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

July 23, 2013 01:07 AM
 

GOOD MORNING!

CORN AND WHEAT LOWER, BEANS MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 6 to 7 cents lower, soybeans are narrowly mixed, Chicago wheat is 4 to 5 cents lower, Kansas City wheat is 3 to 4 cents lower and Minneapolis wheat is mostly 1 to 2 cents lower. The U.S. dollar index is modestly weaker after two-sided trade overnight.

EPA SENDS FINAL 2013 RFS PLAN TO OMB; 2014 PROPOSAL AWAITS ACTION... The Environmental Protection Agency (EPA) has sent its final plan for the 2013 Renewable Fuels Standard (RFS) to the Office of Management and Budget (OMB) for review, a move which could signal the plan is close to being finalized. EPA in January proposed an RFS level for cellulosic biofuel at 14 million gallons and to set the 2013 volume requirements for advanced biofuel and total renewable fuel at the levels required by the statute 2.75 and 16.55 billion gallons, respectively. EPA had previously set the 2013 volume requirement for biomass-based diesel in a separate action, finalizing a volume of 1.28 billion gallons. The corn-based ethanol component is at 13.8 billion gallons for 2013 and would rise to 14.4 billion gallons in 2014, pending any EPA changes. The 2014 proposal is highly anticipated given that EPA officials have testified that meeting the volume requirements spelled out in law could be a challenge in 2014 and will depend in part on the level of carryover renewable identification numbers (RINs) that are available from 2013 output.

FIRST OF TWO DAYS OF HEARINGS ON RFS BEGINS TODAY; BIOFUEL GROUPS PUSH BACK IN CAMPAIGN... An Energy and Commerce subcommittee today begins two days of hearings on the RFS. Meanwhile, Fuels America, a coalition of biofuel organizations, launched a campaign Monday that includes print, television and online ads as well as ads on the D.C. Metro system. The advertisements revolve around the slogan "there is a choice," underscoring charges by the biofuel industry that oil firms want to dismantle the RFS to keep the market reserved for conventional petroleum. As for the RFS outlook, repeal looks extremely unlikely. The Obama administration also has voiced support for the mandate. But biofuel backer Rep. Ed Whitfield (R-Ky.), who chairs the Energy and Commerce Energy and Power subcommittee, has said changes could be in the offing. EPA has "more than enough flexibility," said Renewable Fuels Association CEO Bob Dinneen. "We don’t see any need for legislation." Some EPA flexibility, notably regarding cellulosic mandates and the 2014 corn-ethanol volume requirements could come via pending EPA announcements.

CORN, SOYBEAN CCI RATINGS DECLINE... When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the corn crop declined 5 points to 366 while the soybean crop slipped 1 point to 362. For corn, the biggest declines were in Illinois, Iowa, Nebraska and Kansas. For soybeans, the Nebraska crop declined the most. For a more detailed look at the Pro Farmer CCI ratings, click here.

HRS TOUR KICKS OFF THIS MORNING... The Wheat Quality Council's annual HRS wheat tour starts in Fargo, North Dakota, this morning. On Day 1 of the tour, scouts will sample fields in the southern half of North Dakota, southwestern Minnesota and northeast/north-central South Dakota. Day 1 results will be released this evening.

BOXED BEEF MARKET CONTINUES TO REEL... Boxed beef prices were 24 cents (Choice) to 97 cents (Select) lower Monday and packers moved only 126 loads of product at the lower prices. While the boxed beef market is struggling to put in a short-term low, there's some hope for firmer cash cattle prices this week as showlist numbers are down from week-ago, especially in Texas.

PORK DEMAND BETTER THAN EXPECTED... Monday afternoon's Cold Storage Report showed the largest-ever monthly decline in frozen pork stocks at 94 million pounds. Pork stocks as of June 30 came in well below expectations and under year-ago, suggesting demand is chewing through supplies much quicker than anticipated. Much of the better-than-expected demand was likely due to stronger domestic usage as retailers more actively featured pork given record boxed beef prices ahead of summer.

OVERNIGHT DEMAND NEWS... Taiwan tendered to buy 97,200 MT of U.S. milling wheat. Japan is seeking 107,371 MT of wheat in its weekly tender.

 

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