GRAINS SLIGHTLY FIRMER THIS MORNING... As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents higher, soybeans mostly 5 to 9 cents higher, Chicago wheat 1 to 3 cents higher, Kansas City wheat mostly 3 to 4 cents higher and Minneapolis wheat around 1 cent higher. The U.S. dollar index is firmer this morning.
FOUR AG PANEL LEADERS MET TO BEGIN WORK ON COMPROMISE FARM BILL... You know it's farm bill fatigue when it is labeled as progress when the four major leaders of the Ag panels just meet to begin working on farm bill differences between the House and Senate. But the leaders met Tuesday with Senate Ag Chairwoman Debbie Stabenow (D-Mich.) describing the session as "very positive." Committee staff know the issues well and with guidance from lawmakers will begin to sort through the key differences. The hope is that farm bill savings of $23 billion to $35 billion will be needed by congressional leaders in coming up with an end-of-year fiscal cliff package.
COUNTRY-OF-ORIGIN LABELING TIMELINE MEANS ISSUE COULD STILL BE PART OF U.S. FARM BILL... The World Trade Organization (WTO) arbitrator yesterday decided the U.S. has until May 23, 2013, to comply with a WTO decision this summer that the U.S. country-of-origin labeling program (COOL) requirements for meat were discriminatory against livestock from other countries (specifically Canada and Mexico) and therefore are in violation of WTO trade obligations. The COOL topic is expected to be dealt with as part of the new U.S. farm bill. If the U.S. doesn't meet that deadline, then that would open the way for Canada and Mexico to seek approval to take retaliatory action against the United State. Key would be what products they would target as they would likely hit both ag and non-ag goods to increase pressure on the U.S. to change the COOL law.
CANADIAN CROP PRODUCTION UPDATE THIS MORNING... Stats Canada will issue its final production estimates for 2012 crops at 7:30 a.m. CT. The Canadian wheat crop estimate is expected to increase, while the canola and barley estimates are seen smaller than previously indicated. The average pre-report trade guesses put the Canadian all wheat crop at 27.1 MMT, canola at 13.7 MMT and the barley crop at 8.6 MMT.
THINK-TANK 'CAUTIOUSLY OPTIMISTIC' ON CHINA'S ECONOMY... China's economic growth should rise to 8.2% in 2013 from 7.7% this year in response to pro-growth policies, according to the China Academy of Social Sciences in it "blue book" report. But the think-tank warns of possible downside risks due to global economic uncertainties.
BEARISH CASH CATTLE EXPECTATIONS PERSIST... Packers have yet to establish initial bids for cash cattle in the Plains and their demand for animals is expected to be relatively light this week. In addition to bigger showlist supplies, packers are working with highly negative cutting margins and are expected to use contract supplies to fill most of their needs.
PORK MARGINS CONTINUE TO DECLINE... The pork cutout value continues to firm, but is not keeping pace with the rise in cash hog bids. As a result, packer margins are now fully in the red. That may limit demand for cash hogs, although cash sources are still looking for mostly steady cash hog bids across the Midwest today.
OVERNIGHT DEMAND NEWS... South Korea purchased 55,000 MT of U.S. or South American corn. Japan bought 12,000 MT of feed wheat, but passed on the barley portion of its tender. Japan also tendered for 120,000 MT of feed wheat and 200,000 MT of feed barley.