PRICE PRESSURE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 3 to 4 cents lower, soybeans are mostly 3 to 4 cents lower and wheat futures are fractionally to 2 cents lower in most contracts. The U.S. dollar index is under light pressure this morning.
POSSIBLE BREAKTHROUGH IN HOUSE GOP, WHITE HOUSE BUDGET TALKS... Negotiations between the Obama administration and House Republicans continued overnight at the staff level with hopes that a White House meeting on Thursday might lead to a breakthrough in the fiscal standoff that has partially shut the federal government for 11 days and threatens a damaging government default. "He didn’t say yes, he didn’t say no. We’re going to continue negotiating this evening," said House Budget Chairman Paul Ryan (R-Wis.) after the Thursday meeting with President Obama. Ryan helped draft a House GOP proposal for a six-week debt limit increase through Nov. 22 so negotiations could be held on a bigger deal. The GOP plan did not include a fiscal 2014 stopgap spending proposal, but House Armed Services Chairman Howard "Buck" McKeon, R-Calif., said adding one to the package is "one of the things we’re talking about."
SENATE PROPOSAL COULD LEAD TO REOPENING OF FEDERAL GOVERNMENT... A proposal from Sen. Susan Collins (R-Maine) to reopen the federal government and raise the debt ceiling provides hints at what is being considered in ongoing talks between the GOP and White House. Collins’ plan was part of negotiations among Republicans Thursday afternoon, including sessions held in the office of Minority Leader Mitch McConnell (R-Ky.). Along with reopening the government and raising the debt limit, it would give federal agencies flexibility to deal with the decade-long automatic spending cuts known as sequestration during the next two years. Collins’ proposal would repeal or delay the 2.3% medical device tax under the Affordable Care Act. The proposal would replace the revenue lost from the repeal or delay with so-called "pension smoothing," a strategy that would allow private businesses to lower their pension contributions in the near future in exchange for higher payments down the line. The plan would also call for income verification for those receiving benefits under the health care law.
EPA DOCUMENTS SURFACE ON 2014 RFS PLANS… EPA is proposing a 15.21 billion gallon Renewable Fuels Standard (RFS) for 2014, including a 2.21 billion gallon level for advanced biofuels and 23 million gallons for cellulosic ethanol and it would set the corn-based ethanol component at 13 billion gallons. That would be some 800 million gallons below the 2013 corn-based ethanol component at 13.8 billion. Indications are EPA readied three options for 2014 with each one at a total 2014 RFS of 15.21 billion gallons, but different levels of corn-based ethanol and advanced biofuels. One plan in an EPA proposal would set the corn-based portion at 12.36 billion gallons while a third option would put it at 13.18 billion gallons. Under the three options, the advanced biofuels component would be adjusted to keep the total level at 15.21 billion gallons. It is still not clear if the document that surfaced is the final plan as the matter remains under consideration at the Office of Management and Budget (OMB) and won’t likely be finalized until after the government reopens. And, renewable fuels proponents like the Renewable Fuels Association (RFA) have pledged to fight the shift by EPA, with RFA President Bob Dinneen saying they would "pursue every option."
OCTOBER CROP REPORTS POSTPONED... Due to the government shutdown, USDA will not release its October Crop Production and Supply & Demand Reports today, as previously scheduled. There has been no indication of when (or if) the October report data will be released.
FIRMS CUT 2013 RUSSIAN GRAIN FORECASTS... Private firms have cut this year's Russian grain crop estimates due to harvest problems in Siberia. The Institute for Agricultural Market Studies (IKAR) cut its 2013 Russian grain crop forecast by 1 MMT to 87 MMT. IKAR expects wheat product to end up around 50 MMT, down 500,000 MT from its previous forecast. SovEcon cut this year's Russian grain crop estimate to 86 MMT from 87.5 MMT previously. SovEcon trimmed its wheat production forecast to around 50 MMT, down 1.7 MMT from its previous outlook. Russia's official grain crop forecast is 90 MMT, though the country's deputy prime minister said Thursday he expects production to be between 85 MMT and 90 MMT.
U.S. RETHINKS HOW TO RELEASE SENSITIVE ECONOMIC DATA... U.S. officials are discussing changes to how the government releases sensitive economic data, seeking to bring the system in line with fast-moving financial markets, according to a Wall Street Journal article today. The system of lockups has come under scrutiny after several media firms started using the lockup to sell raw data from the government reports to high-frequency trading firms. That data, sent along high-speed transmission lines, allows firms to make computerized trades before individual traders can react.
TEXAS SWIFT PLANT MUST HALT SHIPPING BEEF TO SOUTH KOREA... The Cactus, Texas, Swift Beef Co. plant is not eligible to ship beef to South Korea, according to a notice issued by USDA's Food Safety and Inspection Service on Thursday. No explanation for the stoppage was given in the notice, but it came one day after South Korea halted beef imports from a Colorado Swift Beef plant after finding traces of Zilmax in a 22 MT shipment.
STILL WAITING ON CASH CATTLE TRADE... Cash cattle negotiations remain at a standstill in the Plains, with bids and asking prices still far apart. The lack of active cash cattle negotiations leaves a lot of uncertainty with this week's trade. Tighter showlist supplies point cash cattle prices higher, while poor margins suggest packers will be reluctant to raise bids.
PORK MARGINS TIGHTEN... While cash hog bids have been steady to weaker this week, the drop in the pork cutout value has exceeded that of the cash market, tightening packer margins. Packers are still cutting in the black, but with market-ready supplies building, tightening margins give packers no incentive to stop the slide in cash hog bids.
OVERNIGHT DEMAND NEWS... Japan purchased 101,892 MT of wheat in its weekly tender, including 38,939 MT of U.S. supplies. South Korea passed on a tender to buy 55,000 MT of optional origin corn it issued late Thursday. India sold 30,000 MT of milling wheat to the United Arab Emirates. Japan is seeking 57,000 MT of milling wheat and 38,000 MT of food-grade barley.