SOYBEANS LEAD GAINS OVERNIGHT... As of 6:30 a.m. CT, soybean futures are trading mostly 22 to 26 cents higher, corn is mostly 4 to 5 cents higher, Chicago wheat is around 8 cents higher, Kansas City wheat is 3 to 6 cents higher and Minneapolis wheat is 5 to 9 cents higher. The U.S. dollar index is under pressure this morning.
SENATE FARM BILL VOTES, IRS ISSUES, FY 2014 AG SPENDING AND OBAMA SUMMIT WITH CHINESE PRESIDENT HEADS WASHINGTON AGENDA... Lawmakers return today, with the Senate resuming debate and votes on the farm bill amid expectations of a final vote by week's end. Meanwhile, the House Ag Appropriations Subcommittee on Wednesday will markup its version of the FY 2014 ag spending bill. Several House committees will hold hearings on various IRS-related issues. And on Friday, President Obama begins a summit with Chinese President Xi Jinping. Meanwhile, with speculation continuing on how and when the Fed may phase out its economic stimulus, Friday's jobs report will be watched for any signs of greater-than-expected job growth and a lower unemployment rate, along with the number of hours worked and the average wage.
SOUTH KOREA: INITIAL TESTS SIGNAL U.S. WHEAT GMO-FREE... South Korea's Ministry of Food and Drugs says initial tests on shipments of U.S. wheat and flour found no evidence of GMO content. Final test results are expected Wednesday. While initial tests showed no GMO wheat present in shipments, South Korea plans to test all cargoes of U.S. wheat and flour coming into the country. Meanwhile, Monsanto has provided the European Union with a testing method for the unapproved strain of GMO wheat, but it will reportedly be at least two weeks before imports can be tested.
DRY AREAS OF UKRAINE TO RECEIVE RAINS... Rains are forecast for dry areas of eastern and southern Ukraine later this week, according to the deputy head of the country's state weather forecasting center. The rains are expected to boost corn and other spring-planted crops, but are too late to have much impact on maturing wheat and barley crops in the region.
MIXED SIGNALS FROM CHINA'S MANUFACTURING SECTOR... China's official purchasing managers' index (PMI) rose to 50.8 in May from 50.6 in April. The new orders sub-index upticked to 51.8 from 51.7 in April and the new export orders sub-index improved to 49.4 from 48.6. Meanwhile, China's final HSBC PMI for May fell to 49.2, the lowest reading since October 2012, from 50.4 in April on declining domestic and export demand.
STRONG BEEF MARGINS... While the boxed beef market is signaling a short-term top is likely in place, prices are still historically strong, keeping packer margins deep in the black. As a result, packers have incentive to push as many cattle through kill lines as possible. Given tight market-ready supplies, packers may raise cash cattle bids even if boxed beef prices weaken.
CASH HOGS CALLED STEADY/FIRMER... Packers are expected to open the week offering steady to firmer bids for cash hogs as plants are in need of supplies for this week's kills. Because of tightening market-ready supplies, packers remain willing to pay up for cash hogs despite negative cutting margins.
WEEKEND DEMAND NEWS... Saudi Arabia purchased 525,000 MT of optional origin (North American, South America, European Union or Australian) wheat.