First Thing Today (VIP) -- January 23, 2014

January 23, 2014 12:23 AM
 

Good morning!

Grain/soy futures firmer this morning... As of 6:30 a.m. CT, corn futures are 1 to 2 cents higher, soybeans are mostly 3 to 6 cents higher and wheat futures are mostly 6 to 8 cents higher. The U.S. dollar index is under sharp pressure this morning.

Farm bill timeline still holding for late-January/early February approval… Farm bill principals are still hopeful of getting details ironed out on a farm bill package to allow for release of the language soon, perhaps over the weekend. Such a timeline would allow for lawmakers to consider the conference report and bring it to a vote in the House prior to next Wednesday when Republicans depart for a policy retreat. Country of Origin Labeling (COOL) remains an uncertain component, but indications are specifics on COOL may not be brought up for a conference committee vote so that conference members are forced into votes on specific COOL plans. A modified North American label (without a U.S. origin a label) is one possibility along with a potential prevention on USDA enforcing its COOL rule until the WTO rules on the plan USDA finalized last May.

Resumption of Census report timeline still unknown… While the massive FY 2014 appropriations measure signed into law earlier this month will see USDA's National Ag Statistics Service (NASS) restart some of the reports the U.S. Census Bureau discontinued in 2011, timing of that resumption is still unclear. Several steps remain in the process, including NASS seeking clearance from the Office of Management and Budget (OMB) for the questions/surveys to be used to gather the data. The monthly reports to be resumed include the fats and oils monthly crush data, fats and oils stocks, cotton stocks and processing and a quarterly report on wheat milling data. The data resumption will also include NASS surveying some ethanol plans for corn oil extraction rates but not ethanol output.

U.S. to reach debt limit in late February… The U.S. will now reach the debt limit in late February as opposed to initial guidance from the U.S. Treasury that it would be late February to early March, according to a letter dispatched to the House and Senate by Treasury Secretary Jacob Lew. A large cash payment for tax refunds in February is the culprit in shifting the debt limit expectation, as Lew said the extraordinary measures the government can take to avert default will be exhausted in late February. This now sets the stage for another potential showdown in Washington on the matter, with Democrats and the White House insisting on a "clean" debt limit increase while Republicans want to attach other matters to any debt limit hike.

China stresses grain security this year... China will make all efforts to achieve grain production above 550 MMT this year to ensure grain security and guarantee supplies of major ag commodities, according to the 2014 agriculture and rural economic work released today. To achieve its grain production goal, China will strengthen supervision on the quality of ag products, increase ag technology and enhance utilization of resources for agriculture.

China Cotton Association: subsidies needed for all cotton farmers... As we earlier reported, China will scrap its cotton stockpiling program in favor of direct farmer subsidies this year. But those subsidies will only be tested in the top cotton production province of Xinjiang, which produced roughly 55% of the country's cotton crop last year. Gao Fang, secretary general of the China Cotton Association (CCA) told Reuters, "We have already estimated that acreage (this year) will drop a lot. So now if you release a policy, and it doesn't take into account the inland provinces, the drop in acreage will be very big, Just because they are trialling subsidies in Xinjiang, doesn't mean the government should give up on the inland provinces."

China's manufacturing sector shows signs of contraction... China's manufacturing sector contracted for the first time in six months, according to the HSBC flash purchasing managers index (PMI), which dropped to 49.6 from a final reading of 50.6 in December. New export orders are down this month, but HSBC says slowed domestic demand is the primary reason for the contracting factory output.

Weekly export sales delayed... Due to Monday's government holiday, export sales data for the week ended Jan. 16 is delayed until Friday morning.

Record cash cattle prices... Amid surging boxed beef prices and strong packer margins, cash cattle trade was active in the Plains Wednesday at prices $5 above those seen last week. Texas and Kansas feedlots got $147 for cash supplies, while Nebraska cash cattle traded at $150. Despite strong gains, cattle futures are still playing catchup to the cash market.

Hog movement slowed by weather... Extremely cold temps, high winds and snow-covered roads are disrupting hog movement across the Midwest. Some plants have reportedly scaled back kill schedules and are pushing some hogs planned for slaughter this week into next week. As a result, demand for cash hogs is limited.

Overnight demand news... Taiwan purchased 73,400 MT of U.S. wheat but passed on a tender to buy 60,000 MT of U.S. corn. Japan bought 99,052 MT of U.S. wheat in its weekly tender. Saudi Arabia tendered to buy 660,000 MT of optional origin milling wheat. Ethiopia tendered to buy 70,000 MT of optional origin milling wheat.

 

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close