First Thing Today (VIP) -- June 19, 2013

June 19, 2013 01:33 AM
 

GOOD MORNING!

CHOPPY TRADE OVERNIGHT... As of 6:30 a.m. CT, corn futures are narrowly mixed with a slight downside bias, soybeans are 1 to 2 cents higher, Chicago and Kansas City wheat are around 1 cent lower and Minneapolis wheat is 1 to 2 cents higher. The U.S. dollar index is holding near unchanged this morning.

FOCUS ON THE FED, BERNANKE... The Fed will conclude its two-day Federal Open Market Committee meeting around 1 p.m. CT with a statement on the economy and monetary policy, including longer-term economic projections. But most of the attention will be on Chairman Ben Bernanke's press conference, which starts at 1:30 p.m. CT. Investors are hoping to get a better indication of when the Fed will begin to taper its economic stimulus.

LUCAS SEES VOTES FOR FARM BILL, BUT WITH A CAVEAT... House Ag Committee Chairman Frank Lucas (R-Okla.) says he sees the votes to pass the farm bill, but warned that could be jeopardized if there are any "poison-pill" amendments that come up in the process. While Lucas did not specify what potential amendments might thwart farm bill passage, sources indicate that the amendment by Rep. Bob Gibbs (R-Ohio) that would cut target prices in the bill could be one of those that could dash hopes for the bill. The House Rules Committee late Tuesday announced that 103 of the 227 filed amendments to the House farm bill were in order -- 50 from Republican, 35 Democratic and 18 bipartisan. But the number and late-breaking floor developments could move some of the debate and final vote until next week, sources say. The previous schedule had a final vote coming late tomorrow afternoon. The panel rejected a proposal to allow an open rule for amendments and defeated, 3-7, a proposal to allow a vote on an amendment that would set national cage standards for laying hens. Most of the allowed amendments will be debated for up to 10 minutes, with a handful to be debated 20 minutes.

GOV’T PANEL INVESTIGATING SMITHFIELD/SHUANGHUI DEAL: SEN. STABENOW… The the Committee on Foreign Investment in the United States (CFIUS) is investigating the $4.7 billion acquisition of Smithfield Foods by Shuanghui International Holdings Ltd., according to Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.). That panel is chaired by Treasury Secretary Jacob Lew and includes head of eight other agencies and departments with a focus on potential national-security impacts foreign investment in U.S. firms. Stabenow said she will request USDA and FDA be included, citing food safety and food security issues. Stabenow has raised questions on the deal, concerned China may try to ship pork here. Reviews by CFIUS have taken up to 75 days in the past.

CHINA JUNE SOY IMPORTS TO RISE SHARPLY... China National Grain and Oils Information Center (CNGOIC) forecasts Chinese soybean imports to rise to 6.9 MMT this month after imports of 5.1 MMT in May. The state-run think-tank forecasts July soy imports of 6 MMT. Meanwhile, CNGOIC says port stocks of soybeans currently total around 4 MMT, up slightly since the end of May.

INDIA TO CONSIDER MORE WHEAT SALES... India will consider more wheat exports and domestic sales from government reserves at a ministerial meeting on Friday, according to Food Minister K.V. Thomas. He told Reuters the ministerial cabinet will consider allowing another 2 MMT of wheat exports by state-run firms as nearly all of the 4.5 MMT of approved wheat exports have been shipped. Another 5 MMT of government wheat supplies have been offered to private firms for export, but there have been no deals as prices are considered too high. The panel will also consider 10 MMT of wheat sales domestically -- 8.5 MMT to bulk buyers and 1.5 MMT to states for distribution to the poor.

GASC WON'T CHANGE WHEAT TENDER SPECS... An official with the General Authority for Supply Commodities (GASC), Egypt's state wheat buyer, told Reuters there will be no changes to terms of its wheat import tenders. There has been speculation GASC would change currency or shipment terms amid the financial and political crisis in the country.

NEGATIVE ATTITUDES PERSIST IN CATTLE... Summer-month live cattle futures continue to trade at a discount to the cash market (though much of that discount has been erased) and are holding just above their contract lows. While the supply side of the cattle market remains bullish, traders want to see signs of a low in the boxed beef and cash cattle markets before they are willing to pump money into the long side of the market.

PORK CUTOUT SURGES... The pork cutout value surged $1.90 Tuesday as all cuts except ribs posts strong gains. Just as importantly, movement improved to 345.5 total loads, signaling retailers are more actively buying pork even as prices rise. With the pork market strengthening, packer cutting margins are improving. Combined with tight market-ready hog supplies, that should keep cash hog bids steady at most Midwest locations.

OVERNIGHT DEMAND NEWS... South Korea purchased 60,000 MT of South American soymeal.

 

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