First Thing Today (VIP) -- June 13, 2013

June 13, 2013 01:19 AM


CORN AND WHEAT MIXED, BEANS WEAKER OVERNIGHT... As of 6:30 a.m. CT, corn futures are narrowly mixed, soybeans are 5 to 10 cents lower, Chicago and Kansas City wheat are mixed and Minneapolis wheat is 2 to 3 cents higher. The U.S. dollar index is weaker this morning.

A MORE UPBEAT OUTLOOK FOR HOUSE FARM BILL SURFACES... Besides House Speaker John Boehner (R-Ohio) saying Wednesday he will support the House farm bill, House Ag Chairman Frank Lucas (R-Okla.) said "things are trending in our direction" and he expects the farm bill to come up on the House floor next week. Meanwhile, Rep. Collin Peterson (D-Minn.), ranking member on the House Ag panel, said he now thinks around 50 Democratic members could vote for the farm bill -- up from a figure of around 30 just days ago. That would mean fewer than 170 of the House's 234 Republicans would be needed to pass the bill. Also, USDA Secretary Tom Vilsack called for House action on the bill, even though he labeled as "unacceptable" the $20.5 billion cuts in food stamp funding contained in the House farm bill, a figure that could still go higher when the chamber debates the bill.

HOUSE APPROPRIATORS URGE USDA TO HOLD OFF ON COUNTRY-OF-ORIGIN (COOL) LABELING RULE IMPLEMENTATION... House Agriculture appropriators in a subcommittee report released Wednesday said they "strongly encourage" USDA to wait until the World Trade Organization (WTO) concludes all work on challenges by Mexico and Canada before implementing a newly issued rule on country-of-origin (COOL) labeling for meat. Canada is vigorously opposed to the final rule and has released a list of U.S. exports that they say could potentially face retaliatory tariffs. The WTO issue may not be resolved for 18 to 24 months. The full House Appropriations panel today will mark up the Ag spending bill.

CHINA STOCKPILES MORE CORN THAN ANTICIPATED... China stockpiled a greater-than-anticipated 30.8 MMT of domestic corn supplies for state-owned reserves in its purchase program that concluded at the end of May, according to China National Grain and Oils Information Center (CNGOIC). That has tightened domestic supplies and pushed prices higher, which could lead to more corn imports, though the state-run think-tank kept its 2013-14 Chinese corn import forecast at 5 MMT. USDA projects 2013-14 Chinese corn imports at 7 MMT. Meanwhile, CNGOIC lowered its 2013-14 Chinese wheat crop estimate to 120.63 MMT from 121.9 MMT previously due to damaging late-season rains.

GMO WHEAT UPDATE... USDA told Reuters Wednesday it has found no other instances of GMO wheat outside of the field in Oregon where the unapproved strain was discovered, but the investigation continues. USDA is still looking for answers as to how the GMO wheat plants got into the field so it can reassure trading partners the commercial supply is "clean."

CONSULTING FIRM RAISES RUSSIAN CROP, EXPORT FORECASTS... Private consulting firm SovEcon raised its Russian wheat crop forecast to 52 MMT from 50 MMT previously due to improved weather. The firm also upped its 2013-14 Russian wheat export forecast to a range of 14 MMT to 15 MMT from 10 MMT previously.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended June 6, traders expect: corn sales between 200,000 and 400,000 MT; wheat sales between 400,000 and 650,000 MT; soybean sales between 300,000 and 700,000 MT; soymeal sales between 125,000 and 300,000 MT; and soyoil sales between 10,000 and 20,000 MT.

CASH CATTLE NEGOTIATIONS REMAIN SLOW... Packer bids and feedlot asking prices remained far apart as of late Wednesday, suggesting active cash cattle trade isn't likely until late today at the earliest. Traders have varied attitudes toward this week's cash trade. Price action in cattle futures and the boxed beef market may be the deciding factor.

PORK PRODUCT MARKET CONTINUES TO STRENGTHEN... The pork cutout value was $1.27 higher Wednesday, the fifth consecutive day of gains. Despite rising pork prices, packer cutting margins remain well below breakeven as cash hog bids have firmed at a greater clip than the product market. Still, packers are expected to keep cash hog bids steady to firmer across the Midwest amid tight market-ready supplies.

OVERNIGHT DEMAND NEWS... Taiwan purchased 60,000 MT of Brazilian soybeans and tendered to buy 85,500 MT of U.S. wheat. Japan bought 157,439 MT of wheat in its weekly tender, including 94,062 MT of U.S. supplies. South Korea purchased 60,000 MT of South American corn and 50,000 MT of optional origin corn. Jordan tendered to buy 100,000 MT of optional origin milling wheat and 100,000 MT of optional origin feed barley.


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