NO OVERNIGHT ACTION, ABBREVIATED TRADING SCHEDULE... There was no overnight action due to the Thanksgiving holiday. The grain, oilseed and livestock markets will open for electronic and open outcry trade at their normal time this morning, but they will close at noon CT for grains and 12:15 p.m. CT for livestock futures. We will send out a brief closing market commentary in "After the Bell" today. Any other major breaking news or market-moving developments will be covered on www.profarmer.com.
OPENING CALLS... Corn futures are expected to open steady to 2 cents higher thanks to a solid weekly export sales tally. Soybeans are also expected to benefit from confirmation of strong demand and thus are expected to post gains of 3 to 6 cents on the open. USDA this morning announced 110,000 MT daily sale to China and soybean export sales were highly impressive. Wheat futures are also expected to favor the upside this morning. Live cattle futures are expected to open steady to higher in reaction to firmer cash cattle trade Wednesday. Lean hog futures are expected to be choppy as traders weigh strong pork demand against burgeoning supplies.
WEEKLY EXPORT SALES REFLECT IMPRESSIVE SOYBEAN DEMAND... USDA's Weekly Export Sales Report reflected very strong soybean demand. Net sales of nearly 1.406 MMT for 2013-14 and 364,900 MT for 2014-15 topped expectations (700,000 MT and 1.3 MMT) by a wide margin, with China accounting for the bulk of the purchases. Soybean exports of 1.844 MMT were also highly impressive. Corn export sales were also strong at 1.007, though the tally fell within the pre-report guess range of 800,000 MT to 1.1 MMT. Wheat export sales of 562,200 MT also met expectations for sales between 375,000 MT to 625,000 MT. Soymeal sales of 307,900 MT for 2013-14 topped expectations while soyoil sales of 18,800 MT for 2013-14 met expectations. Weekly cotton sales of 235,700 RB for 2013-14 were solid with Turkey and China as the lead buyers.
AUSTRALIAN GOV'T REJECTS ADM TAKEOVER BID FOR GRAINCORP... Australia has rejected the $2.8 billion (US$2.6 billion) takeover of GrainCorp by U.S. grain company Archer Daniels Midland (ADM), saying the decision was due to the concerns raised within Australia about the deal and the country’s Foreign Investment Review Board (FIRB) failing to reach a consensus agreement. "Many industry participants, particularly growers in eastern Australia, have expressed concern that the proposed acquisition could reduce competition and impede growers’ ability to access the grain storage, logistics and distribution network," Australian Treasurer Joe Hockey said in announcing the decision. "Given that the transition towards more robust competition continues and a more competitive network is still emerging, I consider that now is not the right time for a 100% foreign acquisition of this key Australian business." Hockey did say he was open to the possibility for ADM to increase its stake in GrainCorp to 25%, a move that ADM said it would consider. "We are disappointed by this decision," ADM Chairman and Chief Executive Patricia Woertz said in a statement. "Throughout this process, we worked constructively to create an arrangement that would be in Australia’s best interests and made substantial commitments to address issues that were important to stakeholders." The Australian Competition and Consumer Commission had previously approved the deal.
EPA OFFICIALLY PUBLISHES PROPOSED 2014 RFS VOLUME REQUIREMENTS... The Environmental Protection Agency (EPA) today in the Federal Register is publishing its proposed 2014 Renewable Fuel Standard (RFS) volume requirements for a biofuel program that requires fuel refiners to mix some ethanol and other renewable fuels in with conventional gasoline. The agency lowered the ethanol mandate in the draft rule, partly in response to concerns from the oil-and-gas industry. They said that refiners were being asked to mix a blend of gasoline that cars can’t use. Ethanol groups have expressed concern about the lower standard. The public will have 60 days to comment on the draft regulation. Additionally, the agency is finalizing a greenhouse gas reporting rule to "improve the quality and consistency of the data collected by the EPA."
