WEAKER TONE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 1 to 7 cents lower, soybeans 3 to 22 cents lower, Chicago wheat mostly 9 to 15 cents lower, Kansas City wheat 5 to 9 cents lower and Minneapolis wheat 4 to 5 cents lower. The U.S. dollar index is lower ahead of the European Central Bank's announcement on monetary policy.
DUELING ETHANOL MANDATE PRESS EVENTS TODAY... Proponents and opponents of the ethanol mandate will be out in force today, using press conferences on the topic. At issue is the federal renewable fuel standard (RFS). A bipartisan coalition of congressmen will hold a Capitol Hill press conference at 9:30 a.m. CT to discuss a letter they sent to EPA Administrator Lisa Jackson urging her to temporarily reduce the corn ethanol blending target to free up corn supplies for ranchers as drought drives down corn yields. Ethanol industry groups Growth Energy and the Renewable Fuels Association will push back with a press conference at 11 a.m. CT at the National Press Club. Those groups will say that modifying the RFS would increase gasoline prices and "will address the current misinformation about the drought, ethanol production and explain why a waiver of the RFS is unnecessary," Growth Energy said Wednesday in a media advisory.
SOME FARM GROUPS OPPOSE HOUSE AG DISASTER AID DETAILS; HOUSE GOP ALTERS LEGISLATIVE STRATEGY... Late Wednesday evening, the House Rules Committee announced it would pull the bill from the suspension calendar, a sign leaders did not have the two-thirds vote necessary to approve the measure that way. The House Rules panel approved a closed rule for the bill. It provides for one hour of debate, and no amendments will be allowed. Democrats will be permitted to move to recommit the measure. The ag disaster bill now needs just a simple majority. Senate Majority Leader Harry Reid (D-Nev.), who met with Agriculture Secretary Tom Vilsack at the Capitol on Wednesday, has said he will consider a stand-alone drought relief package only if it is exactly like the provisions included in the bipartisan farm bill the Senate approved in June. But the House proposal only addresses livestock disaster and tree assistance programs. Several farm groups released a joint statement Wednesday against the bill, while expressing support for both emergency aid to farmers and a long-term bill.
BIODIESEL TAX INCENTIVE EXTENSION PART OF SENATE TAX EXTENDERS BILL, BUT HURDLES REMAIN... The Senate Finance Committee wants to mark up legislation that would continue dozens of expired and soon-to-expire tax breaks known as extenders, as well as a one-year fix to the alternative minimum tax to prevent it from hitting more middle-income earners, and a retroactive reinstatement of the biodiesel tax incentive. The proposal would extend the income tax credit, excise tax credit and payment provisions for biodiesel and renewable diesel for two years (through December 31, 2013). The proposal is effective for sales and uses after December 31, 2011. While Senate Finance leaders want to have a markup as early as today, some senators have raised concerns they had not been given enough time to offer amendments. A delay would either mean the markup is pushed to Friday or until after the August recess. To mark up and clear the extenders package today, the committee would have to waive a rule requiring 48 hours of notice before such sessions are held. If the 48-hour rule is not waived, Finance could still hold a markup on Friday, but senators are eager to depart for their month-long summer recess. Even if the Senate clears an extenders bill in September, the measure would face a murky fate in the House.
FC STONE RELEASES FIRST CROP ESTIMATES... After surveying customers and considering other factors, FC Stone estimates the corn crop at 11.043 billion bu. and the national average yield at 124.3 Bu per acre with the soybean crop at 2.73 billion Bu and the national average yield at 36.2 Bu per acre. FC Stone used USDA's current harvested acreage estimates, which are higher than many crop forecasters are using, especially for corn.
RUSSIA COULD FURTHER LOWER GRAIN CROP FORECAST... Russia's grain production could fall into a range of 70 MMT to 75 MMT if drought conditions persist, which could trim 2012-13 exports to 10 MMT to 12 MMT, according to the country's deputy ag minister. Earlier this week, Russia's ag ministry lowered its official grain crop forecast to 80 MMT to 85 MMT and said there would be an exportable surplus of 12 MMT to 17 MMT.
NO SOY EXPORT TAX HIKE FOR ARGENTINA... Argentina's ag minister says the country is not considering raising the tax on soybean exports, as has been rumored recently. Argentina taxes soybeans at a rate of 35%, which is a contentious issue with farmers.
WEEKLY EXPORT SALES OUT THIS MORNING... For the week ended July 26, traders expect: corn sales between 0 and 200,000 MT; wheat sales between 400,000 and 600,000 MT; soybean sales between 250,000 and 450,000 MT; soymeal sales between 100,000 and 200,000 MT; and soyoil sales between 10,000 and 25,000 MT.
CASH CATTLE TRADE LIKELY TODAY... Cash sources say packers are wanting to get cattle bought before Friday this week, which increases odd they will raise cash bids in an effort to trigger movement today. Most cattle traders are anticipating $1 to $2 higher prices compared with last week's $114 trade in the Plains.
PORK MARGINS IMPROVE, BUT PACKER DEMAND TO REMAIN LIGHT... The pork cutout value surged $2.12 and packers moved 117.5 loads of product at the higher prices yesterday. But the price strength was concentrated in hams (up $5.62) and bellies (up $9.85) while other cuts were under pressure. As a result, cash sources are not expecting demand for cash hogs to improve. Cash hog bids are expected to remain steady to lower across the Midwest today.
OVERNIGHT DEMAND NEWS... Japan buys 141,443 MT of wheat in its weekly tender, including 108,448 MT of US supplies. Japan also tendered for 13,000 MT of milling wheat. Taiwan postponed its tender for 23,000 MT of US corn and 12,000 MT of US soybeans until Aug. 8 due to Typhoon Saola.