VARIED PRICE TONE IN GRAINS... As of 6:30 a.m. CT, corn futures are trading mostly 1 to 3 cents higher, soybean are mostly 1 to 3 cents lower, Chicago and Kansas City wheat are 1 to 2 cents higher and Minneapolis wheat is narrowly mixed. The U.S. dollar index is modestly firmer this morning.
EFFORT UNDERWAY TO BLOCK MEAT INSPECTOR FURLOUGHS... A plan to block furloughs of meat inspectors by designating them essential workers to remain on the job despite the budget sequester will be an amendment offered to the FY 2013 Senate continuing resolution (CR) by Sen. Roy Blunt (R-Mo.), the top Republican on the Senate Ag Appropriations panel. Blunt said his amendment would draw on the 1995-96 showdown between President Bill Clinton, a Democrat, and a GOP-controlled House and Senate that led to two partial government shutdowns. All non-essential personnel were sent home and all non-essential government services stopped when continuing resolutions expired without an agreement between Clinton and Congress. "Essentially, what it does is go back to the standard that the government would have used in 1995 where there was a specific criteria where essential employees were not subject to furloughs or the government shutdown," Blunt says. Other senators want to know how the inspectors would be paid if they continued working.
VOLATILITY OF RINS VERY HIGH... After reaching a record of $1-plus on Monday, the price of Renewable Identification Numbers (RINs) plunged into the mid-60-cent range Tuesday before rebounding to the low 90s late Tuesday. The oil industry blames "unintended consequences" of the government ethanol mandate for the surge in RIN prices, while the ethanol industry says it's oil companies that are driving prices higher. While the battle over who's to blame continues, RIN prices will remain historically high -- and volatile.
CANADA POISED TO INCREASE WHEAT PRODUCTION, EXPORTS... Canadian wheat production and exports will rise longer-term following the end of the country's grain marketing monopoly as it will create higher profitability for producers, according to Alanna Koch, Deputy Minister for Agriculture in Saskatchewan. Koch says Canadian officials are looking to increase exports in the Southeast Asian market.
UKRAINE GRAIN UPDATE... Ukraine is forecast to export 22 MMT of grain in 2012-13 (July-June), down from 22.8 MMT in 2011-12, according to the head of the traders' union UZA. Meanwhile Ukraine's grain production is expect to rebound to 55 MMT in 2013-14 says the head of the country's leading exporter.
CHINA MAY ACT TO SUPPORT HOG PRICES... Chinese hog prices have fallen below breakeven as measured by the hog-to-corn ratio, which dropped to 5.95 (6 is breakeven), due to oversupply. As a result, China's National Development and Reform Commission says it may take measures to prevent hog prices from falling further, including stockpiling pork for state reserves and advising producers to trim production. But China must also be cognizant of pork prices as inflation is rising amid higher food prices.
RECORD SELECT BOXED BEEF PRICE... Select boxed beef prices reached a record of $196.73 yesterday morning and finished at $195.70, a dime above Monday's record close. With the record Select price, the spread between Choice and Select boxes narrowed to just $1.58. While retailers have been buying Select cuts, the extremely tight price spread may cause them to switch to more Choice beef purchases soon.
PORK CUTOUT RETREATS... After a brief uptick Monday, the pork cutout value was 49 cents lower yesterday. With the pork product market struggling to put in a low and pork plants bought ahead on slaughter needs, most packers are focused on trying to improve margins. Cash hog bids will remain steady to weaker across the Midwest.
OVERNIGHT DEMAND NEWS... Iran is said to be in talks to buy 110,000 MT of U.S. milling wheat. India tendered to export 100,000 MT of wheat.