First Thing Today (VIP) -- January 15, 2014

January 15, 2014 12:02 AM

Good morning!

Corn and wheat lower, beans mostly firmer overnight... As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are fractionally to 2 cents higher through the September contract and wheat futures are fractionally to 2 cents lower in most contracts. The U.S. dollar index is firmer this morning.

Peterson open to dairy issue compromise in farm bill talks... House Agriculture Committee ranking member Rep. Collin Peterson (D-Minn.) said Tuesday he is open to considering a farm bill dairy compromise that House Ag Chairman Frank Lucas (R-Okla.) and staff are working on. "I don't really have a problem if it works," he said. "If you come up with something that actually works and I'm upset, that's fine." Peterson was reportedly briefed on a compromise late Tuesday. However, Peterson said he is not interested in a compromise proposal developed by Ohio State University economists that would allow farmers to choose between keeping the 2008 Farm Bill's milk subsidy program or going to the new margin insurance program, but without supply management. "The Ohio State concept will not work. It won't provide a safety net," Peterson said. The coming compromise could be a "counter-cyclical type" approach whereby producer subsidies and/or margin coverage could be adjusted to limit budget exposure.

Strong crush figure expected... NOPA members are expected to report soybean crush totaled 163.9 million bu. in December, which would be up from 160.145 million bu. in November and 159.899 million bu. in December 2012. Soyoil stocks are guessed at 1.555 billion pounds.

China rejects more U.S. DDGs... Trade source tell Reuters China has rejected more U.S. dried distillers grain (DDG) shipments at the northern port of Qingdao due to the presence of MIR 162 (Syngenta's Agrisure Viptera), though the quantity is unspecified and quarantine authorities have yet to confirm the rejections. China was expected to relax inspections of U.S. DDG shipments, though trade sources tell Reuters the checks remain tight.

China has no timeline for commercialization of GMOs... China doesn't have a specific time table for the commercialization of domestically developed GMO corn and rice strains, according to the country's vice ag minister. The country is taking what he says are "active but cautious measures" on the GMO front. He says, "We will actively strengthen scientific research and develop new strains with our own intellectual property rights... while we will be cautious in commercialization and application to ensure safety of the products."

India expects record wheat crop... India's 14 wheat crop is likely to be record-large, according to Farm Minister Sharad Pawar. He expects the crop to top 100 MMT, which would be up from output of 92.46 MMT last year and well above the current record crop of 94.88 MMT in 2011-12.

Fed hawks want to step up taper timeline... Two voters on the Federal Reserve for 2014 on Tuesday expressed their view that the tapering of asset purchases should be wrapped up before the end of this year. Philadelphia Fed President Charles Plosser said his "preference would be that we conclude the purchases sooner" than the end of 2014. In addition, Plosser said the December jobs data did not sway his opinion that the employment situation was improving. Dallas Fed Richard Fisher said that he wanted a larger taper in December -- $20 billion versus the $10 billion the Fed announced. In addition, Fisher said the action was the start "for we have more to do on this front -- to clarify our intentions for managing the overnight money rate." Fisher also said he would not hesitate to keep the taper going even if there is a correction in the U.S. stock market.

Another surge in wholesale beef prices... Choice boxed beef prices surged $4.10 Tuesday, while Select rose $4.59 as the runup to record price levels continued. Given surging wholesale beef prices and tight market-ready supplies, feedlots are expecting to get record cash cattle prices again this week. But packers have been slow to establish initial cash cattle bids and traders are sensing a short-term market top can't be far off.

Pork cutout firms... With wholesale pork prices cheap compared to beef, retailers are ramping up pork purchases. Packers moved a strong 471.94 loads of pork Tuesday amid a $1.65 rise in the cutout value. Surging beef prices appear to be helping the pork product market in its effort to put in a seasonal low.

Overnight demand news... South Korea tendered to buy up to 140,000 MT of optional origin corn and 70,000 MT of optional origin feed wheat. Bangladesh tendered to buy 50,000 MT of optional origin wheat.


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