First Thing Today (VIP) -- January 7, 2014

January 7, 2014 12:24 AM

Good morning!

Mildly weaker tone overnight... As of 6:30 a.m. CT, corn futures are trading fractionally to 1 cent lower, soybeans are 4 to 7 cents lower and wheat futures are narrowly mixed with most contracts fractionally to 3 cents lower. The U.S. dollar index is anchored near unchanged after light, two-sided trade overnight.

Farm bill update... Farm bill conference negotiators are expected to hold at least one public meeting either this week or next. Lingering issues are details regarding food stamps, mandatory country-of-origin labeling for meat and a provision that would bar states from setting animal welfare and production standards for out-of-state agricultural goods sold to their residents.

Senate approves Yellen to head Fed... The U.S. Senate approved the nomination of current Federal Reserve Vice Chair Janet Yellen to take over the top spot of the U.S. central bank Feb. 1. The first woman to lead the Fed, Yellen arrives at the post with years of central bank experience and helped craft the Fed's current communication policy, a policy that current Fed Chairman Ben Bernanke has referred to as another monetary policy tool. Her confirmation via a 56-26 vote was one of the first high-level nominations to be approved under Senate rules that were shifted to require only a simple majority vote for most nominations. That could have allowed more lawmakers to voice their displeasure at her nomination than might have been the case if the 60-vote requirement was still in effect. Still, Yellen fell short of having the most "no" votes for a Fed chair -- that still belongs to Bernanke when he was approved for his current term (expires Jan. 31) with 30 senators voting no.

Obama budget proposals could be late, again... As was the case last year, President Barack Obama’s budget for Fiscal Year 2015, which begins Oct. 1, is likely to be late this year. The White House Office of Management and Budget (OMB) is reportedly at least a month behind its own schedule for developing the comprehensive Fiscal 2015 tax and spending plan, which by statute is supposed to be submitted to Congress on the first Monday in February. There is no penalty for a late submission, but appropriators cannot hold budget hearings until they have a chance to review the administration’s proposals. Last year, the president’s budget was released in early April -- two months late -- a delay administration officials blamed on negotiating an agreement on tax cuts that were expiring at the end of 2012, as well as a sequester that began in 2013. Agriculture policy observers will be looking to see if Obama's coming budget again calls for billions of dollars in savings via proposed changes to the crop insurance program.

Irrigation survey underway... Farmers, ranchers and horticulture producers across the United States will begin receiving the Farm and Ranch Irrigation survey today in the mail asking them to provide information about their water use and irrigation practices, with responses due by February 10. The effort is aimed at gauging farmers’ and ranchers’ water resource stewardship and to identify opportunities for new technologies. USDA’s National Ag Statistics Service (NASS) traditionally conducts the irrigation survey following each Census of Agriculture. Only those producers who indicated in the 2012 Census of Agriculture that they irrigate are eligible for sampling. The results of the survey help in the development of improved technology, better equipment and more efficient water use practices.

Boxed beef prices surge... Choice boxed beef was $1.21 higher Monday, while Select surged $2.28. What traders are more closely watching, however, is boxed beef movement, which was light at only 148 loads to start the week. With Choice and Select boxes above $200, there is concern retailer demand will dry up.

Sluggish performance in pork product market... The pork cutout value was 28 cents lower Monday and packers moved only 265.07 loads of product on the day. Cash hog bids are expected to remain steady to firmer across the Midwest today as packers work to secure slaughter needs for the week, but if the product market continues to sputter, the cash strength will be short-lived as hog movement will pick up as temps warm and road conditions improve.

Overnight demand news... Bangladesh tendered to buy 50,000 MT of optional origin wheat.


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