Mildly firmer tone in grain/soy futures overnight... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are steady to 4 cents higher amid light bull spread unwinding, SRW wheat futures are 1 to 2 cents higher, HRW wheat futures are 3 to 4 cents higher and HRS wheat futures are mostly 2 to 5 cents higher. The U.S. dollar index is holding near unchanged this morning.
China January soy imports seen up sharply from year-ago... China will likely import 5.35 MMT of soybeans this month, according to state-run China National Grain and Oils Information Center (CNGOIC). That's higher than the Ministry of Commerce's 4.61-MMT forecast. While China's January soybean imports are expected to be down sharply from the two previous months, CNGOIC's forecast would be nearly 12% higher than year-ago.
China has not yet set target prices for soybeans, cotton... China is still researching how it will set farmer target prices for soybeans and cotton as the central government replaces its stockpiling program for those commodities this year. The head of China's top ag policy-setting office says the government will consider domestic and international prices, along with the domestic supply/demand situation when setting those prices. Farmers will be paid when the market price falls below the target price. The official says the government is looking for a price "that is appropriate for farmers, that farmers can accept and that the market doesn't have big problems with." Meanwhile, he also says China will look to maintain near full self sufficiency on wheat and rice, but will likely import more soybeans and corn to meet rising demand.
Crop insurance payouts clear $9 billion... Indemnities for 2013 crops have reached $9.147 billion as of Jan. 20, according to Risk Management Agency (RMA) data. Payouts for corn remain the largest at $3.78 billion, while wheat indemnities are at $2.23 billion. Soybean payouts are closing in on $1 billion, having reached $907 billion. However, the level of total indemnities still is well below the record of $17.4 billion paid out for the 2012 crop. In 2012, indemnities for corn alone totaled $11.8 billion.
Frozen pork, beef stocks seen up slightly from month-ago, down from year-ago... USDA's Cold Storage Report this afternoon is expected to show pork stocks at 548.2 million lbs. at the end of December, while beef stocks are guessed at 451.4 million pounds. Both average pre-report guesses would be up slightly from the end of November, but down modestly from December 2012 levels.
Beef price surge continues... Choice boxed beef prices surged $3.16 and Select boxes were $2.70 higher Tuesday, though movement slowed to only 96 loads. With wholesale beef prices continuing to surge, traders are hopeful packers will again raise cash cattle bids this week. But cattle traders know the record surge in boxed beef and cash cattle prices will eventually end and are therefore comfortable with futures trading below last week's cash trade.
Pork cutout slips... The pork cutout value dropped 83 cents Tuesday as belly prices plunged $8.60 and offset gains in all other cuts. While surging wholesale beef prices are encouraging retailers to more actively buy pork, yesterday's price performance is a reminder that the road to a seasonal price recovery in the pork product market is likely to be more bumpy than smooth.
Overnight demand news... Algeria purchased around 500,000 MT of optional origin milling wheat. Japan bought 15,150 MT of feed wheat and 86,850 MT of feed barley.