CORN FIRMER, BEANS WEAKER AND WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are steady to 5 cents higher with the July contract leading gains, soybeans are mostly 6 to 8 cents lower and wheat futures are mixed with a modest upside bias. The U.S. dollar is firmer this morning.
OBAMA TAKES EXECUTIVE ORDER ROUTE TO ANNOUNCE CLIMATE CHANGE PLAN... Unable to get any major climate change legislation through Congress, especially the House, President Obama as widely expected on Tuesday announced a plan via executive order that relies in large part on increasing the country's use of renewable energy and energy efficiency. The plan calls for limits on carbon dioxide emissions from both new and existing power plants, in a direct shot at coal-fired plants, something opponents called a very negative move for the coal industry and its related jobs. Obama laid out a regulatory path that would require states to develop plans to implement standards for existing plants by June 2016, just months before the president leaves office. But the administration is likely to face legal obstacles and delays in promulgating the regulations. Obama unveiled initiatives aimed at doubling renewable energy generation in the U.S. by 2020. Obama also announced that, by 2020, the federal government, the country's largest energy consumer, will procure 20% of its electricity from renewable sources, an amount more than double the current goal of 7.5%. According to the plan, the Energy Department will make up to $8 billion in loan guarantee authority available for advanced fossil fuel energy projects, such as carbon capture and sequestration, with a final solicitation expected by the fall of 2013. During his remarks, Obama said the Keystone XL pipeline project should be approved if it does not "significantly exacerbate" greenhouse gas emissions, but the State Department has confirmed the pipeline would not have a significant impact on the rate of oil sands development or the volume of oil refined in the Gulf Coast.
WHITE HOUSE ISSUES VETO THREAT AGAINST HOUSE FY 2014 AG SPENDING BILL... A late-Tuesday statement from the White House threatened veto of the Fiscal Year 2014 House spending bill (HR 2410), a signal that still another fiscal cliff issue on appropriations and the debt ceiling looms in the fall. Part of the veto reason, according to a White House statement, is the House bill's failure to provide $120 million for the Commodity Futures Trading Commission (CFTC) to implement the Dodd-Frank financial reform law. Obama has threatened to veto each of the House bills that have come before the Rules panel this year, including the Veterans Affairs bill. The House is operating under a budget cap that is $91 billion below what Senate Democrats and Obama want for 2014. For the Agriculture bill, the House is providing $19.5 billion in discretionary funding while the Senate calls for $20.9 billion. The White House also criticized the House for failing to reform international food aid to allow the government to buy foreign food. It said cuts to aid in the bill could affect 12 million hungry people. The administration also said funding for meat inspections, the FDA, and the Women, Infants and Children nutrition programs were dangerously low.
HOUSE REPUBLICANS TO MEET TODAY WITH FARM BILL STRATEGY LIKELY ON THE AGENDA... The Republican leadership team met Tuesday evening after House Speaker John Boehner (R-Ohio) returned from a meeting with President Barack Obama at the White House. The next step for the House farm bill is not likely until after GOP leaders meet with their conference this morning, where they are expected to discuss the farm bill that last Thursday was defeated on a 195-234 vote. Sixty-two Republicans voted against the bill (HR 1947), while only 24 Democrats voted for it. Minority Whip Steny Hoyer (D-Md.) on Tuesday said that prior to the vote on final passage, neither Republicans nor Collin Peterson, ranking Democrat on the House Agriculture Committee, asked him how many Democrats might support the bill. Hoyer said Republican leaders have not reached out to Democrats about another attempt to move the five-year farm bill nor asked him whether removing a contentious workfare amendment on SNAP (food stamps) by Rep. Steve Southerland (R-Fla.) could attract more Democratic votes. The Southerland amendment was widely thought to be pushed by House Majority Leader Eric Cantor (R-Va.).
GRAIN UNION OFFICIAL: RUSSIA WON'T HIT GRAIN/WHEAT PRODUCTION FORECASTS... Russia won't produce the 95 MMT of grain, including 54 MMT of wheat, the country's ag ministry has forecast, according to the head of the Russian Grain Union. He cites hot weather in the south and cold temps in Siberia in May, along with a lack of harvesting equipment as reasons this year's harvest won't be as big as believed. The official, however, failed to provide his own crop forecasts.
MEXICO RESTRICTS U.S. PIG IMPORTS... Mexico will restrict pig imports from the U.S. due to an outbreak of Porcine Epidemic Diarrhea Virus (PEDV), according to the country's ag ministry. Mexico will review pig imports from the U.S. on a case by case basis and said all pigs imported from the U.S. prior to May 17 would be quarantined and closely observed. Mexico has not detected any cases of PEDV to date. Importantly, this action does not impact shipments of U.S. pork to Mexico.
BOXED BEEF MARKET STILL LOOKING FOR A SHORT-TERM LOW... Choice boxed beef prices dropped $1.68 and Select cuts were 66 cents lower Tuesday. While movement improved to 172 loads, traders want to see the price slide in Choice boxed beef come to an end before they are convinced a short-term low is in place.
PORK CUTOUT CONTINUES TO FIRM... The pork cutout value firmed another 79 cents Tuesday -- the 11th rise in the past 12 days -- and movement improved to 296.7 loads. While the cutout value continues to strengthen, traders are watching for signs retailers are starting to resist the high prices, as a seasonal top could come at any time.
OVERNIGHT DEMAND NEWS... South Korea bought a total of 120,000 MT of optional origin feed wheat in two separate tenders. Taiwan canceled a tender to purchase 120,000 MT of U.S. or South American soybeans. Japan tendered to buy 120,000 MT of feed wheat and 200,000 MT of feed barley.