What Traders are Talking About:
Overnight highlights: As of 5:45 a.m. CT, corn futures are 1 to 2 cents higher, soybeans are mostly 3 to 7 cents lower and wheat futures are fractionally to 2 cents higher. Overnight trade has not been a good predictor of price action during the day session recently. Cattle futures are called mixed this morning. Lean hog futures are expected to face light followthrough selling.
* China reviewing banned GMO corn. China is reviewing an application for approval of Syngenta's Agrisure Viptera corn (aka MIR 162) that has caused the country to recently reject multiple U.S. shipments, according to an ag ministry official. He says Syngenta has applied for approval of this trait "many times" dating back to 2010, with the latest coming in November. Previous applications have been denied because Syngenta failed to provide sufficient application material and experimental data.
The long and short of it: China is expected to approve the import of this corn trait in the first quarter of 2014. But the rejection of more shipments of U.S. corn are likely near-term as there are reportedly around 2 MMT of U.S. corn en route to China. Fortunately, the shipments are being diverted to other Asian destinations, which have approved this corn trait, so it's not "lost" demand.
* Argentina to cut soy export tax? Speculation made its way around social media yesterday that Argentina would cut its soy export tax from 35% to 20% on Jan. 1, prompted by a story in the Argentine newspaper La Nacion on Wednesday. Contacts in the country don't feel a cut to the soy export tax is likely because the government needs the revenue. An ag ministry official told Reuters he isn't aware of any such discussions. But there is a fair amount of smoke on this issue and typically where there's smoke, there's fire.
The long and short of it: A cutting of Argentina's soy export tax would clear the way for more soybean exports and be price-negative for soybean futures.
* Focus on jobs data. Third quarter GDP came in much stronger than anticipated yesterday at an annualized growth rate of 3.6%. That sparked some talk the Fed could start tapering its $85 billion per month in asset purchases, as the economy is showing greater signs of growth. But underlying domestic demand remains sluggish as consumer spending was revised down to 1.4% -- the lowest since the fourth quarter of 2009. That's likely to be enough to keep the Fed printing money and the tapering on hold. Plus, Chairman Ben Bernanke has repeatedly stated unemployment and inflation are the two key factors the Fed is watching in regards to when the tapering will begin. That makes this morning's jobs data more important than yesterday's GDP data. Economists are anticipating 180,000 non-farm payrolls were added last month and that the unemployment rate will tick down to 7.2%.
The long and short of it: A strong jobs report would spark more speculation on the start of tapering. But I'll stick with a later-rather-than-sooner stance until Bernanke (or incoming Chairperson Janet Yellen) signal tapering is imminent.
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