First Thing Today (VIP) -- November 20, 2013

November 20, 2013 12:14 AM


CORN SLIGHTLY WEAKER, BEANS AND WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are 1 to 2 cents lower, while soybeans and wheat are narrowly mixed. The U.S. dollar index is modestly weaker this morning.

DECISION TIME FOR FARM BILL CONFEREES... If House-Senate farm bill conferees are going to make their hoped-for deadline of wrapping up a conference report on a new farm bill in time to get the package finished before lawmakers leave for the year in mid-December, the clock is ticking on them getting agreement prior to the Thanksgiving break, which starts tomorrow -- Nov. 21. So far, the four principals in the process have not yet come to terms on provisions in the bill and remain "hopeful" they can find agreement soon. Rumblings are that there has been little give on the Senate side over issues relative to the commodity title and food stamp funding/policy. There are still said to be some on the Senate side that want to "slow walk" the matter forward and get it included in a continuing resolution to fund the government past Jan. 15, 2014. So decision time on a new farm bill looms large as the clock ticks down.

KEY HOUSE MEMBER: RFS REFORM EFFORTS 'STALLED' FOLLOWING EPA RFS PROPOSAL... The chairman of the House Energy and Commerce Committee said efforts to revise the Renewable Fuel Standard (RFS) have "stalled for now" and aren't likely to continue any time in the near future. Rep. Fred Upton (R-Mich.) said a proposed rule issued by the Environmental Protection Agency (EPA) that would for the first time reduce the RFS blending requirement for 2014 sapped momentum for congressional action. "The EPA has made their move, and I don't think we are likely to do anything in the near future," Upton told Bloomberg BNA. "We are stopped for the moment." In July, Upton tapped four committee Republicans to lead efforts to draft potential revisions to the RFS: Reps. John Shimkus (R-Ill.), Lee Terry (R-Neb.), Cory Gardner (R-Colo.), and Steve Scalise (R-La.). "We're going to have to reconnoiter and figure out if we are going to go forward with our little committee or not," Terry told Bloomberg BNA. "Right now, we've been so busy that we haven't been able to get together."

WRRDA CONFEREES TO HOLD FIRST MEETING TODAY; HOPE TO ISSUE CONFERENCE REPORT FIRST WEEK OF DECEMBER... Conferees on water resource legislation (WRRDA bill) will meet for the first time today, with a goal of completing work the first week of December. The House and Senate passed their respective water resources bills by overwhelming margins. The Senate passed the Water Resources Development Act (S 601) in May by a vote of 83-14. In October, the House passed the Water Resources Reform and Development Act (HR 3080) by a vote of 417-3. The legislation authorizes U.S. Army Corps of Engineers water infrastructure projects dealing with flood control, port maintenance and environmental restoration. Congress last enacted WRDA legislation in 2007. The initial conference sessions will likely focus on opening statements; the conference is comprised of 28 members from the House and eight members from the Senate, with Sen. Barbara Boxer (D-Calif.) serving as chairperson.

BERNANKE: INTEREST RATES TO REMAIN LOW FOR A 'CONSIDERABLE TIME'... In a speech to the National Economists Club yesterday, Fed Chairman Ben Bernanke said the Fed will aim to keep interest rates low long after tapering of its monthly bond purchases and beyond when the unemployment rate drops below 6.5%. Bernanke offered no clues as to when the Fed will begin to reduce its $85 billion per month in asset purchases, but he said tapering depends on further improvement in jobs data.

JAPAN'S CORN-FOR-FEED USE STABILIZES IN SEPTEMBER, BUT STILL DOWN FROM YEAR-AGO... Japan's use of corn in feed rations was 41.8% in September, which was steady with August but down from 42.5% last year. Japanese corn imports of 1.185 MMT in September, however, were up 5.2% from year-ago, suggesting the use of corn in feed rations may soon rise. But U.S. corn accounted for only 54.6% of Japanese imports in September compared to 73.3% last year.

ADVERSE LATE-SEASON WEATHER HURTS AUSSIE WHEAT CROP... Late-season rains are causing quality and yield concerns with the wheat crop in Western Australia. Meanwhile, frost along the country's east coast is spurring crop concerns there. If crop quality suffers due to the adverse late-season weather, it could spur more export demand for U.S. and Canadian wheat.

BOXED BEEF PRICES PLUNGE... Boxed beef prices were $1.54 (Choice) to $1.81 (Select) lower Tuesday. Though movement improved to 190 loads on the sharp price break, pressure on product prices and the sharp drop in cattle futures points to lower cash cattle prices compared to last week's $132 trade in the Plains.

PORK CUTOUT ALSO PLUNGES... While packers moved a solid 391.42 loads of product Tuesday, it took a $1.84 plunge in the pork cutout value to trigger the movement. With pork supplies building, there's more pressure on packers to move product, which could lead to additional near-term pressure on pork product prices.

OVERNIGHT DEMAND NEWS... South Korea bought 184,000 MT of corn -- 121,000 MT of U.S. origin and 63,000 MT of Black Sea origin. Japan purchased 26,370 MT of feed wheat and 69,870 MT of feed barley out of a tender for 120,000 MT of wheat and 200,000 MT of barley.


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