First Thing Today (VIP) -- April 11, 2014

April 11, 2014 01:33 AM

Good morning!

Calm trade in grain/soy futures this morning... As of 6:30 a.m. CT, corn futures are steady to 2 cents higher, soybeans are 2 to 5 cents lower, SRW and HRW wheat futures are steady to 1 cent lower and HRS wheat futures are steady to 2 cents higher. The U.S. dollar index is mildly firmer this morning.

NGFA sizes up impact of China's rejection of U.S. GMO corn... In the first full tally of the impact, U.S. grain-industry group National Grain and Feed Association (NGFA) says Chinese rejections of U.S. corn shipments total nearly 1.45 MMT, far more than Beijing has reported and the roughly 900,000 MT that has circulated in news media. The information was first reported in today's Wall Street Journal. The rejected shipments have cost grain companies $427 million from lost sales and reduced prices for China-bound shipments that must be resold elsewhere, NGFA said in a report to be released as soon as today. The figure includes corn and related products. China's scrutiny of Syngenta's Viptera (MIR 162) corn trait also has affected the price of corn and soybeans, translating to hundreds of millions of dollars in losses for farmers, according to the report.

After nearly $1 trillion new farm bill, California senator pushes revised drought aid bill... Farm-state lawmakers frequently noted throughout the lengthy new farm bill debate that ended in a bill projected to cost nearly $1 trillion over ten years that an adequate farmer safety net was needed to help producers cope with various events such as drought. That apparently wasn't enough, as Sen. Dianne Feinstein (D-Calif.) has introduced a scaled-back disaster aid package wanted by her drought-stricken state. But to date, Feinstein cannot garner the necessary support to overcome a possible filibuster. Feinstein's original bill (S 2016) would have provided $300 million in emergency assistance, but a revised version dropped all direct spending while expanding other forms of assistance to more states. The revisions would make other drought states eligible for emergency environmental reviews.

Chinese consumer prices rise, producer prices fall again... China's Consumer Price Index (CPI) rose to 2.4% over year-ago in March, up from a 2% increase in February. The rise in consumer prices was driven largely by food prices, which rose 4.1% from year-ago last month, while non-food prices were up 1.5%. The Producer Price Index (PPI) came in 2.3% under year-ago last month -- the 25th straight month of a lower PPI reading compared to year-ago and the quickest pace of decline in eight months. With inflation not a concern, China could try to boost economic activity with stimulus measures but Premier Li Keqiang said earlier this week his country has no plans for short-term stimulus efforts.

Cargill to halt deliveries at central Illinois soy processing plant next week... The Cargill soy processing plant at Bloomington, Illinois, will stop deliveries of soybeans next week due to a shortage of railcars. The plant will continue processing operations, however, as it has plenty of soybeans in on-site storage.

Still waiting on cash cattle trade... Cash cattle negotiations remain slow in the Plains, though traders expect activity to eventually develop at lower prices compared to last week's $148 to $150 trade. Cash weakness is built into cattle futures as the April live cattle contract closed $4 below the bottom end of last week's trading range yesterday.

Wholesale pork prices drop again... The string of price declines in the pork cutout value stands at four consecutive days after dropping another $1.84 Thursday. All cuts except hams (up $1.79) and butts (up 8 cents) posted sharp losses on the day. While movement is holding strong, this week's trade signals packers are having to lower prices to encourage movement.

Overnight demand news... Algeria bought 450,000 MT of optional origin (likely French) wheat. Egypt tendered for at least one cargo of optional origin wheat. Results of the tender will be known later this morning.


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