First Thing Today (VIP) -- December 27, 2013

December 27, 2013 12:09 AM


CORN AND BEANS MILDLY FIRMER, WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are fractionally higher, soybeans are 4 to 5 cents higher and wheat futures are narrowly mixed. The U.S. dollar index is under heavy pressure this morning.

CHINA TO END SOYBEAN, COTTON STOCKPILING... China will soon end its government stockpiling program for soybeans and cotton and replace it with subsidies for farmers, according to a Xinhua new report quoting the country's finance minister. The official says the Chinese government will set target prices for the two commodities and offer direct subsidies to farmers. Imports will reportedly be used to refill state reserves, when needed. The minister gave no specific timeframe for when the shift in policy will officially happen.

MINISTRY RAISES DECEMBER CHINESE SOY IMPORT FORECAST... China is now forecast to import 6.67 MMT of soybeans this month, according to the ministry of commerce, up from its previous projection of 6.34 MMT. The updated forecast is based on shipments received the first half of December. The ministry forecasts January Chinese soy imports will fall to 2.37 MMT.

KEY HOUSE DEMOCRAT LINKS DEMOCRATIC SUPPORT FOR FARM BILL WITH EXTENSION OF UNEMPLOYMENT COMPENSATION... Rep. Chris Van Hollen of Maryland said he wants colleagues to withhold much-needed Democratic votes on any final House-Senate farm bill (HR 2642) unless Republicans agree to extend unemployment compensation. Congressional Democrats on Thursday denounced the coming expiration (Saturday) of emergency unemployment insurance, and reiterated that they will seek the program’s extension in the new year. Since 2008, the federal government has provided money to those who are without a job for longer than 26 weeks and for up to 99 weeks. House Minority Whip Steny Hoyer (D-Md.) said that without an extension, 1.3 million people will immediately lose those benefits. House Speaker John Boehner (R-Ohio) has previously said the chamber will not pass such a bill unless the benefits are offset with spending cuts elsewhere. A full one-year extension would likely cost about $25 billion.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Dec. 19, traders expect: corn sales between 550,000 and 750,000 MT; wheat sales between 350,000 and 550,000 MT; soybean sales between 500,000 and 700,000 MT; soymeal sales between 50,000 and 150,000 MT; and soyoil sales between 0 and 15,000 MT.

H&P REPORT OUT THIS AFTERNOON... USDA's quarterly snout count is expected to show a U.S. hog inventory about in line with year-ago, but the data is also expected reflect plans for herd expansion moving forward. The average pre-report guesses put All Hogs and Pigs at 99.9%, Kept for Breeding at 101% and Kept for Marketing at 99.8% of year-ago.

STILL NO CASH CATTLE TRADE... Not surprisingly, there was little progress on cash cattle negotiations in the Plains yesterday. While cattle trade will occur today, though possibly after futures stop trading for the week, it remains uncertain at what price that cash trade will take place and how many animals feedlots will sell if prices aren't at least steady with last week's $130 trade in the Plains.

SLUGGISH POST-CHRISTMAS WHOLESALE PORK TRADE... After flashing hints that a seasonal low may be in the works on Tuesday, the pork product market featured sluggish trade coming out of Christmas. The cutout value dropped 33 cents yesterday and packers moved only 269.84 loads of product on the day. Until there are clear signs of a seasonal low in the pork product market, lean hog futures will struggle to find a bottom.

OVERNIGHT DEMAND NEWS... South Korea passed on a tender to purchase 70,000 MT of optional origin corn.


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