CHOPPY TRADE IN GRAINS... Grain and soy futures were choppy through the overnight hours. As of 6:30 a.m. CT, corn futures are trading fractionally to 2 cents higher, soybeans fractionally to 2 cents lower and wheat futures are mostly 1 to 2 cents higher at all three exchanges. The U.S. dollar index is under pressure this morning.
WHITE HOUSE QUICKLY REJECTS GOP FISCAL CLIFF COUNTER OFFER... It did not take long for White House officials to brand the House GOP counteroffer regarding fiscal cliff issues as "unbalanced" and "nothing new." Veteran Washington contacts say current talks and comments from both political parties on fiscal cliff issues are mostly posturing ahead of hard decisions both political party leaders must make in forthcoming compromises on increased revenue (Republicans) and cuts and comprehensive reform for entitlement programs (Democrats). Most signal the real negotiations and counteroffers won't begin in earnest until mid-December. Veteran observers believe that eventually both sides will have to give in what will be a two-stage deal -- Republicans on both tax rates and revenue, and Democrats on more entitlement spending cuts and enforceable entitlement reform. While financial markets are signaling they think a fiscal cliff deal will occur by year's end, others are not so sure, but think if there isn't a deal by Dec. 31 one would very likely happen in early 2013.
ABARES CUTS AUSSIE WHEAT CROP FORECAST... The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) lowered its wheat crop forecast to 22.03 MMT from 22.54 MMT previously. The bureau says while dry weather trimmed production, yields have generally been better than many feared. The new Australian wheat crop is now seen 26% below last year's record production of 29.5 MMT.
UKRAINE HOPES FOR VOLUNTARY WHEAT EXPORT HALT... It appears Ukraine will stop short of officially halting wheat exports, but ag ministry officials are hopeful exporters will adhere to an agreed-to cap on wheat shipments, which has already been reached, until they can reassess the supply situation next spring. The country's ag minister says the country will "take action" if the domestic supply is jeopardized.
WTO DECISION EXPECTED TODAY RE: TIMELINE FOR U.S. REGARDING COOL ISSUES WITH CANADA, MEXICO... The World Trade Organization (WTO) is expected to determine by early as today the deadline for the U.S. to comply with a WTO dispute decision faulting U.S. country-of-origin labeling (COOL) requirements for meat. The U.S. and Mexico previously indicated the arbitrator's decision on the compliance deadline would be circulated by Dec. 4. Canada and Mexico, the two complainants in the case, requested WTO arbitration Sept. 13 after they were unable to reach an agreement with the U.S. on a "reasonable period of time" for Washington to ensure compliance with the ruling.
UPHILL BATTLE FOR FEEDLOTS IN CASH CATTLE NEGOTIATIONS... Showlist numbers in Nebraska and Colorado are up sharply from week-ago, while market-ready supplies are thought to be about steady in Kansas and Texas. Unless the boxed beef market turns in an impressive performance, packers will be reluctant to pay steady to firmer prices for cash cattle given highly negative margins. While boxed beef prices were mildly firmer Monday, packers moved only 141 loads of product on the day.
CASH HOGS TOPPING?... Pork cutting margins have significantly tightened and some plants are now cutting in the red. As a result, demand for cash hogs is expected to decline. Cash hog bids are expected to be steady at most Midwest locations today, but it wouldn't be surprising to see some scattered weaker bids surface.
SUSPECTED FMD CASE IN SOUTH KOREA... South Korea has found a domestic cow with suspected foot-and-mouth disease (FMD) at a farm in the northern Gyeongsang province southeast of Seoul, the agriculture ministry says. Test results will be available later today.
OVERNIGHT DEMAND NEWS... Taiwan purchased 60,000 MT of Brazilian corn, but passed on a tender for 60,000 MT of soybeans. Japan is seeking 196,383 MT of U.S. and Canadian wheat in its weekly tender.