First Thing Today (VIP) -- January 15, 2013

January 15, 2013 12:28 AM
 

GOOD MORNING!

GRAINS MIXED TO MOSTLY FIRMER... As of 6:30 a.m. CT, corn futures are trading narrowly mixed, soybeans are 4 to 9 cents higher, Chicago wheat is around a nickel higher, Kansas City wheat is 4 to 6 cents higher and Minneapolis wheat is 4 to 7 cents higher. The U.S. dollar index is firmer this morning.

VILSACK CONFIRMS ACRE OPT OUT, BUT NO SPECIFICS ON FARM PROGRAM SIGNUP... Farmers enrolled in the Average Crop Revenue Election (ACRE) program during the 2009-2012 crop years will be able to opt out of the program for 2013, USDA Secretary Tom Vilsack said Monday. "We will see how many that were in ACRE will opt out," he said at the American Farm Bureau Federation meeting. "It is not as attractive." Signup for the 2013 crop year farm programs will take place "well before" fall, but Vilsack did not offer any specific dates. Further, Vilsack continued to express concern Congress could still reduce direct payments as they search for budget savings.

JAPAN RELAXES AUSSIE WHEAT IMPORT REQUIREMENTS... Drought could halve output of Australian Noodle Wheat (ANW) production in Western Australia this year. As a result, Japan has reduced the amount of ANW required in imports from Australia. Japan will now require wheat shipments from Australia contain 55% ANW and 45% Australian Premium Wheat (APW). Previously, Japan required shipments to contain 60% ANW and 40% APW.

UKRAINE GRAIN OUTPUT FALLS 18.6%... Ukraine's grain production totaled 46.17 MMT in 2012, down from 56.75 MMT in 2011, according to the State Statistics Service. Wheat production dropped 19.4% to 15.76 MMT, while corn production declined 8.4% to 20.92 MMT. Ukraine's ag ministry hopes for improved production this year as last year's crop faced multiple weather hurdles.

REPORT: COOL HAS COST CANADIAN PORK PRODUCERS NEARLY $2 BILLION... U.S. mandatory country-of-origin labeling (COOL) has cost Canadian pork producers over $1.9 billion as of October 2012 and the figure likely topped $2 billion by the end of last year, according to a report prepared for the Canadian Pork Council (CPC). The report estimates that $357 million in pork trade has been lost since the implementation of COOL and the feeder pig sector has suffered an additional $85 million. Damages from slaughter hog price suppression and indirect effects from a reduced sow herd have not been calculated. "In the event the U.S. does not come into compliance or find resolution to the COOL dispute, the report's findings that the current annual rate of damage accumulation is almost $500 million, can be used to estimate retaliatory tariffs on U.S. exports to Canada," said CPC Chairman Jean-Guy Vincent.

UNINSPIRING PERFORMANCE IN BOXED BEEF MARKET... Boxed beef prices were 15 cents lower (Choice) to $1.27 higher (Select) Monday, while packers moved a decent 170 loads of product on the day. Unless boxed beef prices, especially Choice cuts, and movement strengthen, packers will be reluctant to pay higher prices for cash cattle this week as cutting margins are deep in the red.

POOR START IN PORK PRODUCT MARKET... The pork cutout value was 48 cents lower and packers moved only 31.5 loads of product Monday. While some plants offered steady to firmer bids for cash hogs yesterday, the poor performance in the pork product market is expected to result in steady to lower cash hog bids at most locations today, especially with cutting margins in the red.

OVERNIGHT DEMAND NEWS... Taiwan tendered for 60,000 MT of U.S., Brazilian or Argentine corn. Japan is seeking 118,746 MT of U.S. and Canadian wheat in its weekly tender. Morocco tendered for 160,000 MT of U.S. durum wheat.

 

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