GRAINS UNDER PRESSURE... As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents lower, soybeans are 1 to 9 cents lower, Chicago wheat is 3 to 5 cents lower, Kansas City wheat is 4 to 6 cents lower and Minneapolis wheat is 1 to 2 cents lower. The U.S. dollar index is sharply higher this morning.
USDA OUTLOOK FORUM BEGINS TODAY... The opening session of the Annual Outlook Forum held by USDA near Washington, DC, will be the focal point for markets as they await the presentation of USDA Chief Economist Joe Glauber. Sometimes, Glauber will offer up a rather detailed look at the ag situation for the year ahead, although in recent years he has opted to paint a broad brush picture of the year ahead and leave the details on the balance sheets for commodities to the outlooks delivered by USDA analysts on Friday morning. And the remarks by USDA Secretary Tom Vilsack always hold the potential for "news."
BRAZIL PORK WORKERS TO STRIKE FRIDAY, NEXT TUESDAY... Brazilian port workers are planning a nationwide strike Friday morning and next Tuesday afternoon in protest over the government's plan to privatize ports, according to a union official. He said a longer strike can't be ruled out if the government continues with its plan to modernize ports, which port workers feel will eliminate some jobs. With soybean shipping season about ready to begin, labor unrest in Brazil will be closely monitored. Any prolonged shipping disruptions in Brazil could keep the export window for U.S. beans open longer than anticipated.
CROP INSURANCE PAYOUTS NEAR $15 BILLION... The record for payouts under the crop insurance program continues to rise, reaching $14.7 billion as of Feb. 18, according to the Risk Management Agency, boosting the loss ratio for the overall program to 1.33. For corn, payouts have reached $9.652 billion, pushing the loss ratio for that crop to 2.24 -- for every $1 in premiums paid in, the program is paying out $2.24. Cotton ($1.040 bil.) and soybeans ($1.908 billion) are the only other major commodities with more than $1 billion in indemnities for 2012 crops. The record level of payouts will continue to be the focus of anti-subsidy folks in Washington and they will point to 2012 as a reason why the premium subsidy should be reduced. The 2012 crop year marks the first time since 2002 where the loss ratio has been above 1.0 for the program.
FEDERAL FURLOUGHS LIKELY TO HIT BY APRIL... More than one million federal employees would likely be forced to take unpaid leave beginning in April as part of a widespread reduction in spending set to start next month barring congressional intervention, according to the Wall Street Journal. That means the eventual impact of the cuts at many agencies could be slow-moving and give Congress and the White House more time to negotiate an alternative to the cuts -- something both sides say they favor. USDA has said that to account for a $51 million cut in its food-safety branch, it plans to furlough meat inspectors for 15 days at more than 6,000 meat-production facilities in the United States. USDA Sec. Vilsack said in a letter to American Meat Institute last week that such furloughs would be a "last option" but ultimately unavoidable.
CHINA CONSIDERING MORE COTTON IMPORT QUOTAS... China's Ministry of Commerce is planning to issue more cotton import quotas to help export-based mills that are seeing margins squeezed by high domestic prices, according to state-run China Securities Journal. The story cites the China National Textile and Apparel Council as saying firms with a "processing trade" tag can apply for tariff-free quotas once they have secured export orders for the products that will be produced, without giving a starting date or tonnage for the new quotas.
CASH CATTLE TRADE STEADY... Cash cattle trade got started at steady $123 prices in the Plains Wednesday as some feedlots got spooked by sharp losses in futures. Most feedlots have yet to move cattle, but given highly negative packer margins and limited packer demand, yesterday's cash prices are probably about the best they can hope for this week.
PORK MARGINS CONTINUE TO IMPROVE... The combination of lower cash hog bids and rising pork product prices this week has greatly improved pork cutting margins. Despite the improved margins, packers aren't likely to raise cash hog bids as the bulk of this week's slaughter needs have already been secured.
WEEKLY EXPORT SALES DELAYED... Due to Monday's government holiday, USDA's export sales data for the week ended Feb. 14 is delayed until Friday morning.
OVERNIGHT DEMAND NEWS... Taiwan bought 60,000 MT of Argentine corn. Oman bought 20,000 MT of Argentine corn. Japan purchased 65,991 MT of wheat from its weekly tender, including 41,405 MT of U.S. supplies. Iran bought 180,000 MT of Australian wheat.