First Thing Today (VIP) -- May 21, 2013

May 21, 2013 01:19 AM


PRICE PRESSURE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 6 to 13 cents lower with old-crop leading losses, soybeans are 3 to 7 cents lower in all but the July contract which is trading just above unchanged, Chicago and Kansas City wheat are around a dime lower and Minneapolis wheat is 6 to 8 cents lower. The U.S. dollar index is sharply higher this morning, contributing to the negative tone in grains.

SENATE FARM BILL DEBATE CONTINUES; WHITE HOUSE SUPPORTS BILL BUT WANTS MORE CROP INSURANCE CUTS... The Senate on Monday began its multi-day debate on the new farm bill. A list of amendments is being generated, with 100 or more expected to be offered for possible debate and/or votes. Topics include crop insurance, food stamps and sugar policy. Meanwhile, the White House issued its statement of administration policy about the bill and said that while it supported the Senate farm bill , it wanted to see deeper cuts in crop insurance and commodity subsidies, and less cuts for food stamps. USDA Secretary Tom Vilsack repeated his concerns about the House farm bill. In a separate statement, Vilsack said he was "deeply concerned" about parts of the House farm bill "including significant cuts that would deny struggling families and their children access to food assistance."

ROSARIO DOCKWORKERS STRIKE... Port workers at Argentina's main grain export hub of Rosario went on strike over wages on Monday. Negotiations to end the strike took place late Monday, though there's no update on the situation yet this morning. Soy complex traders are closely watching the situation as any major disruptions could push more demand here and U.S. old-crop supplies are tight, though these strikes are typically short-lived.

HRW CCI DROPS, SRW IMPROVES... When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the HRW crop dropped 5 points to 247. Deterioration was noted throughout the Plains. Meanwhile, the SRW crop improved 5 points to 378.

USMEF SIGNALS PORK, BEEF EXPORTERS READYING PLAN ON RACTOPAMINE FOR RUSSIA… U.S. pork and beef exporters are putting final touches on a plan that USDA will propose to Russia as a framework for certification of U.S. meat being free of the feed compound ractopamine, according to U.S. Meat Export Federation (USMEF) official John Brook. He says USDA’s Food Safety and Inspection Service was attempting to set up a meeting with Russian officials to present the plan in an effort to lift Russia’s ban on imports of U.S. pork and beef due to a lack of certification the supplies are ractopamine-free. We alerted recently that this effort was underway and this is additional confirmation that the matter will be dealt with.

CHOICE BOXED BEEF CONTINUES TO FIRM... Choice boxed beef prices were 53 cents higher Monday, extending to a fresh all-time high for the sixth consecutive day. Given the surge in boxed beef prices, packer margins are deep in the black. As a result, traders are expecting steady to firmer cash cattle prices compared with last week's mostly $125 trade in the Plains. Still, traders are comfortable with futures at a big discount to the cash market.

CASH HOGS CALLED STEADY/WEAKER... Demand for cash hogs is expected to ease as most plants are thought to be well booked on slaughter supplies given upcoming downtime around the Memorial Day holiday. Instead of actively competing for a tightening supply of market-ready hogs, packers are likely to work on improving margins.

OVERNIGHT DEMAND NEWS... Israel tendered to buy up to 80,000 MT of corn, 60,000 MT of feed wheat and 20,000 MT of feed barley -- all optional origin. Jordan tendered to buy 150,000 MT of optional origin wheat and 100,000 MT of optional origin feed barley. India canceled a tender to export 100,000 MT of wheat. Japan is seeking 122,222 MT of wheat in its weekly tender.


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