First Thing Today (VIP) -- December 10, 2013

December 10, 2013 12:11 AM


CORN AND WHEAT LOWER, BEANS MIXED THIS MORNING... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are narrowly mixed and wheat futures are mostly 2 to 4 cents lower. The U.S. dollar index is holding near unchanged.

WEATHER CLOSES GOV'T OFFICES, BUT USDA REPORTS ON AS SCHEDULED... USDA will release its December crop reports as scheduled this morning even as snow has caused many government offices to close. Meanwhile, with federal offices closed today due to inclement weather and some lawmakers unable to return to Washington, the congressional schedule for the week is in flux.

MINOR FINE TUNING EXPECTED IN DECEMBER CROP REPORTS... The only updated crop estimate in the Crop Production Report will be for cotton -- USDA does not issue updated corn and soybean crop estimates in December. In the Supply & Demand Report, traders are expecting carryover projections for corn, soybeans and wheat to tighten from last month with the average pre-report guesses at 1.861 billion bu. for corn, 154 million bu. for soybeans and 553 million bu. for wheat.

BRAZIL UPDATES CROP FORECASTS... Conab, the statistical forecasting agency of the Brazilian government, now sees the country's soybean crop at a record 90.03 MMT compared to a range of 87.9 MMT to 90.2 MMT last month. The corn crop is forecast at 78.8 MMT versus a range of 78.5 MMT to 79.8 MMT last month. The wheat crop forecast was raised to 5.36 MMT from 4.81 MMT in November.

NEW FARM BILL END ZONE INCREASINGLY LOOKS LIKE EARLY 2014... While a new farm bill framework agreement could be announced by week's end, final details and floor votes on the conference report will likely take place in early 2014, sources signal. While final details on several issues remain unclear, Rep. Collin Peterson (D-Minn.) said the negotiators have agreed on how much to cut from food stamps, though he declined to provide a number, but said the deal hews "substantially closer to the Senate’s" targeted cuts of $4 billion over the next decade rather than the House’s bill, which proposed $39 billion. Peterson, during an interview with the Fargo Forum, said he thinks the coming farm bill "will pass the Senate, but I cannot guarantee you it will pass the House... They are not going to be happy with the food stamp cuts." On the coming House vote, Peterson said he is "confident he can secure ‘yes’ votes from at least half of the House Democrats, which is important if many Republicans, who control the House, balk at the smaller-than-expected cuts to food stamps."

ST. LOUIS FED’S BULLARD SEES DISCUSSION ON TAPER NEXT WEEK... The Federal Open Market Committee (FOMC) will discuss tapering the Fed’s $85 billion per month asset purchase effort, and St. Louis Fed President James Bullard said a small taper may be the best way to start. His view is shaped in large part by the last two U.S. Employment Reports, which showed stronger-than-expected jobs growth, growth that Bullard said appears poised to continue. "Based on labor market data alone, the probability of a reduction in the pace of asset purchases has increased," Bullard said. Meanwhile, asset purchase opponents in the form of Richmond Fed’s Jeffrey Lacker and Dallas Fed’s Richard Fisher both kept up their calls for starting to wind down the effort. Bullard is currently a voter on the FOMC and Fisher moves into that role in 2014.

STRONG BOXED BEEF PRICE GAINS, BUT SLOW MOVEMENT... Boxed beef prices firmed $1.05 to $1.14 Monday, but packers moved only 127 loads of product on the day. With showlist numbers up across the Plains except for Kansas and given negative margins, packers will likely want to see beef movement improve or they'll be reluctant to pay steady to firmer prices compared with last week's $132 trade.

LIMITED DEMAND FOR CASH HOGS... Packer demand for cash hogs was lighter than expected Monday given strong cutting margins and inclement weather across the Midwest. Therefore, cash sources are expecting cash hog bids to be steady to weaker at most locations today, though some scattered firmer bids are possible in areas.

OVERNIGHT DEMAND NEWS... Japan purchased 111,173 MT of Canadian spring wheat. Egypt tendered to buy 40,000 MT of optional origin sunflower oil.


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