POSITIVE START TO THE WEEK FOR GRAINS... Grain and soy futures are finding support from building dryness in Argentina and southern Brazil, and persistent drought in the U.S. Plains. Additional support is coming from bold actions by the Bank of Japan to boost its economy. As of 6:30 a.m. CT, corn futures are trading 2 to 5 cents higher, soybeans are 12 to 19 cents higher and wheat future are mostly 3 to 5 cents higher at all three exchanges. The U.S. dollar index is under pressure this morning.
HOUSE GOP DEBT LIMIT PLAN KEY ITEM FOR CONGRESS THIS WEEK... Both the Senate and House return to legislative work today following Monday's inaugural ceremonies for President Obama's second term. The House will not be in session Jan. 24-25, while House Democrats hold their annual party retreat. House GOP leaders want a debate and vote on legislation to temporarily raise the debt ceiling if certain conditions are met. The nation’s debt limit would be suspended until May 19 under legislation proposed Monday by House Ways and Means Chairman Dave Camp (R-Mich.). And if either house fails to adopt a budget resolution by April 15, then the salaries of that chamber’s members would be put in escrow to be paid either when the chamber adopts a budget or the last day of the 113th Congress, whichever comes first. The Senate will consider the Hurricane Sandy relief bill (HR 152) voted out of the House last week on a 241-180 vote. Majority Leader Harry Reid (D-Nev.) also has indicated that senators may vote on filibuster reform by the end of the week.
IRS GRANTS PENALTY WAIVER FOR FARMERS... The IRS announced Friday the agency will waive the normal estimated-tax penalty for farmers and fisherman unable to file and pay their 2012 taxes by the March 1 deadline. The IRS announced it will provide penalty relief to farmers who request a waiver and complete their tax returns by April 15, 2013. A taxpayer qualifies as a farmer or fisherman for tax-year 2012 if at least two-thirds of the taxpayer’s total gross income was from farming or fishing in either 2011 or 2012. Farmers and fishermen requesting this penalty waiver must attach Form 2210-F to their tax return. The form can be submitted electronically or on paper. The taxpayer’s name and identifying number should be entered at the top of the form, the waiver box (Part I, Box A) should be checked, and the rest of the form should be left blank.
REPORT: EPA TO LIKELY DROP PLAN FOR DIRECT FINAL RULE ON 2013 RENEWABLE FUEL STANDARD VOLUME... The EPA will likely issue the renewable fuel standard (RFS) volume requirements for 2013 as a proposed rule rather than a direct final rule, the agency's senior air official told Bloomberg BNA Jan. 18. Gina McCarthy, EPA assistant administrator for air and radiation, said in an interview that the agency had considered issuing the overdue volume standards as a direct final rule. However, "that isn't the case anymore," she said. Issuing the standards, which were due Nov. 30, 2012, as a direct final rule would have bypassed the lengthier proposed rule and public comment process. EPA had said in the updated regulatory agenda issued in December that it intended to issue the requirements as a direct final rule.
RUSSIA MAY CONSIDER LIFTING GRAIN IMPORT DUTY... Russia may consider lifting the 5% duty on grain imports to ensure adequate domestic supplies, a spokesperson for the ag ministry told Reuters. The spokesperson says government leaders will assess sales of intervention stocks before deciding on whether to lift the duty on grain imports. Russia's Deputy Prime Minister Arkady Dvorkovich told Reuters he does not support lifting the import duty.
MEXICO ASSESSING FREEZE DAMAGE TO CROPS... At least 20,000 hectares (49,421 acres) of grains have been damaged by recent sub-freezing temps in Mexico's top corn producing state of Sinaloa, the president of the Mexican Confederation of Corn Growers said last Friday. Mexican officials are still assessing crop damage.
COLD STORAGE REPORT OUT THIS AFTERNOON... The average pre-report guess pegs pork stocks in storage at the end of December at 527 million pounds. Beef stocks are guessed at 449.2 million pounds.
CATTLE TRADERS WAITING FOR SIGNS OF A LOW... To stop the price drop in cattle futures and the cash cattle market, traders will want to see signs of a short-term low in the product market, especially after sharp price pressure on boxed beef prices late last week. Not only will cattle traders want to see boxed beef prices firm, but movement must also improve before there are indications a short-term low is in the works.
CASH HOGS CALLED STEADY/FIRMER... Pork plants are thought to be short-bought on supplies for this week and bitterly cold temps across the Midwest could slow hog movement. As a result, cash sources expect packers to pay steady to firmer bids for cash hogs today. But highly negative cutting margins could limit packers' willingness to raise bids.
WEEKEND DEMAND NEWS... South Korea bought 60,000 MT of feed wheat (likely South American or Indian origin). The United Arab Emirates purchased for 20,000 MT of corn (likely South American), 20,000 MT of feed barley (likely Australian) and 15,000 MT of Australian wheat. Kuwait purchased 22,000 MT of Canadian wheat and 40,000 MT of South American corn. Japan is seeking 118,787 MT of U.S., Canadian and Australian wheat in its weekly tender. Algeria tendered for 50,000 MT of optional origin durum wheat.