First Thing Today (VIP) -- December 20, 2013

December 20, 2013 12:08 AM
 

GOOD MORNING!

CORN AND WHEAT WEAKER, BEANS FIRMER... As of 6:30 a.m. CT, corn futures are around 2 cents lower, soybeans are mostly 2 to 4 cents higher and wheat futures are fractionally to 2 cents lower. The U.S. dollar index is modestly firmer this morning.

CHINA CONFIRMS BIGGER U.S. CORN REJECTIONS... China has reject a total of 545,000 MT of U.S. corn so far due to the presence of MIR 162 (Syngenta's Agrisure Viptera), which is unapproved in the country, according to quarantine officials. That tonnage lines up with what we reported earlier this week. The issue of approval of MIR 162 and other biotech issues was raised at Joint Commission on Commerce and Trade (JCCT) talks between U.S. and Chinese officials this week. USDA Undersecretary Michael Scuse said USDA Secretary Tom Vilsack "is making every effort" to get the issue resolved as quickly as possible. Because of China's "burdensome" process for biotechnology approvals, "this is not going to be just a United States-Chinese issue." Unless China changes the approval process, there are other countries that also face trade disruption, he said.

USDA OFFICIAL COMMENTS ON U.S.-BRAZIL COTTON TRADE DISPUTE... USDA's Scuse also commented on the long-standing World Trade Organization (WTO) dispute with Brazil over U.S. cotton subsidies. Brazil has been awaiting the U.S. to conclude a farm bill, Scuse said. "Hopefully when we do finally have a farm bill it will address the issues Brazil has raised," he said. Brazil has been weighing whether to proceed with WTO-authorized trade sanctions on U.S. imports after the U.S. government suspended monthly payments that amounted to $147.3 million annually to finance technical assistance for Brazilian cotton farmers because of sequestration. Brazil's Foreign Trade Chamber (Camex), the government's foreign trade policy making body, will initiate public consultations in January 2014 on the issue.

EFFORT TO PASS TAX EXTENDERS BILL BY UNANIMOUS CONSENT IN SENATE REJECTED... A largely symbolic move to renew dozens of tax extenders failed in the Senate after an objection by Senate Minority Leader McConnell (R-Ky.), but Senate Finance Committee members said they plan to push for a bill of their own in early 2014. The Democratic motion would have extended all 57 of the tax breaks collectively referred to as extenders, including the $1 biodiesel tax incentive. Any single senator may stop a request by unanimous consent to set aside a rule.

SENATE TO RECESS AFTER TODAY; YELLEN NOMINATION PUSHED TO JANUARY 2014... The Senate holds its final votes of the year today after agreeing Thursday night to push Janet Yellen’s confirmation to head the Federal Reserve Board to Jan. 6. Majority Leader Harry Reid (D-Nev.) plans to keep the chamber in session long enough to confirm three more nominees.

PROGRESS IN U.S., CHINESE BEEF TRADE TALKS... U.S. and Chinese officials took a step forward in restarting U.S. beef exports to China, which have been restricted since 2003, at this week's JCCT talks. But China's Vice Agriculture Minister Niu Dun says the countries are still working on agreement on the range of products to be approved as well as safety and traceability. He's hopeful final agreement can be reached by "next July."

CATTLE ON FEED REPORT OUT THIS AFTERNOON... Traders are expecting USDA's monthly Cattle on Feed Report to show On Feed at 95.4%, Placements at 100.9% and Marketings at 94.6% of year-ago levels, based on the average pre-report guesses. A smaller feedlot inventory is a given. The "read" from the data will be in the Placements category as the guess range is from 5.0% below to 4.2% above year-ago.

MORE CATTLE TRADE AT LOWER PRICES... A few feedlots moved cash cattle at $130 in Texas and Kansas yesterday, $1 below the bulk of last week's trade, though sales weren't active. With packers buying cattle for back-to-back holiday-shortened weeks, feedlots will likely have to decide whether to move cattle at lower prices tomorrow or wait until after the holidays to get caught up on marketings.

PORK PLUNGE CONTINUES... The sharp drop in pork product prices continued yesterday as the cutout value was $2.58 lower. All cuts except loins were lower, with bellies plunging $11.74. While pork product movement has been strong, it will be difficult for futures to put in a seasonal low until the plunge in the cutout value halts.

OVERNIGHT DEMAND NEWS... Japan bought 109,244 MT of wheat, all from the U.S., in its weekly tender.

 

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