First Thing Today (VIP) -- November 13, 2012

November 13, 2012 12:27 AM
 

GOOD MORNING!

CORRECTIVE BOUNCE OVERNIGHT... Grain and soy futures rebounded from Monday's sharp selloff overnight. As of 6:30 a.m. CT, corn futures are trading 3 to 6 cents higher, soybeans mostly 7 to 10 cents higher and wheat futures mostly 4 to 6 cents higher at all three exchanges. The U.S. dollar index is modestly firmer this morning.

DECISION ON UKRAINE WHEAT EXPORTS EXPECTED SOON... Export sources tell Reuters they expect an official decision from the Ukrainian government on wheat exports soon as shipment totals are near agreed-to levels. According to a letter from the ag ministry to exporters, 2012-13 Ukrainian wheat exports totaled 4.78 MMT through Nov. 12 with another 617,000 MT ready to be shipped shortly. Ukraine has said it will cap 2012-13 wheat exports at 5.5 MMT. Ukraine's ag minister originally said the country would halt wheat exports Nov. 15, but other officials have indicated an export ban will be Dec. 1.

CHINA TO INCREASE CORN, BEAN STOCKPILING PRICE... China will soon start stockpiling corn and soybean supplies from domestic producers at higher prices than year-ago, an industry source familiar with the situation tells Reuters. The source says the Chinese government will buy domestic soybeans at 4,600 yuan ($731) per ton, up 15% from year-ago, and domestic corn at 2,100 to 2,140 yuan ($334 to $340) per ton, up 7% from year-ago. The stockpiling price for soybeans would be above that of imported soybeans.

ETHANOL EXECUTIVE EXPECTS EPA TOP MISS TODAY'S 'DEADLINE' RE: RFS WAIVER DECISION... The Environmental Protection Agency (EPA) will likely miss the deadline to respond to requests from states to reduce the volume of ethanol that must be blended into gasoline, according to an ethanol industry representative. But the industry remains confident EPA will deny requests to waive the renewable fuel standard's ethanol requirements, said Bob Dineen, president and chief executive officer of the Renewable Fuels Association. "The conditions to grant this waiver just don't exist," he said. Under the Clean Air Act, EPA has 90 days to respond to such petitions. The agency had been expected to respond to the waiver requests by Nov. 13. Dineen said the agency also exceeded the 90 days provided in the Clean Air Act when it denied a similar petition from Texas to waive the standards in 2008. An EPA spokeswoman said the agency is still preparing its response as well as the 2013 volume requirements under the renewable fuel standard.

USDA OFFICIAL REPEATS QUICK FARM BILL IMPLEMENTATION... USDA implementation of a new farm bill will take place as quickly as possible, USDA Undersecretary for Farm and Foreign Agricultural Services Michael Scuse told an Idaho farm meeting. Scuse said a bigger issue for USDA is when the bill gains final approval. "Congress will pass it today, yet they will want it enacted yesterday," Scuse said. "It's very difficult to enact a bill quickly." However, he said implementation of the 2008 Farm Bill was delayed by the Bush administration and Congress should not use that as a reason to not act on a new bill. "If they pass a farm bill, we're going to do everything we can to implement it as quickly as possible," Scuse stated. Some U.S. lawmakers say that even if Congress were to pass a farm bill in the lame-duck session that starts today, by no means a certainty, some type of extension of the 2008 Farm Bill would be needed. There is also the issue of implementing a new cotton safety net program -- STAX.

CHINA OCTOBER COTTON IMPORTS UP FROM MONTH- AND YEAR-AGO... China imported 272,100 MT of cotton in October, according to CNCotton, citing official customs data. That was 3.5% higher than September cotton imports and a 7.8% increase from year-ago. Through the first 10 months of this year, Chinese cotton imports have totaled 4.3 MMT, up 96% from year-ago.

BOXED BEEF STARTS STRONG, BUT CASH EXPECTATIONS STILL WEAK... Boxed beef prices were 15 cents (Select) to $1.43 (Choice) higher Monday and packers moved a solid 157 loads of product on the day. Even if the boxed beef market continues to strengthen through the week, packers are not likely to pay higher prices for cash cattle as they are buying for a holiday-shortened slaughter schedule next week.

PORK CUTOUT DROPS... The pork cutout value was 90 cents lower Monday as hams and ribs dropped sharply. While packer margins are still strong, demand for cash hogs will remain limited as pork plants are bought ahead on slaughter needs and market-ready supplies are plentiful. As a result, cash hog bids will remain steady to weaker across the Midwest.

OVERNIGHT DEMAND NEWS... South Korea tendered for up to 125,000 MT of optional origin corn in two separate tenders. Japan is seeking 195,008 MT of U.S. and Canadian wheat in its weekly tender. Algeria tendered for 50,000 MT of optional origin wheat.

 

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