First Thing Today (VIP) -- January 13, 2014

January 13, 2014 12:22 AM

Good morning!

Corn and wheat firmer, beans weaker overnight... As of 6:30 a.m. CT, corn futures are trading around 1 cent higher, soybeans are fractionally to 4 cents lower in most contracts, SRW wheat futures are 3 to 4 cents higher, HRW wheat futures are mixed and HRS wheat futures are mostly 1 to 3 cents higher. The U.S. dollar index is modestly weaker this morning.

FY 2014 omnibus spending bill and farm bill the focus of Congress this week... The Senate resumes consideration of extending unemployment benefits (S 1845) while farm bill principals seek a compromise on dairy policy issues as a lingering dispute regarding supply management stands in the way of announcing an overall conference agreement. Meanwhile, a three-day continuing resolution (CR) will be voted on to give lawmakers still more time to work on an omnibus spending bill for Fiscal Year 2014, which began Oct. 1. On the energy front, Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.) is forming a new Climate Action Task Force, and members of the new group will hold a press conference on Tuesday. Of note is Thursday's hearing on President Obama's climate agenda. Environmental Protection Agency Administrator Gina McCarthy will testify before the Environment and Public Works Committee.

Lucas and Stabenow both working on dairy policy options... The last significant remaining farm bill issue is dairy policy -- how to come up with a program that does not include supply management, but still can get the support of Rep. Collin Peterson (D-Minn.), the lawmaker who has pushed the policy despite major and sustained opposition from House Speaker John Boehner (R-Ohio). There are several options being discussed to send dairy producers the signal to cut back on production if budget costs accelerate. These include reducing the premium subsidy and/or lowering the margin coverage benefit. Farm bill contacts say they can't believe Peterson would bring down the entire farm bill over one aspect of a dairy reform plan, when some options could be made to help deal with his concerns.

Argentina raises wheat crop estimate... Argentina's 2013-14 wheat crop estimate was raised to 9.2 MMT from 9.0 MMT previously by the country's ag ministry. The ministry cited better-than-expected yields as the primary reason for the increase. Exporters and imports are waiting on the Argentine government to announce wheat export permits for 2013-14.

China bird flu update... Chinese health officials confirmed six new human cases of H7N9 bird flu in the country over the region. Two cases were reported in Guangdong, three cases were confirmed in Zhejiang and one case was reported in Jiangsu.

Will record run continue in cattle, beef markets?... Boxed beef prices (Choice and Select) rallied to record levels last week, which prompted record cash cattle trade of $139 to $140 in the Plains. Despite the record strength in the cash and product markets, buying interest in cattle futures was limited and February live cattle futures ended last week more than $2 below the bottom end of the last week's cash trade. That suggests traders feel the cash and product markets are nearing a short-term top.

Cash hogs expected to trade mostly steady... Packers are expected to open the week with steady cash hog bids at most Midwest locations. But after slowed hog movement last week due to inclement weather, some plants have a greater need for slaughter supplies than they typically would have to start the week. Therefore, some firmer cash hog bids are possible.

Weekend demand news... Egypt purchased 55,000 MT of U.S. SRW wheat. South Korea bought 137,000 MT of U.S. corn originally destined for China.


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