What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are trading mostly 1 to 2 cents lower, soybeans are 5 to 9 cents lower through the August 2014 contract and wheat futures are 1 to 4 cents lower with SRW contracts leading the decline. Barring unexpected bullish demand news, bears will maintain the upper hand into the daytime session. Cattle futures are expected to open mixed while hogs are called weaker.
* U.S. DDGs in China's crosshairs. China has rejected several cargoes of U.S. corn over the past month due to the presence of MIR 162 (Syngenta's Agrisure Viptera), which is not yet approved for import into the country. More rejections are likely as there are nearly 2 MMT of U.S. corn still en route to China, though some of those shipments are reportedly being diverted to other Asian destinations that have approved the GMO trait. Now shipments of U.S. dried distillers grains (DDGs) are reportedly under scrutiny. China-based consulting firm Shanghai JC Intelligence Co. says 4,000 MT to 5,000 MT of DDGs from the U.S. are being held for testing from quarantine officials, though those containers have not yet been officially rejected.
The long and short of it: U.S. corn shipments are being diverted to other Asian destinations without much problem, though some of the shipments are having to be discounted. Finding a home on the fly for the DDG shipments will be more difficult and could turn into some "lost" demand.
* China ministry raises December soy import forecast. Based on arrivals at ports so far, China's Ministry of Commerce now expects the country to import 6.34 MMT of soybeans this month. That's up sharply from its prior forecast of 3.85 MMT and would be a modest rise from official imports of 6.03 MMT in November. China continues to actively buy U.S. soybeans, though it's widely believed some (many) of its purchases are insurance in case there are late-season crop problems in Brazil or logistical issues/shipping delays with new-crop Brazilian beans, as there were last year.
The long and short of it: While China continues to gobble up U.S. soybeans, the threat of eventual cancellations is starting to put pressure on soybean futures.
* Dec. corn futures expire today. Today is expiration day for Dec. corn futures and the contract will leave the board at a discount to March corn. The persistent downtrend in corn prices for months and the discount in the expiring contract gives bears a downward target for the March contract.
The long and short of it: The downward price target created by the December corn contract is yet another hurdle the corn market faces as it tries to put in a low.
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