CORN, WHEAT FAVORING THE UPSIDE TO START THE WEEK... Corn futures saw mixed trade overnight, but most contracts are fractionally higher as of 6:30 a.m. CT. Soybean futures are 4 to 8 cents lower, with deferred contracts leading to the downside. Wheat futures are 2 to 4 cents higher in most contracts at all three locations amid additional corrective short-covering. The U.S. dollar index is firmer this morning, while crude oil futures are under pressure.
CONGRESS IS ON HOLIDAY RECESS... Both chambers are in recess. The Senate returns Dec. 9. The House returns Dec. 2. The House is scheduled to end the 2013 session on Dec. 13. The Senate is scheduled to be in session through Dec. 20. The House has only eight legislative days scheduled in December. That doesn't leave much time for completing several items this calendar year, including any farm bill, budget agreement and other lingering issues.
FARM BILL TELECONFERENCE EXPECTED TODAY... The four principals are expected to converse sometime today on lingering farm bill conference issues. But the main item continues to be the level of food stamp funding cuts. Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) reportedly has refused to go higher than the Senate-passed farm bill level of $4 billion in food stamp cuts, considerably below the $39 billion in cuts over 10 years in the House-passed bill. That entrenched position made it impossible for Conference Chairman Rep. Frank Lucas (R-Okla.) to accept, knowing full well that level would be nixed by House GOP leaders. The situation has some Democratic lawmakers blaming the "House GOP leadership" for the current farm bill negotiations collapse, but insiders say it is Stabenow's position on food stamps funding cuts that is a key reason. The four farm bill principals will reportedly confer by telephone today. But as with anything with this farm bill process, nothing can be assured.
CHINA COULD LOWER LONG-TERM CORN SELF-SUFFICIENCY TARGETS... China could lower its food grains self-sufficiency targets due to increasing urbanization and declining water and farmland resources, according to Han Jun, the head of the Development and Research Centre (DRC). Han estimated that by 2020, China's corn self-sufficiency rate could be 92%, which would imply corn imports of 19.87 MMT. By 2035, he says a self-sufficiency rate of 84% could be expected, which would imply corn import needs of 50.36 MMT. China currently strives for 95% self-sufficiency on corn. Han projects soybean imports could reach 69.06 MMT by 2020 and 89.28 MMT by 2035. DRC directly advises and issues policy recommendations to Chinese officials. While China's ag minister reaffirmed plans to stick to its established self-sufficiency target, the country's commerce minister recently said the country will boost imports, especially grains.
CHINA BEGINS CORN & SOYBEAN STOCKPILING... The state stockpiler in China, China Grain Reserves Corp., has started buying corn and soybeans in northeast China. These stockpiling efforts are aimed at boosting domestic soybean and corn prices.
CHINESE COTTON BUYS FOR STATE RESERVES PICKS UP... China bought 481,220 MT of domestic cotton for its state reserves last week, which was around half of the targeted volume. Less than ideal weather has tightened available supplies. Nevertheless, the country's pace of cotton stockpile purchases has picked up. China has purchased 2.65 MMT as of Friday, which is just 7% behind last year's pace. The country's stockpiles are expected to tally more than 11 MMT this marketing year.
CCC ANNOUNCES NOVEMBER FEEDSTOCK FLEXIBILITY PROGRAM RESULTS... USDA's Commodity Credit Corporation (CCC) announced Friday that its Nov. 14 offer to sell its sugar inventory for bioenergy production under the Feedstock Flexibility Program resulted in sales of 216,740 short tons to bioenergy producers for $11.3 million. CCC also announced a new invitation to sell the 79,750 short tons remaining in inventory. The latest invitation lowers the minimum quantity for bids to 5,000 short tons for bioenergy and other non-food uses. CCC had acquired this sugar as a result of sugar loan forfeitures in October. Sugar prices plunged below market price support levels this year due to record U.S. sugar production and record Mexican sugar imports.
NEUTRAL CATTLE ON FEED KEEPS ATTENTION ON BEEF MARKET, SHOWLISTS... Live cattle futures saw a downside breakout last week, but after doing so the market paused. The Cattle on Feed Report came in about as expected Friday and the Cold Storage Report showed frozen beef stocks just below expectations. This should limit any reaction to start the week, and it should keep attention on boxed beef action and showlist estimates to start the week. On Friday, both cuts of beef firmed and movement impressed at more than 200 loads. Nearby futures are currently in line with last week's cash cattle trade.
CASH HOG MARKET EXPECTED TO REMAIN UNDER PRESSURE... The Cold Storage Report released Friday is expected to get a neutral read as frozen pork stocks as of Oct. 31 totaled 566.7 million lbs., which was just 1.6 million lbs. more than traders had anticipated. Therefore, traders will be watching the cash market for direction. Packers have kept bids steady to lower in recent weeks as supplies are readily available and expanding. The same is expected to be true this week as packers are preparing for a holiday-shortened kill.
WEEKEND DEMAND NEWS... An Isreali group of private buyers tendered for 100,000 MT of optional origin corn. Lebanon purchased 20,000 MT of Romanian wheat. Egypt issued a tender to export 70,000 MT of wheat. Bangladesh also tendered for 50,000 MT of wheat.