MILDLY FIRMER TONE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading fractionally to 1 cent higher, soybeans are 1 to 3 cents higher and wheat futures are steady to 2 cents higher in most contracts. The U.S. dollar index is holding near unchanged this morning following light, two-sided trade overnight.
FARM BILL CONFERENCE LEADERS MET WEDNESDAY TO BEGIN SEEKING AGREEMENT ON DIFFERENCES... House Agriculture Chairman Frank Lucas (R-Okla.), ranking Democrat Collin Peterson (D-Minn.), Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) and ranking Republican Thad Cochran (R-Miss.) met Wednesday for around two hours to discuss the House bill (HR 2642) and the Senate bill (S 954) differences with a goal to reach major agreements by Thanksgiving. Most sources do not expect a completed farm bill conference report until sometime in December. The biggest divide remains food stamps, both in funding and policy areas. The Senate would cut $4 billion over 10 years, while the House would eliminate $39 billion over the same period. Stabenow has said that the stimulus expiration of food stamp benefits, at around $11 billion, should be counted in any food-stamp savings, but official budget rules would not allow such savings. Other issues include several thorny farm safety net items and country-of-origin labeling rule changes. Stabenow said she would fight to keep the Senate's language tying conservation compliance to crop insurance as "one of our highest priorities."
WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Oct. 31, traders expect: corn sales between 1 million and 1.3 million MT; wheat sales between 350,000 and 500,000 MT; soybean sales between 800,000 and 1.1 million MT; soymeal sales between 190,000 and 250,000 MT; and soyoil sales between 20,000 and 60,000 MT.
FAO RAISES WORLD CEREALS PRODUCTION, STOCKS FORECASTS... The Food and Agriculture Organization of the United Nations (FAO) raised its 2013-14 global cereal grains forecast nearly 10 MMT from last month to 2.498 billion MT. FAO's global cereal grains stocks forecast was increased by 5 MMT from October to 564 MMT, which is 13% higher than 2012-13. Much of that year-over-year increase is driven by global coarse grains stocks, which are forecast up 30% from 2012-13, while global wheat stocks are seen up 7% and global rice stocks are forecast to rise 3% from last year. Meanwhile, the FAO food price index rose for the first time since April to 205.8 in October, up 2.7 points from September. The higher food prices were largely driven by increased sugar prices.
USDA IS CHANGING THE RULES FOR MEAT AND POULTRY INSPECTIONS TO ALLOW IT TO APPROVE LABELS IN MORE CASES... USDA's Food Safety & Inspection Service, via a notice in today's Federal Register, is expanding the cases in which it can approve generic labels, which do not require meat producers and importers to submit the printer’s proof of labels for approval. Only labels for products with special claims and statements, such as organic meats or those produced under religious exemptions, will now need to be submitted for evaluation. FSIS is also consolidating rules for meat labeling. The rule will take effect in 60 days.
SIGNS POINT TO LATE-WEEK CASH CATTLE TRADE... Initial cash cattle bids and asking prices came in roughly $4 apart in the Plains and there seems to be little urgency on the part of either feedlots or packers to actively negotiate. Therefore, active cash cattle trade isn't likely until Friday unless packers unexpectedly offer firmer bids for cattle today. Most cash sources are anticipating steady to weaker cash cattle prices compared with last week's mostly $132 trade in the Plains.
HOG/PORK SUPPLIES BUILDING... Wednesday's estimated hog slaughter of 438,000 head would be the largest daily kill of the year and the highest since September 2012, according to Urner Barry. Strong cutting margins are giving packers incentive to push as many hogs through kill lines as possible. In addition to building slaughter supplies, Iowa/southern Minnesota hogs weights are on the rise. The increased pork production threatens to weigh on the pork product market.
TREASURY ANNOUNCES NEW DEBT OFFERING... The U.S. Treasury Department announced they will sell a new type of Treasury debt -- an offering that will pay more interest as market rates rise. The first sale of of these floating-rate notes will take place on Jan. 29, 2014, with the auction of between $10 billion and $15 billion of two-year notes. This is the first new offering from the Treasury Department in some 16 years when the Treasury rolled out its inflation-protected securities, or TIPS.
OVERNIGHT DEMAND NEWS... Iraq tendered to buy at least 50,000 MT of optional origin wheat. South Korea tendered to buy 10,000 MT of optional origin non-GMO soybeans.