BULLS REGAIN THE ADVANTAGE IN THE GRAIN, SOY MARKETS... A hot, dry 6- to 10-day weather outlook returned control to market bulls overnight. As of 6:30 a.m. CT, corn futures are steady to fractionally higher and beans are roughly 1 to 5 cents higher, but both markets are well off session highs. Wheat futures are also enjoying slight gains with HRS wheat leading to the upside.
SITUATION IN SYRIA CONTINUES TO ROIL GLOBAL MARKETS... Some Asian stock markets are posting steep losses for a second session. U.S. stock futures, meanwhile, were holding onto slight gains in pre-day trading after the Dow dipped to a two-month low on Tuesday. Crude oil has also risen sharply on fears that the situation in Syria could spread to other oil-producing countries in the region. Brent crude climbed to its highest level in 6 months, and U.S. oil prices the highest in 18 months in overnight action. Meanwhile, gold reached its highest level since May. The UK is to present a resolution at the UN calling for all steps to be taken to protect Syrian citizens from chemical weapons, and Germany's foreign minister called on all countries -- including Russia -- to back the resolution. Expectations for military action by the U.S. and its allies are driving the rise in markets as Syria has also pledged to rebuff any military efforts.
USDA SEEKS COMMENT ON GREENHOUSE GAS REPORT... The Climate Change Program Office released a report Tuesday that discusses possible methods to measure greenhouse gas emissions and carbon storage at the farm, ranch and forest level. The request for public comment will be published in today's Federal Register and interested parties have 45 days to respond. The request for comment fulfills a requirement in the 2008 Farm Bill and is part of USDA's ongoing effort to anticipate and prepare for climate change's effect on agriculture.
WTO PANEL TO MEET FRIDAY TO CONSIDER COOL ISSUE... The Canadian government announced last week it has formally asked the World Trade Organization (WTO) to set up a compliance panel to judge whether USDA's changes to country-of-origin labeling (COOL) meet the intent of the WTO's Dispute Settlement Body (DSB) and Appellate Body rulings. Meanwhile, a coalition of Canadian livestock producer groups and U.S. meat industry players expects to know within two weeks if a U.S. court will halt Washington's changes to COOL.
CME GROUP RAISES INITIAL MARGINS FOR CORN AND SOY... CME group raised its initial margins for speculators for the following futures products:
- Corn: From $2,025 per contract to $2,363 per contract (16.7%)
- Soybean: From $4,050 per contract to $4,725 per contract (16.7%)
- Soybean meal: From $2,700 to $3,038 per contract (12.5%)
GERMAN WHEAT PRODUCTION TO REBOUND IN 2013... Germany is expected to harvest a 24.18 MMT wheat crop in 2013, which would be an 8.3% increase from 2012, according to the grain trader Toepher International. This is slightly below the firm's forecast last month of 24.24 MMT.
CHINA CUTS RED TAPE ON SOME COMMODITY IMPORTS... In an effort to open up its commodity markets, China announced it will exempt some commodities from license requirements for imports as of Sept. 1. This action includes some metals, natural gas, beef, pork and chicken.
COTTON CROP CONCERNS IN INDIA... Heavy rains in some of the main cotton producing regions of India are raising concerns about the quality of the crop as well as a delay in harvest. This pushed cotton futures prices in the country to a record high today and could shift some export demand to the U.S. China has been a strong buyer of yarn from the country.
INDONESIA TO KEEP SOYBEAN IMPORT TARIFF... Indonesia's government rejected a plan to eliminate its 5% import tariff on soybeans in an effort to ease domestic food price pressure. These discussions arose in response to a steep decline in the rupiah and an increase in global soybean prices.
SOUTH KOREA TO BUY 9 CARGOES OF CORN FOR FEBRUARY ARRIVAL... South Korean millers have recently been upping their corn buys. While sources indicate the country has covered its needs for January, trader and cargo surveyors say the country plans to buy 540,000 MT of corn for February delivery; so far they have bought 180,000 MT of corn for February arrival.
CASH HOG MARKET IMPROVES ON MIDWEST HEAT... Lean hog futures posted a strong finish yesterday, which could set the stage for some followthrough buys today. Gains were spurred by an impressive surge in the product market yesterday morning, though the pork cutout value rose just 11 cents on the day. More impressive was improved movement of 357.5 loads. The cash market was also better than expected as some packers paid up for supplies that are being tightened by the Midwest heatwave. Mixed bids are expected again today.
SLOW BEEF MOVEMENT, HEAVY SHOWLISTS PRESSURE CATTLE... Demand concerns and heavier showlist estimates weighed on the cattle market yesterday as this could make it tough for feedlots to get better than steady prices for cash cattle this week. Yesterday, Choice and Select boxed beef values did rise 29 cents and $1.50, respectively, but just 142 loads changed hands for the day, keeping demand concerns close at hand.
OVERNIGHT DEMAND NEWS... Tunisia issued an optional origin tender for 84,000 MT of soft milling wheat and 75,000 MT of animal feed barley. Japan will import 1,250 MT of feed wheat via its weekly tender. South Korea's Nonghyup Feed Inc. bought 60,000 MT of optional origin corn to be sourced from the U.S., South America, Black Sea or South Africa. Egypt's state grain buying agency tendered for 55,000 MT to 60,000 MT of milling wheat from either Canada, the U.S., France, Australia, Germany, Romania, Russia or Ukraine on Tuesday.