Evening Report (VIP) -- October 12, 2012

October 12, 2012 09:42 AM


DEAL STRUCK TO IMPORT ARGENTINE CORN... Reuters has confirmed that U.S. livestock companies have signed deals in recent weeks to import around 600,000 MT of corn from Argentina. This comes on the heels of 750,000 MT in purchases of Brazilian corn last month. The first Argentine corn shipment of 43,000 MT is expected to be loaded later this month and arrive in Wilmington, North Carolina, Nov. 12.

Rumors of Argentine corn imports contributed to today's profit-taking pressure in the corn market. With U.S. corn supplies tight, livestock and poultry producers are searching for cheaper, alternative supplies.



BEEF AND PORK EXPORTS SLIP IN AUGUST... According to USDA data compiled by the U.S. Meat Export Federation (USMEF), the value of beef and pork exports for the first eight months of the year remained slightly ahead of 2011's record-setting pace, but exports slipped in August in terms of volume compared to year-ago levels. U.S. beef exports in August were the second-largest of the year at 100,468 MT, but this was still 14% below the August 2011 volume. In value, August exports totaled $486.2 million. Year-to-date beef exports through August are 11% lower than year-ago in volume (759,901 MT) but still 2% above last year's record value pace at $3.66 billion.

U.S. pork exports in August were down 6% in volume (175,310 MT) and 7% in value ($495.5 million) compared to year-ago, but these totals were up 10% and 6%, respectively, from the previous month's performance. Year-to-date pork exports through August are up 2% in volume (1.474 MMT) and 8% in value ($4.13 billion) from last year's record levels.

USMEF President and CEO Philip Seng says rising production costs and slowing economic growth are creating a challenging business climate in several key markets.



DID SOMEONE JUMP THE GUN?... Corn futures posted sharp gains seconds ahead of the 7:30 a.m. CT release of the Oct. 11 USDA reports. USDA verified its process and says
internet posting was initiated and completed after 7:30 a.m. CT. The CME Group is examining trades that took place leading up to the report release and information posted on the CME website shows hundreds of trades took place in December corn futures from $7.39 to $7.53 between 7:29:57 and 7:30:00. Key now is whether a similar pattern can be found in trade activity in the seconds leading up to last month's USDA reports.

DIRECT AND CRP PAYMENTS... FSA offices are issuing CRP and Direct and Counter-cyclical Program (DCP) payments. The payments could be affected if you have not submitted the required Adjusted Gross Income (AGI) forms or if you hayed/grazed CRP.



DODD-FRANK WOULD BE BETTER WITH CFTC, SEC MERGER... Speaking at a CME Group event today, Rep. Barney Frank (D-Mass.) said the Dodd-Frank Act aimed at financial regulatory reform would have been better if it merged the U.S. Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) -- the regulators of the the securities and futures markets. Frank explained that the two have "overlapping jurisdiction." But he also acknowledged long-standing distrust between the agencies and their related stakeholders, such as the CME Group.

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