First Thing Today (VIP) -- January 23, 2013

January 23, 2013 12:38 AM


GRAINS MIXED TO MOSTLY FIRMER... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are fractionally to 3 cents higher in old-crop contracts and slightly lower in new-crop contracts, Chicago and Kansas City wheat are mixed to mostly firmer and Minneapolis wheat is narrowly mixed. The U.S. dollar index is under pressure this morning.

USDA CONTINUING TO FILL IN 2013 PROGRAM DETAILS... USDA Tuesday announced signup will start Feb. 19 for the 2013 Direct and Countercyclical Program (DCP) and Average Crop Revenue Election (ACRE), with signup ending June 3 for ACRE and Aug. 2 for DCP. USDA has published projected 2013 ACRE guarantee prices and has notified state and county FSA offices that all rules and requirements that were effective for 2012 farm programs relative to eligibility to receive farm program payments and benefits are in effect for 2013 as well, including the $1 million AGI limit for direct payments. USDA also announced all dairy producers' Milk Income Loss Contract Program (MILC) contracts are automatically extended to Sept. 30, 2013. Eligible producers therefore do not need to re-enroll in MILC. Specific details regarding certain modifications to MILC will be released soon.

CROP INSURANCE INDEMNITIES REACH $12.35 BILLION... Payouts for 2012 crops under the federal crop insurance program reached $12.347 billion as of Jan. 21, with nearly 64% of the indemnities for corn -- $7.848 billion. Soybeans are the only other crop to have seen more than $1 billion in payouts for the 2012 crop year at $1.618 billion with cotton nearing that mark with indemnities of $917 million. The program loss ratio has now moved to 1.12 -- more indemnities have been made than the current total of $11.05 billion in premiums paid into the program.

USMEF SEES RECORD U.S. BEEF AND PORK EXPORTS FOR 2013… The U.S. Meat Export Federation says it expects pork and beef exports in 2013 to surpass last year's levels in both terms of volume and value. With one month missing from last year's total, it projects pork exports for 2012 to reach 2.27 MMT (5 billion lbs.) valued at $6.35 billion -- both new records. It projects 2012 beef exports to reach 1.13 MMT (2.49 bil. lbs.) valued at $5.5 billion -- a new record for value. For 2013, the group forecasts the volume of pork exports to increase 5% to 2.39 MMT (5.27 billion lbs.) and the value of exports to jump to $6.6 billion. Beef exports this year are forecast to be 1.24 MMT (2.73 billion lbs.) valued at $6.2 billion -- increases of more than 9% in volume and 13% in value over 2012. For more details, click here.

STRONG START FOR BOXED BEEF MARKET... Boxed beef prices were 75 cents (Choice) to $1.29 (Select) higher while packers moved a strong 394 loads of product yesterday. The surge in beef movement at higher prices suggests the product market may have posted a short-term low. But given negative cutting margins, packers will need further proof before they are willing to raise cash cattle bids.

PORK PRODUCT MARKET ALSO STRONG... The pork cutout value was $1.23 higher and packers moved a strong 123.16 loads of product Tuesday. While that improves packer cutting margins, they remain in the red. As a result, cash hog bids are expected to remain steady at most Midwest locations today.

OVERNIGHT DEMAND NEWS... South Korea purchased 55,000 MT of feed wheat (likely Indian). Japan bought 17,800 MT of feed wheat but passed on offers for barley. Japan tendered for 120,000 MT of feed wheat and 200,000 MT of feed barley.


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