First Thing Today (VIP) -- June 14, 2013

June 14, 2013 01:22 AM
 

GOOD MORNING!

CORN MIXED, BEANS FIRMER AND WHEAT LOWER OVERNIGHT... As of 6:30 a.m. CT, corn futures are narrowly mixed amid bull spreading, soybeans are 4 to 9 cents higher, Chicago wheat is 4 to 5 cents lower, Kansas City wheat is 3 to 5 cents lower and Minneapolis wheat is around 1 cent lower. The U.S. dollar index is firmer this morning.

LUCAS UPBEAT ABOUT HOUSE FARM BILL FATE... "I feel better now than at any time I’ve felt in a year" about convincing a majority of the House to vote for the bill, Lucas told the Oklahoma Farm Report, a radio program. But he added, "I don’t expect to go to the floor if we’re not there with the 218 votes." Lucas said he has already met with the Rules Committee and asked that it adopt a rule providing for "open discussion" on all issues that members want to bring up, but with only one or two amendments allowed per subject. Lucas earlier this week said that he believes the number of amendments that will be brought to the floor will be between 30 and 40. Under this scenario, the debate on the bill on the floor would begin next Wednesday or Thursday, Lucas said. Lucas said he is optimistic about getting the votes because members understand that if a new farm bill is not passed, the Supplemental Nutrition Assistance Program/food stamps, is permanently authorized and would continue while farm programs will expire and outdated laws from the 1930s and ’40s will take effect. "That’s not in the consumer’s best interest or rural America’s best interest," Lucas said. After hearing his explanation, members of his caucus "are truly warming up" to writing a new farm bill, he said. A "good, straightforward debate," he added, "can create a consensus." Lucas said he believes the farm bill "should follow production" and that proposals to limit crop-insurance aid for large producers are part of "cunning, crafty efforts" to allow USDA "to tell rural America how to live and how to farm."

USDA STILL WORKING ON GMO WHEAT TEST... USDA announced Thursday it is still developing an "appropriate and validated" test to detect GMO wheat. Many key trading partners are awaiting the rapid test kits before resuming shipments of U.S. western white wheat out of the PNW. Meanwhile, upon request from exporters, USDA is issuing a letter stating, "There are no transgenic wheat varieties for sale or in commercial production in the United States at this time." Meanwhile, three representatives from three of South Korea’s largest flour mills will meet with wheat researchers, tour grain elevators and export terminals and visit with farmers who are preparing to harvest their soft white, hard red spring and hard red winter wheat crops. The U.S. Wheat Associates collaborated with the Montana Wheat & Barley Committee and the Oregon Wheat Commission to organize this year’s tour.

NO DIRECT LINK BETWEEN RFS AND RISING FOOD PRICES: STUDY... A study funded by the ethanol industry found there is no direct link between the country’s renewable fuel policy and higher food prices. The report, released by ABF Economics, said the country’s Renewable Fuel Standard (RFS) is only one factor behind the increase in corn prices. Commodity market speculation, expanding global demand for food and agricultural commodities are among the other contributing factors. The "ABF Economics analysis provides definitive evidence that ethanol and the RFS are not driving food prices," said Bob Dinneen, president of the Renewable Fuels Association (RFA). "That canard has been nothing but a distraction propagated by those wanting to continue profiting from government subsidized grain and those seeking to keep us ever dependent on petroleum. This report should end the food vs. fuel debate for good." RFA commissioned the ABF Economics study.

LOSING CANADIAN AND MEXICAN MARKETS OVER COOL WOULD BE 'CATACLYSMIC' FOR U.S. PORK INDUSTRY... That is what National Pork Producers Council (NPPC) Vice President and Counsel for International Trade Nick Giordano said Thursday, adding that the industry was "very concerned" about possible trade retaliation from Mexico and Canada in a World Trade Organization (WTO) case on U.S. country of origin labeling (COOL) for meat. Giordano -- along with NPPC President Randy Spronk -- to reporters via a conference call from Brussels, Belgium, where they were involved in discussions on the proposed U.S.-European Union Transatlantic Trade and Investment Partnership (TTIP). Meanwhile, the House Appropriations Committee on Thursday included report language accompanying the FY 2014 Ag spending bill that would delay for two years the implementation of Country of Origin Labeling (COOL) rule requiring the labeling of meat and poultry. The COOL dispute is over a USDA final rule released May 23 to comply with an adverse WTO Appellate Body ruling. Canada and Mexico -- the complainants in the original WTO case -- have said that the new rule still fails to pass WTO muster and have threatened retaliation if the WTO agrees. Live cattle and hogs, their meat, and preserved meats are on a draft retaliation list issued by Canada. Giordano stressed that retaliation is not "imminent" because the new USDA rule would have to be reviewed by a WTO compliance panel -- a step Giordano speculated could take six to 12 months to run its course. In the meantime, the U.S. should not move forward with implementation of the revised rule until the WTO decides if the U.S. is in compliance, he added.

STILL WAITING ON CASH CATTLE TRADE... The cash cattle market remained quiet late Thursday afternoon as packers showed little interest in buying cattle and feedlots didn't appear willing to move animals at lower prices. Unless those stances change, cash cattle trade is not likely until late today -- and sales may not be active. Most traders are anticipating steady to lower cash prices compared with last week's mostly $122 trade in the Plains.

CASH HOGS CALLED MOSTLY STEADY... Packers may not be as aggressive with cash hog bids today as they have been recently. While market-ready supplies are tight, margins continue to slip. As margins fall deeper into the red, it becomes more likely plants will further cut back on kill hours, reducing their demand for cash hogs.

OVERNIGHT DEMAND NEWS... Iran purchased at least 200,000 MT of wheat -- likely Black Sea and Baltic Sea origin.

 

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