MOSTLY FIRMER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents higher in all but the July contract that is fractionally higher, soybeans are mixed amid mild bull spread unwinding, Chicago wheat is mostly 3 to 5 cents higher, Kansas City wheat is mostly 3 to 4 cents higher and Minneapolis wheat is steady to fractionally higher. The U.S. dollar index is modestly weaker this morning.
SENATE FARM BILL DEBATE CONTINUES, WITH A LIKELY POST-MEMORIAL DAY CONCLUSION... It was slow going for the farm bill during Tuesday's debate. Attempts to increase and decrease the proposed $4.1 billion in cuts to food stamp funding were soundly defeated. A host of amendments await debate and possible votes, with key sources signaling the final vote on the bill will likely take place after lawmakers return from their Memorial Day recess. Most expect the Senate farm bill to look similar to the measure passed May 14 by the Agriculture Committee. The Senate on Tuesday voted 87-8 to accept an amendment introduced by Sen. Maria Cantwell (D-Wash.) that would allow Indian tribes to participate in soil and water conservation programs. The Senate also approved on a voice vote Sen. Jeff Sessions' (R-Ala.) amendment, which aims to clarify the eligibility criteria for those who qualify for agriculture irrigation assistance. Last year’s Senate farm bill passed on a bipartisan 64-35 vote, but the House failed to take up their own farm bill. As of May 21, at least 139 amendments were filed. Some deal with EPA and the RFS mandate, but those could be ruled not germane to the bill.
FOCUS REMAINS ON QE AS BERNANKE TESTIFIES... While the U.S. economy is the focus of testimony by Fed Chairman Ben Bernanke today before the congressional Joint Economic Committee, the market focus will be squarely on any comments he makes on the future of the Fed's quantitative easing (QE)/asset purchase program. Fed bank presidents have been commenting on it the past week or more, with a mix of views on whether the asset purchases should be tempered soon. Bernanke's views will set the market tone today, especially after New York Fed's William Dudley and St. Louis Fed's James Bullard Tuesday both indicated support for the current efforts, with Bullard urging Europe to echo the U.S.-style stimulus. Dudley signaled the Fed's last official position -- that the buys could go up or down. Also on tap are minutes from the April 30-May 1 FOMC session, but those could be overshadowed by Bernanke.
CROP INSURANCE INDEMNITIES NEARING $17.3 BILLION FOR 2012 CROPS... U.S. crop insurance indemnities for 2012 crops increased slightly to $17.272 billion for the week ended May 20, continuing to increase the record payout under the program, according to Risk Management Agency data. Corn payouts remain the biggest contributor to the record indemnities, reaching $11.757 billion as of May 20, nearly $1 billion above the prior record payout for the entire program which had been set with 2011 crops at $10.826 billion. Corn, cotton and soybeans remain the three major crops where indemnities have totaled more than $1 billion for 2012 crops. The focus on premium subsidies remains the most likely issue that some will seek to address in the new farm bill, with the Obama administration signaling relative to the Senate farm bill that they want to see additional cuts to the crop insurance program. But farm-state lawmakers have so far resisted reductions proposed for the program and the versions of the farm bill thus far have increased spending for the program compared to the 10-year baseline.
ARGENTINE WHEAT PLANTINGS TO EXPAND SHARPLY... Argentine farmers are expected to plant around 4.5 million hectares (11.1 million acres) to wheat this year, an increase of 40% from 2012-13, the country's ag secretary said on Tuesday. Higher wheat prices, a government tax rebate and favorable weather are seen as factors behind the big jump.
AG CANADA RAISES GRAIN AND OILSEED PRODUCTION FORECAST... Agriculture and Agri-Food Canada raised its 2013-14 Canadian grain and oilseed production forecast to 74.465 MMT from 73.710 MMT in May and 70.198 MMT in 2012-13. Its Canadian all wheat production forecast was raised to 29.4 MMT from 28.4 MMT last month, while the all wheat export forecast was unchanged at 18.8 MMT.
COLD STORAGE REPORT OUT THIS AFTERNOON... Traders expect end-of-April pork stocks in storage to total 658.5 million lbs., based on the average guess from a Dow Jones newswire survey. The average guess for beef stocks is 517.7 million pounds.
STEADY TO FIRMER CASH CATTLE EXPECTATIONS... Given the the string of record Choice boxed beef prices (another new high was set Tuesday), packer margins are sharply in the black. As a result, traders are anticipating steady to firmer cash cattle prices compared with last week's mostly $125 cash trade in the Plains. But the start of cash cattle negotiations has been slow, suggesting active cash trade may not be seen until late in the week.
PORK CUTOUT REBOUNDS... After a lower start to the week, the pork cutout value rebounded with a $1.14 gain yesterday. Though movement improved to 324.4 loads, that's notably lighter than recent weeks as Memorial Day buying is obviously complete and retailers are waiting to see how much pork they move over the holiday weekend before actively returning to the product market.
OVERNIGHT DEMAND NEWS... China has canceled up to 150,000 MT of South American soyoil purchases as ample supplies have driven down domestic prices, according to state-run China National Grain and Oils Information Center. Taiwan made no purchases in a tender to buy up to 60,000 MT of Brazilian or South African corn. Turkey sold 240,000 MT of milling wheat. Jordan tendered to buy 150,000 MT of optional origin wheat after making no purchases on a similar tender Tuesday.