First Thing Today (VIP) -- November 21, 2013

November 21, 2013 12:22 AM


GRAINS FIRMER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are 5 to 7 cents higher and wheat futures are fractionally to 2 cents higher. The U.S. dollar index is mildly weaker this morning.

FARM BILL PRINCIPALS MET AGAIN WEDNESDAY EVENING, PROGRESS SAID TO BE MADE... The leaders of the House and Senate Ag Committees held a 90-minute meeting Wednesday evening that all parties are depicting as one where progress was made but no final agreement has yet been reached. Funding for nutrition and food stamp programs continue as a key with the latest twist being that a House-pushed cut level of $10 billion would reinvest some of those dollars in employment and training grants to states. Lawmakers are still pushing to get a framework agreement by week's end.

WEEKLY EXPORT SALES OUT THIS MORNING... For the week ended Nov. 14, traders expect: corn sales between 750,000 and 950,000 MT; wheat sales between 375,000 and 475,000 MT; soybean sales between 650,000 and 850,000 MT; soymeal sales between 200,000 and 350,000 MT; and soyoil sales between 30,000 and 80,000 MT.

SENATE PANEL TODAY EXPECTED TO APPROVE YELLEN NOMINATION TO HEAD FEDERAL RESERVE... After today's expected vote of approval by the Senate Banking Committee, Senate leaders have already made plans to bring the nomination to the full Senate as soon as possible. Of note, Sen. Bob Corker (R-Tenn.), who opposed Yellen’s nomination three years ago for her current post as the central bank’s vice chair, said Wednesday he had changed his views after Yellen gave him assurances she would moderate the Fed’s unprecedented asset purchases when data supports that action. Senate Democratic leadership has planned to devote floor time to the nomination and expects it will need the approval of 60 senators to end debate or overcome a hold and move to a vote.

CROP INSURANCE INDEMNITIES NEAR $5.8 BILLION FOR 2013 CROPS... U.S. crop insurance indemnities rose to $5.779 billion as of Nov. 18, moving the loss ratio to 0.49, according to Risk Management Agency (RMA) data. However, payouts under the program still are far below the record indemnities for 2012 crops of $17.420 billion and a loss ratio of 1.57. Wheat continues to lead the indemnities paid out thus far at $2.119 billion, accounting for just over 36% of all indemnities to date on 2013 crops. Corn payouts have reached $1.503 billion with cotton at $692 million. Indemnities for soybeans remain under the $500 million mark so far. On a state-by-state basis, the recovery from the drought in 2012 is very evident in key Corn Belt states -- payouts in Illinois only stand at $154 million so far this year after hitting $3.504 billion last year while Indiana farmers have only received $44 million this year compared to $1.485 billion for 2012 losses.

CHINA'S MANUFACTURING SECTOR EXPANDS AT SLOWER PACE IN NOVEMBER... China's flash HSBC purchasing managers' index (PMI) slipped to 50.4 in November from a final reading of 50.9 in October. The slower growth pace was spurred by a downtick in new export orders.

FRIDAY CASH CATTLE TRADE LIKELY... Packers have yet to establish initial cash cattle bids in the Plains, while feedlots are asking steady to $2 higher prices for this week's supplies. Given the slow start to cash cattle negotiations and Friday's Cattle on Feed Report, active cash cattle trade is not expected until late Friday. Most traders are expecting weaker cash prices compared with last week's $132 trade given poor packer margins.

PORK CUTOUT PLUNGES AGAIN... The pork cutout value was another $1.04 lower yesterday after dropping $1.84 on Tuesday, but movement surged to 501.02 loads on the day. With packers having to actively lower pork product prices to encourage stronger movement amid building pork supplies, cash hog bids will remain under pressure despite still-strong packer cutting margins.

OVERNIGHT DEMAND NEWS... Japan purchased 133,480 MT of milling wheat from its weekly tender, including 51,556 MT of U.S. supplies. South Korea passed on a tender to buy up to 65,000 MT of optional origin feed wheat and tendered to buy 200,000 MT of optional origin non-GMO soybeans for 2015 delivery. Lebanon purchased 20,000 MT of Romanian wheat. India tendered to export 55,000 MT of wheat. Tunisia tendered to buy 109,000 MT of optional origin durum wheat.


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