MIXED TO MOSTLY LOWER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading fractionally to 4 cents lower, soybeans are mostly 1 to 4 cents lower, Chicago wheat is 3 to 5 cents lower, Kansas City wheat is mostly around 3 cents lower and Minneapolis wheat is narrowly mixed. The U.S. dollar index is under pressure this morning.
FALLOUT FROM GMO WHEAT DISCOVERY... Japan canceled an offer to buy 24,926 MT of U.S. western white wheat in its weekly tender after USDA announced Wednesday unapproved GMO wheat was found in Oregon. "We will refrain from buying western white and feed wheat effective today," Toru Hisadome, a Japanese farm ministry official in charge of wheat trading, told Reuters. Hisadome says Japan will stop buying U.S. western white wheat until a test kit is developed to identify GMO presence in shipments. Meanwhile, the European Union (EU) Commission has asked the U.S. how to test for unapproved GMO wheat and says it would block shipments if they contained the unapproved strain. An EU spokesman says there is no talk at this stage of broader measures and that any ban would have to be set for the EU as a whole, not individual states. South Korea, China and the Philippines say they are monitoring the situation closely.
CHINA PROPOSED ACQUISITION OF SMITHFIELD FOODS LIKELY TO GET GREEN LIGHT... Several lawmakers have focused their sights on potential food safety concerns of the proposed acquisition. Shuanghui International's and China's history of food safety problems is also raising concerns with some consumer advocates. "We know that Chinese food products have been a threat to public health and that Shuanghui was found to have produced and sold tainted pork, said Rep. Rosa DeLauro (D-Conn.). "This merger may only make it more difficult to protect the food supply." The U.S. Committee on Foreign Investment, a government panel that reviews foreign takeovers of U.S. firms, will look into the Smithfield deal. The topic could be brought up next week when President Obama meets with Chinese President Xi Jinping. Smithfield CEO Larry Pope said Shuanghui has promised not to close or relocate any Smithfield operations. Talking to analysts, Pope denied that the deal was intended to lead to imports of Chinese pork, but instead would facilitate U.S. exports. Sen. Chuck Grassley (R-Iowa) said the proposed acquisition highlighted the degree of consolidation that there now is in the livestock industry and underscored the need for country-of-origin labeling. Our sources believe the proposed acquisition will be given the okay.
BOXED BEEF MARKET STRENGTHENS... Choice boxed beef prices rebounded from two days of price declines with a 99-cent gain Wednesday, but more importantly, movement improved to 231 loads. The pickup in boxed beef movement coming out of Memorial Day is an encouraging sign for a market that's struggled amid demand concerns.
PORK PRODUCT MARKET POSTS STRONG RECOVERY... After a sluggish start Tuesday, the pork product market bounced back with a strong showing yesterday as the cutout value rose 76 cents and packers moved a strong 547.8 loads of product. That should keep cash hog bids steady at most Midwest locations as plants still need supplies for late-week kills and market-ready supplies are tightening.
WEEKLY EXPORT SALES DELAYED... Due to Monday's holiday, USDA's export sales data for the week ended May 23 is delayed until Friday morning.
OVERNIGHT DEMAND NEWS... South Korea bought 68,000 MT of optional origin (likely U.S. or South American) corn. Japan purchased 117,035 MT of wheat in its weekly tender, including 53,080 MT of U.S. supplies. Lebanon bought 25,000 MT of German wheat. Jordan tendered to purchase 150,000 MT of optional origin milling wheat and 100,000 MT of optional origin barley. India tendered to export 100,000 MT of wheat. Bangladesh tenders to buy 50,000 MT of optional origin wheat.