locks and dams are nearly 90 years old.

Macri says negotiators have not yet reached a deal to lift duties on Argy biodiesel... Argentina will definitely go to the World Trade Organization if the U.S. Commerce Department maintains duties on its biodiesel shipments, Mauricio Macri, Argentina's president, told Reuters in an interview. Regarding efforts with U.S. Commerce Secretary Wilbur Ross to reach a deal with the private sector, Macri said, "Secretary Ross is doing his best to find an agreement," but "we didn't find it." But he added, "I'm still optimistic."

Argentina already ramping up biodiesel to the EU in wake of tariff cuts... Argentina says it plans to export at least 500,000 MT of biodiesel to the EU in 2018 after the bloc slashed restrictive duties on the biofuel, according to an analysts with the Carbio industry chamber. In the weeks since the duties were cut, Argentina has already shipped 300,000 MT of biodiesel to the bloc. Prior to the implementation of the tariffs in 2013, the EU had been the largest importer of Argentine biodiesel.

Japan's efforts on trade deals could leave U.S. pork at a major disadvantage... A trade agreement in principle between Japan and the European Union along with a possible Trans-Pacific Partnership without the U.S. (TPP-11) could put U.S. pork at a major tariff disadvantage in Japan, reports a USDA attache in the country. "The two agreements are likely to contain similar tariff concessions for a wide range of pork products including fresh, chilled, and frozen pork as well as processed products such as ham, bacon, sausage, ground seasoned pork, and canned ham," the post details, adding that the Japan-EU agreement could take effect as soon as 2019. In 2016, Japan was the top destination for U.S. pork, importing $1.6 billion worth of the meat.

Cash cattle trade starts early... A few hundred head of cattle changed hands in Kansas and Nebraska around $124 yesterday, with Texas seeing active trade at $124. These early-week sales at steady to slightly lower prices relative to week-ago signals packers likely entered the week in need of supplies. After early week pressure, December live cattle are trading just slightly above these cash prices, which could limit any followthrough selling.

Hog weights climb... December lean hogs have violated uptrending support, though deferred contracts have yet to do so. But followthrough selling today could do the trick. Tumbling cash hog prices around the Midwest have weighed on lean hog futures in recent days, though this has propped up packer profit margins. Average hog weights in the Iowa/southern Minnesota market climbed another 1.2 lbs. the week ending Nov. 4, signaling supplies are backing up around the Midwest with farmers busy with harvest. Weights are now up 3.4 lbs. from year-ago levels. On a more positive note, the pork cutout value climbed 76 cents yesterday amid improved movement of 374.44 loads.

Overnight demand news... Algeria issued tenders to buy 50,0000 MT of milling wheat and 19,0000 MT of animal feed barley from optional origins. Egypt tendered to buy an unspecified amount of wheat from global suppliers; Russia has the lowest offer. Japan purchased 32,540 MT of feed-quality wheat and 37,610 MT of barley for livestock use via a simultaneous buy and sell auction. The country is also seeking 120,000 MT of feed wheat and 200,000 MT of feed barley in a similar tender.

Today's reports:

• 9:30 a.m., Weekly Ethanol Production -- EIA
• 2:00 p.m., Broiler Hatchery -- NASS