What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are trading around 2 cents lower, soybeans are 6 to 12 cents lower and wheat futures are 1 to 3 cents lower. It's going to take strong weekly export sales to curb selling interest this morning. Cattle futures are called mixed this morning, while hog futures are expected to open firmer.
* More Chinese rejections of U.S. corn likely. That headline should come as no surprise to anyone. While confirmation of Chinese rejections of U.S. corn has slowed in recent weeks, everyone fully expects that more U.S. corn shipments will be turned back by China. Chinese quarantine authorities told Reuters potential rejections could top the volume already turned back (around 600,000 MT), though they didn't give a specific tonnage. What everyone wants to know is when China may approve MIR 162, the GMO corn trait that's the reason for the rejections. The next chance for approval appears to be at the end of March, which China's ag ministry holds its annual biosafety meeting. After that, the next review could be June.
The long and short of it: China is in no hurry to approve MIR 162 and is now really dragging its feet amid increased pressure for approval. There's speculation China will wait until after the end of April, when its annual domestic stockpiling campaign ends, before seriously considering approval of MIR 162.
* Winterkill concerns drawing more attention. Wheat traders were reluctant to get concerned about winterkill damage to the winter wheat crop during the polar vortex earlier this month, but the latest round of sub-zero temps and high winds is sparking some concern. Between the two arctic blasts, temps warmed enough to melt much of the snowcover across the Central Plains and eastern Midwest, leaving portions of the HRW and SRW crops vulnerable to winterkill. But even with more of the crop now exposed, winterkill concerns are still relatively limited. A fresh blanket of snow is expected to fall across the country's midsection over the weekend, which should help protect the crop from the next round of very cold temps early next week. At this point, the bitterly cold temps are little more than a reason for traders to cover some short positions.
The long and short of it: The extent of any winterkill issues won't be known until spring when the crop breaks dormancy. That limits the likelihood of extended or strong price support near-term, especially since the crop went into dormancy in very good condition.
* Canada discovers PEDV. Authorities have confirmed the first two cases of porcine epidemic diarrhea virus (PEDV) in Canada. One of the discoveries was on a hog farm in Middlesex Co. in Ontario, while the other was at a slaughter facility northeast of Montreal, Quebec. Ontario and Quebec are Canada's top two hog production provinces. PEDV has killed an estimated one to four million pigs in the United States.
The long and short of it: Given the contagious nature of the disease and its spread in the U.S., it was just a matter of time until PEDV was discovered in Canada. It's hard to pin down how much death loss the disease will ultimately cause, but it's safe to say U.S. and Canadian pork production this year swill be down from what was earlier expected.
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