PRICE PRESSURE OVERNIGHT... As of 6:30 a.m. CT, corn futures were trading 4 to 8 cents lower, soybeans steady to 5 cents lower in all but the far-deferred contracts which are slightly higher, Chicago wheat 9 to 13 cents lower, Kansas City wheat 11 to 13 cents lower and Minneapolis wheat 5 to 6 cents lower. The U.S. dollar index is firmer this morning.
SCATTERED RAINS IN WESTERN BELT... Scattered precip developed in the western Corn Belt overnight and the showers are continuing this morning. Additional scattered rains are expected the next several days, while moderate temps are forecast to last into early next week.
SENATORS URGE EPA TO LOWER CORN ETHANOL MANDATE... Twenty-five senators in a letter urged EPA Administrator Lisa Jackson to lower the ethanol usage mandate because of soaring corn prices due to the drought. Some 156 House members sent a similar letter to Jackson last week. "As stressful weather conditions continue to push corn yields lower and prices upward, the economic ramifications for consumers, livestock and poultry producers, food manufacturers and foodservice providers will become more severe," the senators said in their letter. However, an analysis of the issue by Morgan Stanley concludes that, "Just as ethanol demand did not decline when the $0.45 blenders’ tax credit expired, so long as ethanol remains economically attractive to blend, any change to the RFS is unlikely to impact demand. Further, significant structural constraints also make moving away from ethanol challenging."
MORE BLACK SEA GRAIN EXPORT FORECASTS... Russia will have an exportable grain surplus of 12 MMT to 13 MMT in 2012-13, according to the head of the Russian Grain Union. Like others, he says export restrictions will not be needed. A Russian government commission on food security is meeting today to discuss the country's grain situation. Meanwhile, Ukraine will have an exportable grain surplus of 21 MMT to 23 MMT, including 5 MMT of wheat and 12.7 MMT of corn for 2012-13, according to a farm ministry official.
CHINESE WHEAT STOCKPILING HITS 12.1 MMT... China has stockpiled 12.1 MMT of wheat (about 11% of its output this year) since harvest, according to the head of the State Grain Administration. Due in part to the government stockpiling program, domestic wheat prices have risen above the minimum procurement price.
BOXED BEEF MARKET BUILDS ON MONDAY'S PERFORMANCE...Boxed beef prices were $1.41 to $1.55 higher Tuesday and packers moved 215 loads of product. With the boxed beef market strengthening and showlist numbers down from week-ago, traders are expecting cash cattle prices to firm from last week's mostly $118 trade in the Plains.
PORK MARKET GIVES BACK MONDAY'S GAINS AND THEN SOME... The pork cutout value was $1.45 lower Tuesday to more than erase Monday's strong gains. Sharp losses were posted in loins, butts, ribs and hams. On a positive note, packers moved a strong 154.63 loads of product amid the sharply lower prices.
OVERNIGHT DEMAND NEWS... Taiwan purchased 23,000 MT of U.S. corn and 12,000 MT of U.S. soybeans. South Korea bought 55,000 MT of Indian feed wheat and tendered for another 110,000 MT of optional origin feed wheat. Algeria purchased 225,000 MT of wheat -- likely French origin.