Beans lead price strength overnight... As of 6:30 a.m. CT, soybean futures are trading 10 to 13 cents higher in old-crop contracts and 6 to 7 cents higher in new-crop contracts, corn futures are 1 to 2 cents higher, SRW wheat futures are 1 to 2 cents higher, HRW wheat futures are around 2 cents higher and HRS wheat futures are 3 to 4 cents higher. The U.S. dollar index is posting modest gains this morning.
Firm lowers Brazilian crop estimate... Private firm AgRural cut its Brazilian soybean crop estimate by 1.8 MMT to 87 MMT due to impacts from late-season drought across much of the country's soybean production area. The firm says if rains and cooler temps that arrived in southern Brazil over the weekend linger, it may have to raise its crop estimate.
Record January crush expected... NOPA members are expected to report January soybean crush totaled 162.4 million bu., based on the average trade guess. While that would be down from 165.4 million bu. in December, it would represent record crush for January and would be up from 158.2 million bu. last year. Soyoil stocks are guessed at 1.841 billion pounds.
Both the House and Senate have exited Washington for the week in observance of Presidents' Day... Economic data on tap this week will provide updates on manufacturing, inflation and housing. The biggest economic focus likely will be on the Wednesday afternoon release of the Federal Open Market Committee meeting minutes from the end of January. Key there will be if there was any debate on whether to taper the asset purchases, but with a unanimous vote for the policy state issued after the meeting, there may be little sign of any debate taking place. For agriculture, the big attention getter will be USDA's Ag Outlook Forum held near Washington, DC. The main watch point will be on the economic update from Chief Economist Joe Glauber in which he typically updates USDA’s acreage forecasts from the baseline projections. And Glauber has already said that changes are in store. Besides Glauber’s Thursday remarks, traders may also take note of the updated forecast for the value of U.S. ag exports. The main item for Friday from the Outlook Forum will be the detailed updated Supply & Demand info released by USDA analysts for the 2014 crop year.
Will USDA 'slow walk' food stamp reforms?... Some observers think so. Some state officials must soon decide if they will increase annual utility assistance payments from state programs to thousands of poor households. If not, those households would lose an average of $90 a month in federal food aid via reforms in the 2014 Farm Bill. The deadline for the so-called "heat and eat" states to declare their intentions is murky. USDA is still reviewing the farm bill details and has to devise implementation schedules for programs and directive. They will have to set a deadline for state action and possibly issue guidelines or new rules. In Congress, Sen. Kirsten Gillibrand (D-N.Y.) and other congressional Democrats plan to ask USDA to delay acting on the SNAP food stamp change. Gillibrand is collecting signatures through Tuesday for a letter she will send to USDA Secretary Tom Vilsack urging delay. The new farm bill targeted 15 "heat and eat" states and the District of Columbia that use nominal payments to direct food stamps benefits to many people whose rent payments include utilities, so they don’t have a separate gas or electric bill to show. Those nominal payments from the states result in an increase in monthly SNAP benefits for those households that’s larger than the LIHEAP payment. The farm bill raised the threshold for states’ annual utility payments to households to $20, up from the nominal annual payments of $1 or less that these states made from their federal LIHEAP funding. Over 10 years, CBO projects an $8.6 billion cut in SNAP spending if the "heat and eat" states and the District choose not to dip into limited energy grant money to make the larger, $20 payments now required. Other food stamp reforms were included in the farm bill, but sources signal Vilsack has already discussed "creative ideas" around some of the reforms.
No near-term path for bill to renew, modify expired biofuel tax incentive... Reports last week regarding an expected congressional push to retroactively extend the lapsed biodiesel tax incentive did not reveal the very slow timeline most expect to even discuss the matter, let alone clear it. The measure faces a very likely long and difficult road ahead in Congress. Sens. Maria Cantwell (D-Wash.) and Chuck Grassley (R-Iowa), both Finance panel members, proposed via legislation (S 2021) to lengthen and strengthen an expired clean energy tax provision. The bill would address one of the nearly 60 lapsed deductions, credits and other tax provisions known as extenders that expired after Dec. 31, 2013. The bill relates to biodiesel production incentives. The bill would extend the $1-per-gallon tax credit for biodiesel producers for three more years, through 2017, and bumps that credit up to $1.10 for the first 15 million gallons made by small producers that generate less than 60 million gallons annually. The legislation also would redefine qualifying material as any biodiesel. New Senate Finance Committee Chairman Ron Wyden (D-Ore.) is prioritizing the currently lapsed bloc of extenders, and has on several occasions singled out those related to alternative energy as particularly important to renew. But his counterpart in the House, Ways and Means Committee Chairman Dave Camp (R-Mich.), prefers to deal with extenders via efforts to reform the U.S. tax code -- and that process is a later rather than sooner timeline, especially in this Congress and ahead of November elections.
Cargill won't accept Duracade corn... Cargill announced late last Friday it will not accept deliveries containing Syngenta's Agrisure Duracade corn, which is commercially available for planting in the U.S. this year, but not yet approved by China or the European Union. Bunge indicated earlier last week it would not accept Duracade corn.
Bullish cash cattle hopes... Cash cattle traded at $142 in Kansas and Texas to $143 in Nebraska last Friday, which was steady to firmer compared with the previous week. Plus, boxed beef prices were sharply higher to start the week on decent movement, which is fueling hopes the wholesale beef market is bottoming after the sharp price pullback. As a result, traders start the week with bullish cash hopes.
Cash hogs called steady/firmer... Packers are expected to pay steady to firmer prices for cash hogs as several plants were closed for Presidents Day and are short-bought on supplies for the week. Strong margins give packers incentive to keep kill lines as full as possible.
Weekend demand news... Libya purchased 30,000 MT of Black Sea corn.