BERNANKE COMMENTS, CHINESE DATA TRIGGERS PULLBACK IN GRAINS OVENIGHT... Grain and soy complex futures are being pressured by comments from Fed Chairman Ben Bernanke on Wednesday regarding the timing of tapering of its quantitative easing and weak economic data out of China overnight. As of 6:30 a.m. CT, corn futures are trading 5 to 8 cents lower, soybeans are mostly 10 to 13 cents lower, Chicago wheat is 9 to 14 cents lower, Kansas City wheat is 8 to 10 cents lower and Minneapolis wheat is 3 to 5 cents lower. The U.S. dollar index is sharply higher this morning.
AFTER LATE WEDNESDAY ACTION, HOUSE COULD FINISH FARM BILL TODAY... House Ag Chairman Frank Lucas (R-Okla.) said the House would finish work on its farm bill (HR 1947) this afternoon due to late-Wednesday approval of a package of 39 amendments by voice vote. The House debated numerous other amendments until midnight but delayed roll call votes until today. The House defeated, 188-234, Democratic member efforts to restore the proposed $20.5 billion in cuts for SNAP/food stamps. Rep. Bob Gibbs (R-Ohio) withdrew his amendment pushed by corn and soybean group lobbyists that would have slashed target prices in the underlying House farm bill. Gibbs withdrew his amendment after receiving an assurance from Lucas that he would work to make the program market-oriented. Rep. Tom Graves (R-Ga.) withdrew an amendment that would prohibit farmers who sell corn for ethanol from receiving federal commodity support on that part of their harvest. He argued that nearly 40% of corn production goes to ethanol and that farmers who provide corn for the fuel should not receive the same subsidies as those producing corn for food or livestock feed. Lucas said the farm bill "is not really the environment" for the amendment. Rep. Mike Thompson (D-Calif.) withdrew an amendment that would have linked conservation compliance with crop insurance. Thompson said the conservation compliance provision is already in the Senate bill and that a loss or close vote in the House could have weakened the case for keeping it in a conference committee. An effort to reform the food aid program was defeated in a close vote, 203-220. Continued debates and votes today will include efforts to delete dairy supply management language in the underlying bill, and an effort to alter the sugar program.
CHINA MANUFACTURING DATA WEAKENS... Preliminary data from HSBC signals China's manufacturing sector further contracted this month. The HSBC flash purchasing managers' index (PMI) dropped to a nine-month low of 48.3 from 49.2 in May. The new orders sub-index fell to a 10-month low, signaling demand (domestic and export) is weak.
FIRM RAISES EU WHEAT AND BARLEY FORECASTS, CUTS CORN PEG... Private firm Strategie Grains raised its European Union (including Croatia) wheat crop forecast to 131.5 MMT, up 600,000 MT from last month. The firm also raised it EU barley crop forecast by 800,000 MT to 56.1 MMT. But the EU corn crop projection was cut by 400,000 MT to 66 MMT.
JAPAN'S CORN USE CONTINUES TO DECLINE... Japan's use of corn in feed rations declined to 42% in April from 42.2% in March and 43.9% year-ago, according to ag ministry data, as feedmakers continue to seek cheaper alternatives. U.S. corn accounted for 40.8% of Japan's corn purchases in April, down from 83.7% last year.
WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended June 13, traders expect: corn sales between 200,000 and 450,000 MT; wheat sales between 300,000 and 650,000 MT; soybean sales between 350,000 and 600,000 MT; soymeal sales between 100,000 and 200,000 MT; and soyoil sales between 5,000 and 15,000 MT.
USTR REPORT: RUSSIAN POLICY ON RACTOPAMINE IS MORE STRINGENT THAN GUIDELINES OF CODEX... Russia has fallen short of its compliance obligations as a new member of the World Trade Organization (WTO) in several areas, including sanitary and phytosanitary measures, the Office of the U.S. Trade Representative (USTR) said in report released Wednesday. The report noted several areas where the USTR has challenged what it considers failures by Russia to live up to WTO standards. Representatives have met with Russian officials to press Moscow to align its sanitary and phytosanitary measures with international standards. For example, the report said, Russia has a near zero tolerance policy for tetracycline residues and a zero tolerance policy for ractopamine, both of which are more stringent than guidelines of the Codex Alimentarius (CODEX). The U.S. has also pressed Russia to include meat and poultry facilities certified by USDA's Food Safety and Inspection Service in the list of establishments approved to export to Russia, in accordance with bilateral agreements.
LATE-WEEK CASH CATTLE TRADE APPEARS LIKELY... Packers and feedlots are still far apart on bids and asking prices in the Plains. With neither side looking too anxious to budge on negotiations, cash trade is likely to wait until tomorrow, with active trade potentially on hold until after USDA's Cattle on Feed Report Friday afternoon.
PORK MARKET CONTINUES TO STRENGTHEN... The pork cutout value was another 92 cents higher Wednesday and movement improved to 407.6 loads. Strength in the product market should keep lean hog futures supported, but given that summer-month lean hog futures have rallied more than $10 from the March low, a seasonal top could come any time.
OVERNIGHT DEMAND NEWS... Taiwan purchased 85,500 MT of U.S. wheat with guarantees it's GMO-free -- the country's first known purchase of U.S. wheat since the GMO wheat discovery in Oregon. Japan purchased 152,321 MT of wheat in its weekly tender, including 64,993 MT of U.S. supplies, though this was the fourth straight week of no purchases of U.S. western white wheat. Japan received no bids in its tender to purchase 120,000 MT of feed wheat and 200,000 MT of feed barley. Iraq bought 80,000 MT of Thai rice. South Korea tendered for 55,000 MT of optional origin soybean meal.