BRAZIL TRADE RETALIATION AGAINST U.S. COTTON SUBSIDIES LIKELY DELAYED UNTIL AT LEAST DEC. 10... Brazilian government officials postponed a meeting at which they were expected to decide to impose trade retaliation against U.S. exports in retaliation against U.S. cotton subsidies and the failure of the U.S. government to alter the program via a new farm bill. A special inter-ministerial group known as CAMEX was expected to convene Nov. 27 and consider options in terms of the monetary value, method and timing of imposing trade retaliation, as well as which sectors would be affected. The meeting instead was changed to Dec. 10. The U.S. in recent months has not paid the monthly $12.25 million it agreed to pay Brazil as part of an interim settlement to a dispute over U.S. cotton subsidies found trade distortive via a World Trade Organization (WTO) challenge. Under an interim settlement, reached in 2010, the U.S. agreed to pay the Brazil Cotton Institute -- a special organization devoted to bolstering Brazilian cotton production -- a total of $147 million annually. In return, Brazil suspended the retaliation it was authorized to impose by the WTO. USDA Sec. Tom Vilsack has stated he no longer had authority to make the payments, but observers dispute that assessment.
CHINA REJECTS U.S. CORN SHIPMENT... China has returned a shipment of U.S. corn after detecting MIR 162, a banned genetically modified factor, in a 60,000 MT shipment of U.S. corn, according to a spokesman for the General Administration for Quality Supervision and Quarantine. The country rejected another U.S. corn shipment last week for containing a GMO variety not approved for export.
ARGENTINE EXCHANGE RAISES SOYBEAN PLANTED ACREAGE ESTIMATE, TRIMS CORN... The Buenos Aires Grains Exchange raised its soybean planted area estimate for Argentina by 250,000 hectares to 20.45 million hectares. The exchange also cut its corn planted acreage estimate from 3.46 million hectares to 3.3 million hectares on Thursday.
CHINA BEGINS CORN & SOYBEAN STOCKPILING EFFORTS... Northeast China's province of Heilongjiang is expected to begin implementing purchases for its stockpiling program for corn and soybeans today. This program is slated to remain in place until April 30, 2014, and it is aimed at raising domestic floor purchase prices. This province is a major production region in China; it typically produces around 40% of the country's total soybean output.
CHINESE GRAIN PRODUCTION UP FOR 2013... China harvested 601.94 MMT of grain in 2013, which is a 2.1% increase from 2012, according to the National Statistics Bureau of China. The bureau did not break down the harvest results by category, but it did note this marks the 10th consecutive record-high harvest for the nation.
IGC RAISES GLOBAL GRAIN PRODUCTION PROJECTIONS... International Grains Council on Thursday raised its global wheat crop projection for 2013-14 by 2 MMT to 698 MMT, which is well above the previous year's crop of 655 MMT. IGC cited larger crop expectations for China and the U.S. as reasons for the increase. IGC also increased its 2013-14 global corn crop projection by 2 MMT to 950 MMT thanks to expectations for an increase in the U.S. crop. This would represent a record-large global corn crop.
CHINA SELLS 51% OF COTTON UP FOR AUCTION... China sold just over half of the cotton put up for sale in its much anticipated auction of state reserves. The country sold 12,312 MT of the 24,354 MT put up for auction. Relatively high prices and quality concerns limited demand for the fiber. Sales will continue until the conclusion of August 2014.
BEEF MARKET STRENGTH LEADS TO HIGHER CASH CATTLE TRADE... Cash cattle trade got underway in Kansas Wednesday afternoon at $132, up $1 from the bulk of trade in the region last week. While showlists are heavier this week, packers were unwilling to come out of the Thanksgiving holiday short on supplies. And a surge in the boxed beef market -- both in terms of prices and movement -- on Wednesday helped give feedlots the advantage in negotiations. But bullish reaction could be limited as traders already had higher cash trade factored into futures prices.
STRONG PORK MOVEMENT CONTINUES... The pork market continues to impress in terms of movement. On Wednesday, movement climbed to 443.94 loads on a 70-cent drop in the pork cutout value. Nevertheless, packers have seen profit margins decline (though they are still solidly in the black) and supplies are ample. This is expected to limit buying enthusiasm.
OVERNIGHT DEMAND NEWS... An Isreali group bought around 130,000 MT of optional origin corn. South Korea bought another 60,000 MT of U.S. corn late on Wednesday. South Korea's Major Feedmill Group bought 55,000 MT of optional origin feed wheat.