First Thing Today (VIP) -- December 23, 2013

December 23, 2013 12:04 AM
 

GOOD MORNING!

LIGHT AND CHOPPY OVERNIGHT TRADE... As of 6:30 a.m. CT, corn futures are steady to fractionally higher, soybeans are mostly 3 to 4 cents higher and wheat futures are narrowly mixed. The U.S. dollar index is under light pressure.

CONGRESS ON HOLIDAY RECESS, BUT STAFF WORK CONTINUES ON SOME ISSUES, INCLUDING FARM BILL... Congress is on recess, with the Senate not returning until Jan. 6 and the House until Jan. 7. Staff work will continue on some areas, however, including the lingering new farm bill and Fiscal Year 2014 appropriation issues. The economic calendar is very light this week due to Christmas. For agriculture, the weekly update on export sales won’t arrive until Friday along with the Quarterly Hogs & Pigs Report. The latter will be watched for any indication of the impact from the PEDV situation. Trading wraps up early on Tuesday and markets are closed Wednesday for Christmas.

HOT, DRY CONDITIONS IN ARGENTINA DRAWING ATTENTION... Heat and dryness built in Argentina last week and is forecast to continue. There is a chance for rains across the country's main grain areas on Wednesday, though the rest of the 10-day outlook calls for generally hot and dry conditions.

CHINA FINDS BIRD FLU IN CHICKEN FLOCK... Chinese officials confirmed a case of H5N2 bird flu on a chicken farm in the northern province of Hebei. The disease reportedly killed 4,000 chickens and a total of 125,700 birds have been culled in the area. Health authorities are encouraging tighter supervision for the disease throughout the country.

USDA PUBLISHES PROPOSAL FOR IMPORTING SOME BRAZILIAN BEEF... The process for importing fresh/frozen beef from 14 Brazilian states has now been published in the Federal Register by USDA's Animal and Plant Health Inspection Service (APHIS), which will accept comments through Feb. 21, 2014. The main issue has been foot-and-mouth disease (FMD) and APHIS concluded there is a sufficient inspection/veterinary infrastructure in Brazil to detect and eradicate any outbreak of the disease. The APHIS filing is just one step as USDA's Food Safety and Inspection Service has to also find Brazil is eligible to export fresh/frozen beef products. The expectation from Brazil is that all of the needed steps should allow for shipments to the U.S. to start by mid-2014 and gain steam in 2015. But the USDA plan has already been criticized by R-CALF and some other groups so the timing expectation from the U.S. side is less clear. Also, Brazil is expected to announce it has completed a BSE risk assessment of the U.S. and should reopen its market to U.S. beef in mid-2014.

COLD STORAGE REPORT OUT THIS AFTERNOON... Traders are expecting pork stocks at the end of November to come in at 549.2 million lbs., according to the average pre-report guess. Beef stocks are guessed at 454.2 million pounds.

CATTLE ON FEED REPORT FRIENDLY FOR DEFERRED FUTURES... Last Friday's Cattle on Feed Report showed the On Feed and Marketings categories relatively close to the average pre-report trade guesses. But Placements were nearly four percentage points lower than expected, which should support deferred live cattle futures.

CASH HOGS CALLED STEADY/WEAKER... While snowy/icy roads and bitter cold temps are likely to slow the movement of hogs across the Midwest today, packers are buying hogs for a holiday-shortened slaughter schedule. As a result, packer demand for hogs will be limited and cash bids are expected to be steady to weaker to open the week.

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

 

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