First Thing Today (VIP) -- December 19, 2013

December 19, 2013 12:20 AM
 

GOOD MORNING!

MIXED TO FIRMER TONE IN GRAINS... As of 6:30 a.m. CT, corn futures are narrowly mixed, soybeans are mostly around 2 cents higher and wheat futures are mixed with a slight upside bias. The U.S. dollar index is firmer this morning.

SENATE CLEARS BUDGET ACCORD, ON WAY TO WHITE HOUSE FOR EXPECTED SIGNATURE... On Wednesday, senators voted 64-36 to endorse the House-passed measure, which would eliminate $63 billion of sequestration cuts and set top-line spending for FY 2014 at $1.012 trillion and $1.014 trillion in FY 2015. Stopgap funding that will expire Jan. 15 establishes spending at an annualized rate of $986 billion. Nine Republicans joined all 53 Democrats and two independents to support the legislation. The House passed the measure last week, 332-94.

OMNIBUS SPENDING BILL NEXT BUDGET MUST-DO...
Senate Appropriations Chairwoman Barbara Mikulski (D-Md.) wants an omnibus Fiscal 2014 spending bill on the Senate floor by Jan. 13, a timeline that means subcommittees in both chambers must deal with any funding and policy differences by very early in the new year. Mikulski''s House counterpart, Harold Rogers (R-Ky.) had been waiting until after the Senate’s Wednesday passage of the budget deal to divide its $1.012 trillion for FY 2014 discretionary spending among the 12 Appropriations subcommittees. Negotiations over those individual allocations, known as 302(b) levels, are "still a work in progress" but will be completed shortly, Mikulski said. Once those are given to the subcommittees, appropriators and their staffs will compile policy and funding differences in the House and Senate versions of all 12 spending bills. Over the holiday recess, subcommittees will try to iron out as many differences as possible. Mikulski said the panels have until Jan. 2 to report any ongoing disagreements over spending and policy to her and Rogers. The goal is to have the House finish by Jan. 10 so the Senate can take it up Jan. 13. If so, there would not be a need for a stopgap funding measure as current funding runs out on Jan. 15.

OBAMA'S TAPPING OF SEN. BAUCUS AS NEXT AMBASSADOR TO CHINA WILL HAVE SIGNIFICANT IMPACTS... Senate Finance Committee Chairman Max Baucus (D-Mont.) is widely expected to be nominated by President Obama to be the next U.S. ambassador to China. Baucus, 72, had planned to retire from the Senate when his term ends at the beginning of 2015. The development throws into uncertainty the prospects for tax reform, the chairmanship of the Senate Finance Committee, the leader of the Senate Energy and Natural Resources panel, and the Senate race to succeed him in conservative Montana, where Republicans were betting on picking up a seat. Baucus' move also makes murky any extension of tax incentive extenders, including biodiesel, which are slated to expire at the end of this year. Baucus had a role in the new farm bill, having pressed Ag panel leaders to include a farm-based revenue assurance program that would benefit states like Montana with widely dispersed counties.

JCCT TALKS WILL INCLUDE GMO CORN SITUATION... U.S. officials will be addressing the issue of China’s lack of approval of a GMO corn variety (MIR 162), which has prompted the country to reject some shipments of U.S. corn. The Joint Commission on Commerce and Trade (JCCT) talks are set for today and Friday in Beijing. A spokeswoman for the U.S. Trade Representative confirmed the issue will be addressed. "We will be discussing the full range of U.S.-China agricultural trade issues," the spokeswoman said. "Our expectation is that biotech approvals will be handled in a timely and predictable manner, through a transparent, science-based process." And USDA Secretary Tom Vilsack also said the matter would be discussed, telling USDA Radio they would be seeking to get the two countries to synchronize their GMO approvals. "We think we can at least start them simultaneously," Vilsack said. "We think we can speed that process up."

WEEKLY EXPORT SALES OUT THIS MORNING... For the week ended Dec. 12, traders expect: corn sales between 550,000 and 750,000 MT; wheat sales between 300,000 and 400,000 MT; soybean sales between 700,000 and 900,000 MT; soymeal sales between 150,000 and 300,000 MT; and soyoil sales between 10,000 and 30,000 MT.

CHINA REPORTS ANOTHER CASE OF BIRD FLU... Another case of the H7N9 strain for bird flu has been confirmed in the Guangdong province, bring the total number of cases in the province to four since Sunday. Chinese officials has also confirmed a case of H10N8 bird flu, a new strain of the virus, in the Jiangxi province.

INITIAL CASH CATTLE TRADE COMES IN LOWER... A few cash cattle traded $1 to $2 lower than week-ago Wednesday in Nebraska. While most feedlots across the Plains continue to hold out for better cash bids, the initial sales in Nebraska suggest this week's cash activity will be lower than last week's mostly $131 trade in Kansas and Texas.

PORK CUTOUT PLUNGES... The pork cutout value was $2.02 lower Wednesday as all cuts declined, led by a $5.96 plunge in hams. While hog futures posted corrective gains yesterday, buying will be limited to short-covering and the market could face fresh pressure with the pork cutout plunging and futures trading at a sizable premium to the cash index.

OVERNIGHT DEMAND NEWS... Iraq purchased 350,000 MT of Australian wheat.

 

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