First Thing Today (VIP) -- May 3, 2013

May 3, 2013 01:42 AM


GRAINS MILDLY FIRMER... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are mostly 4 to 6 cents higher, Chicago wheat is mostly 5 to 6 cents higher, Kansas City wheat is mostly around 3 cents higher and Minneapolis wheat is fractionally to 4 cents higher. The U.S. dollar index is under pressure this morning.

INFORMA CROP REPORTS OUT THIS MORNING... Informa Economics will release its May crop report at 10:30 a.m. CT. The focus will be an updated 2013 wheat crop estimate.

SLIGHTLY BETTER JOBS REPORT ANTICIPATED... Economists expect non-farm payrolls increased by 145,000 in April, according to the average guess from a Reuters survey. The unemployment rate is expected to hold at 7.6%.

TIMELINE FOR HOUSE AG PANEL FARM BILL ACTION... The House Ag Committee will tentatively release text for the new farm bill next Wednesday, May 8. Panel members will have until Monday, May 13 to file amendments, with a tentative May 15 markup date. The approved amendments during last year's markup will be included in the chairman's mark. House floor action on the farm bill is still murky, but some House sources have signaled leadership wants the farm bill to be voted on by the July 4 recess.

A FEW CHANGES IN THE COMING HOUSE FARM BILL... The commodity title of the coming House farm bill will look very similar to the 2012 version that cleared the Ag panel. Target/reference price levels are expected to match those proposed last year. We've learned the the Supplemental Coverage Option (SCO) will cover losses ranging from the elected insurance coverage level to 65% of the SCO guarantee, down from 70% in the 2012 farm bill proposal. Some $4 billion in additional food stamp funding cuts will largely come from the Low Income Home Energy Assistance Program (LIHEAP). Importantly, we're told Ag panel members will be told to "vote their conscience" regarding the dairy policy reform changes that include supply management. That could mean potential changes ahead in that area. Good news is coming for the livestock sector, as we've learned the House farm bill will include last year's Senate language regarding livestock disaster provisions. Good news is also coming for the horticulture industry, which will see a boost in research funding. The maximum acres in the Conservation Reserve Program (CRP) is expected to be lowered to 24 million (a drop of another one million acres from the 2012 House farm bill proposal) -- phased down over a period of years. The current CRP maximum is 32 million acres.

SENATE FARM BILL UPDATE... Senate Ag Chairwoman Debbie Stabenow (D-Mich.) previously signaled her intent to markup the Senate version of the farm bill in early May. But sources say it appears too much work needs to be done to have a markup session next week. If so, both Ag panels could hold markup sessions the same week -- in mid-May. Unlike the Senate farm bill last year, this year's version will include a producer option for target/reference prices. However, the target price levels in many cases are expected to be below the House proposed levels of 2012. Some sources signal rice and peanuts could be the "favored commodities" relative to coming target price levels in the Senate. That would signal the significance of new ranking member Sen. Thad Cochran (R-Miss.). Crop insurance could see a few changes in the Senate mix, with the Actual Production History yield plug deleted, and last year's irrigation and nonirrigated language altered.

CHINA STOCKPILES MORE DOMESTIC CORN THAN ANTICIPATED... China procured a higher-than-anticipated 24.77 MMT of domestic corn supplies in northeast provinces during the six-month stockpiling program that ended April 30, according to China National Grain and Oils Information Center. The active stockpiling tightened supplies, driving domestic prices higher. State-run grain trading firm Sinograin is now likely to import less corn, but private firms may bring in more given tighter supplies and higher prices domestically.

CHOICE BEEF CLIMBS CLOSER TO ALL-TIME HIGH... Choice boxed beef prices surged another $1.09 (Select was up 81 cents) Thursday to top the $200 mark for the second time ever. At $200.58, Choice boxed beef prices are only 60 cents shy of the all-time record of $201.18, which was posted on Oct. 16, 2003.

CASH HOGS CALLED MOSTLY STEADY... With cutting margins now solidly in the red, packer demand for cash hogs is expected to ease to close out the week. As a result, cash hog bids are expected to be steady at most Midwest locations today.

OVERNIGHT DEMAND NEWS... India tendered to export 110,000 MT of wheat.


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