What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are mixed with the most actively traded contracts around 1 cent higher and soybeans are mostly 6 to 8 cents higher. The winter wheat markets are 1 to 3 cents higher, while HRS wheat futures are narrowly mixed. The choppy to mostly firmer tone is expected to continue at the start of the daytime trading hours. Cattle futures are expected to open with a slightly firmer tone, while hog futures are expected to face followthrough selling after a poor close Tuesday.
* China GMO corn update. China has now rejected five batches of U.S. corn totaling 120,643 MT this month, which is in addition to the rejection of a 60,000-MT cargo of U.S. corn in November, according to China's quarantine authority. All of the rejected shipments have contained Syngenta's Agrisure Viptera corn (MIR 162), which is not yet approved for import in China, though that's expected to happen sometime next year. Quarantine authority officials have told the U.S. to tighten inspection procedures. Nearly 2 MMT of U.S. corn are currently en route to China.
The long and short of it: While the corn market has handled the situation relatively well, it will remain a wet blanket on corn prices until there's resolution.
* Canadian crop update this morning. Statistics Canada is widely expected to increase its wheat, canola and barley crop estimates this morning in its final forecasts for this year's crops. Favorable late-season weather led to record yields across much of Canada. The pre-report trade guesses peg all wheat between 33.325 MMT and 35.300 MMT, canola between 16.600 MMT and 18.000 MMT and barley between 9.400 MMT and 9.475 MMT. In October, Statistics Canada pegged the all wheat crop at 33.026 MMT, canola production at 15.963 MMT and the barley crop at 9.247 MMT.
The long and short of it: Bigger crop estimates are already "in" the market, so it would take much bigger-than-expected crop forecasts to be highly price-negative.
* Cold blast coming. A blast of arctic air is forecast to hit the country's midsection tomorrow and last into next week. The frigid temps could cause damage to the winter wheat crop, which doesn't have a protective blanket of snow and is vulnerable to winterkill. But temps would likely need to get much lower than currently forecast to have a significant impact. The other impact will be to livestock as weight gains are likely to slow amid the cold temps, though impacts should be minimal unless there's an extended period of arctic temps.
The long and short of it: Price action in the wheat market signals there's limited concern about potential winterkill problems at this point. And livestock markets signal traders feel the cold blast will be temporary and won't have a lasting impact.
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