First Thing Today (VIP) -- December 3, 2013

December 3, 2013 12:38 AM


CHOPPY TRADE OVERNIGHT... As of 6:30 a.m. CT, corn futures are mixed with a slight downside bias, soybeans are narrowly mixed and wheat futures are steady to 3 cents higher. The U.S. dollar index is lower this morning.

CHINA FINDS MORE UNAPPROVED U.S. CORN... China is likely to reject additional cargoes of U.S. corn after finding more unapproved GMO content, export sources told Reuters. All of the unapproved GMO findings so far have been Syngenta's Agrisure Viptera corn (also known as MIR 162). Importers are reportedly taking a cautious approach to booking more U.S. corn shipments as they wait to see how this situation plays out. Meanwhile, state-run China National Grain and Oils Information Center says U.S. exporters have warned Chinese importers there may be delays in existing deals given the uncertainty of the situation.

FARM BILL PRINCIPALS WILL MEET WEDNESDAY... It was initially hoped that all farm bill conferees would be called into a Wednesday session. While it could still change, at this juncture, only the four "principals" will meet Wednesday -- House Ag Chairman Frank Lucas (R-Okla.) and ranking Ag panel member Collin Peterson (D-Minn.), and Senate Ag Chairwoman Debbie Stabenow (D-Mich.) and ranking Senate Ag panel member Thad Cochran (R-Miss.) -- with a goal of reaching an overall agreement ahead of the full Senate returning next week. Food stamp funding and policy continues to be the major unresolved issue, with sources saying Stabenow is "inching up" regarding the amount of cuts over ten years, but contacts say she is considerably away from the around $10 billion in food stamp funding cuts over ten years that House GOP negotiators would likely take to their leadership. There seems to be little worry on Capitol Hill because lead negotiators believe that a new farm bill could be passed as part of a broader budget agreement, which must be enacted by Jan. 15 to avoid another government shutdown. On Monday, Stabenow did not rule out packaging a farm bill with other must-pass legislation. "I’m taking this one step at a time. That’s how we’ve gotten as far as we’ve gotten," she said in an interview, according to the Washington Post. "I believe this can be done by the end of this year if there’s the political will to do it."

AUSTRALIAN WHEAT CROP FORECAST RAISED... The Australian Bureau of Agriculture and Resource Economics (ABARES) raised its 2013-14 Aussie wheat crop forecast to 26.213 MMT from 24.467 MMT previously, citing favorable weather in Western Australia. ABARES says the bigger crop in Western Australia will more than offset minor frost-related crop losses in some eastern production areas of the country.

BRAZIL MAY START PRODUCING CORN-BASED ETHANOL... Brazil may start producing ethanol from corn as the record 2012-13 crop has left the country with surplus supplies and caused a sharp drop in domestic corn prices. Brazil agriculture policy secretary Neri Geller told Bloomberg yesterday, "We're studying to provide financial support to corn ethanol and to design an agriculture policy for it. Corn ethanol is competitive and is probably the best outlet for the corn surplus."

U.S., JAPAN TALK BUT REACH NO ACCORD ON AGRICULTURAL TARIFFS IN TPP NEGOTIATIONS... A meeting in Tokyo between Japan's chief Trans-Pacific Partnership (TPP) negotiator Akira Amari and U.S. Trade Representative Michael Froman ended without agreement on tariff repeal in five agricultural areas deemed "sensitive" by Japan -- rice, beef and pork, dairy products, wheat and barley, and sugar. Amari said he and Froman held "extremely tough negotiations but there was no conclusion." Tokyo was Froman's first stop on his trip to some of the Asian nations participating in the TPP talks in anticipation of the TPP ministers meeting to be held in Singapore Dec. 7-10. At the Dec. 1 meeting, Froman reportedly urged Amari to agree to phase out and eventually repeal tariffs on the five "sensitive" areas. Amari, however, told Froman he could not offer any additional tariff cuts, the officials said. "We had a frank discussion of our priorities and sensitivities. I am confident that, if the two sides come to the negotiating table with good will, we will be able to find ways to resolve our differences," Froman said in a Dec. 2 statement. Vice President Joe Biden is currently visiting Japan and will meet with Japan's Prime Minister Shinzo Abe to discuss various issues, including the TPP, a spokesman for the prime minister said.

LIGHT BEEF MOVEMENT... Boxed beef prices were firmer Monday, but packers moved only 65 loads of product on the day. If boxed beef movement doesn't increase, packers may be reluctant to raise cash cattle bids as showlist estimates are up across the Plains this week.

PORK CUTOUT FIRMS... The pork cutout value firmed $1.11 Monday despite sharp losses in loins and ribs. While the pork cutout strengthened, movement was relatively light at only 257.3 loads yesterday. Still, the price gains should be enough to keep cash hog bids mostly steady with scattered firmer bids in some areas today.

OVERNIGHT DEMAND NEWS... Egypt tendered to purchase at least one cargo of optional origin wheat. Results of the tender will be known later this morning. Tunisia tendered to buy 109,000 MT of milling wheat and 75,000 MT of barley -- both optional origin.


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