First Thing Today (VIP) -- December 26, 2013

December 26, 2013 12:21 AM


NO OVERNIGHT TRADE... There was no overnight trade coming out of Christmas. Grain markets will reopen at 8:30 a.m. CT, while livestock markets resume trading at 9:05 a.m.

CHINA REJECTS FIRST U.S. DDG SHIPMENT... China has rejected 2,000 MT of dried distillers grains (DDGs) due to the presence of MIR 162 (Syngenta's Agrisure Viptera), a GMO trait that the country has not yet approved, trade sources told Reuters. This is the first rejection of U.S. DDGs by China, but more are expected as Chinese quarantine authorities have reportedly been told to increase inspections.

REPORT: CHINA'S ECONOMY GREW AT 7.6% THIS YEAR... China's full-year economic growth is forecast at 7.6%, which would hit the government's target, according to a report from the State Council. But that would be down a tick from 7.7% growth in 2012. Earlier this week we reported China is likely to set a GDP growth target of 7.5% for 2014.

CHINA: NO CHANGE TO FARMLAND, FOOD SECURITY GOALS... China will stick with policies to maintain food self-sufficiency and protect farmland from urban encroachment, dousing speculation that new reforms would give the market a bigger say in food supply and rural development. A meeting of the ruling Communist Party attended by President Xi Jinping said China would continue to ensure that at least 1.8 billion mu (120 million hectares) of rural land would be reserved for agricultural use, a policy known as the "red line," China Central Television (CCTV) reported. Economists and others have urged the government to abandon the "red line," and have also said it should relax its long-standing 95% self-sufficiency target and make better use of global markets. While the report did not mention the 95% figure, it said self-supply would remain the key to China's efforts to "seize the initiative on food security." China will also seek to create a better-paid "professional" farming sector and improve services and infrastructure in the countryside, reports from the Tuesday meeting said. China unveiled a series of reforms in November that would lift restrictions on the transfer of collectively-owned land. But senior officials have made it clear that the market would continue to play only a limited role in land transfers and that food security remained the "bottom line."

JAPAN'S USE OF FEED CORN IN OCTOBER DOWN FROM YEAR-AGO, UP FROM MONTH-AGO... Japan's use of corn in animal feed was 43.6% in October, down from 47.5% in October 2012. But corn in feed rations increased from 41.8% in September as falling corn prices are starting to encourage a slight pickup in use.

WEEKLY EXPORT SALES DELAYED... Due to the Christmas holiday, USDA's weekly export sales data for the week ended Dec. 19 is delayed until Friday.

U.S. AMBASSADOR: U.S. LOST MILLIONS, NOT BILLIONS OVER RUSSIA MEAT BAN... The U.S. has lost millions of dollars as the result of a Russian ban on American meat products, and not billions as was recently erroneously reported in an interview with a Russian newspaper, U.S. Ambassador to Russia Michael McFaul said today. The U.S. has lost $5-6 million as a result of the ban, not $5-6 billion, McFaul wrote in a link to the interview with the Kommersant business daily on Facebook. "That was a mistake," McFaul wrote, though he did not say who was responsible for the error. In the interview with Kommersant published Wednesday, McFaul had said that Russia’s ban on U.S. pork and beef imports over concerns about the growth additive ractopamine, which took effect in February, was a big problem for the United States. About two dozen countries have approved ractopamine as safe for use, but the European Union, China, Taiwan and several other countries have joined Russia in banning use of the drug.

CASH CATTLE UNCERTAINTY... Cash cattle negotiations have yet to get started in the Plains, meaning there's a lot of ground to cover the final two days this week. Most traders are expecting mostly steady cash cattle prices. But if packers fail to offer steady bids, there's some belief that feedlots may not move many cattle in hopes of better bids next week.

CASH HOGS CALLED STEADY... While market-ready hog supplies are plentiful, some plants still need hogs for late-week kills and for early next week. Therefore, there may be enough demand to hold cash hog bids steady at most Midwest locations today.

HOLIDAY DEMAND NEWS... Jordan made no purchase in a tender to buy 100,000 MT of optional origin wheat, but reissued a similar tender. Bangladesh received no bids in a tender to buy 50,000 MT of optional origin wheat.


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