First Thing Today (VIP) -- December 13, 2013

December 13, 2013 12:20 AM


LOWER PRICE ACTION OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading mostly 1 to 2 cents lower, soybeans are 5 to 9 cents lower through the August 2014 contract and wheat futures are 1 to 4 cents lower with SRW contracts leading the decline. The U.S. dollar index is higher this morning.

HOUSE EASILY APPROVES BIPARTISAN BUDGET DEAL... The House on Thursday approved a two-year budget deal that turns off $63 billion in sequester spending cuts, a major victory for Speaker John Boehner (R-Ohio.). Hefty majorities in both parties backed the bill in a 332-94 vote. It finds savings through recalculating federal workforce pensions and requiring government employees to contribute more toward retirement, something Democrats did not like. The vote showed declining sway of some conservative groups that said it did too little to cut spending. The bill cuts the deficit, avoids tax hikes and makes permanent reforms to save money, such as stopping welfare checks to criminals. It now heads to the Senate, where a vote is expected next week. Senate passage is expected. President Obama has already announced his support for the deal. Once it is signed into law, Congress will need to approve a giant spending bill for the rest of the fiscal year to keep the government funded. Votes on that legislation are expected after the holiday recess to give appropriators time to produce a bill. New legislation is needed by Jan. 16 to avoid a government shutdown.

PROGRESS ON FARM BILL SCORING, BUT HOUSE DEMS DELIVER ANOTHER HURDLE... House Democrats have added another hurdle with some wanting to add a three-month extension to expiring unemployment benefits to the farm bill measure, and have the costs offset by some of the farm bill savings. Also, we are now told that the food stamp funding cuts total $8.8 billion -- $800 million above prior expectations. Another farm bill update: The Congressional Budget Office (CBO) scored Title I (safety net) proposals and they came within Ag panel staff expectations. The means there could be an announcement soon of an overall framework agreement, with language and other details released early in 2014 and a vote as early as the second week of January. Farm bill conference principals are meeting this morning, so the announcement could come after they meet.

CHINA CHECKING U.S. DDGS... Several containers of U.S. dried distillers grains (DDGs) are reportedly being held at Chinese ports awaiting testing for the presence of MIR 162 (Syngenta's Agrisure Viptera) that has not been approved for import into China. China-based consulting firm Shanghai JC Intelligence Co. says 4,000 MT to 5,000 MT of DDGs from the U.S. is being held for testing from quarantine officials, though those containers have not yet been officially rejected.

MINISTRY RAISES CHINESE DECEMBER SOY IMPORT FORECAST... Based on arrivals at ports so far, China's Ministry of Commerce now expects the country to import 6.34 MMT of soybeans this month. That's up sharply from its prior forecast of 3.85 MMT and would be a modest rise from official imports of 6.03 MMT in November.

CBH GROUP SEES BIGGER WESTERN AUSTRALIAN GRAIN CROP... CBH Group raised its Western Australia grain crop forecast to 14.5 MMT from a range of 13.2 MMT to 13.8 MMT last month. The Australian grain firm says yields were better than anticipated in most areas of the region. Typically, wheat accounts for about two-thirds of the Western Australia grain crop.

STILL WAITING ON CASH CATTLE TRADE... Cash cattle negotiations are still ongoing in the Plains, with bids and asking prices several dollars apart as of late Thursday. The sentiment in the market was swinging toward the possibility of steady $132 cash cattle prices compared with week-ago, but a sharp drop in Choice boxed beef prices yesterday may keep packers from paying steady money given negative cutting margins and bigger showlists.

PORK CUTOUT DROPS SHARPLY... The pork cutout value plunged $1.87 Thursday amid sharp declines in bellies, hams, ribs and picnics. Despite pressure on product prices, packers continue to enjoy strong margins as they aren't having to raise cash hog bids in order to obtain supplies to fill out slaughter runs.

OVERNIGHT DEMAND NEWS... Exporters reported no tenders or purchases.


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