First Thing Today (VIP) -- October 14, 2013

October 14, 2013 01:19 AM
 

GOOD MORNING!

CORN AND WHEAT WEAKER, BEANS FIRMER OVERNIGHT... As of 6:30 a.m. CT, corn futures are steady to fractionally lower, soybeans are 6 to 11 cents higher and wheat futures are steady to 4 cents lower. The U.S. dollar index is modestly weaker this morning after two-sided trade overnight.

DEBT LIMIT D-DAY IS THURSDAY, BUT TALKS LINGER WITHOUT ACCORD... Weekend developments saw House GOP leaders' plan rejected by President Obama and the GOP saying the president negotiated in bad faith, wanting instead to split House and Senate Republicans. The focus now turns to negotiations between Senate GOP and Democratic leaders. Some Republicans warned the White House and Senate were in danger of "overreaching" themselves, arguing that Dems were showing little willingness to make any concessions even as the GOP was looking for a way out of the crisis it largely fostered. The latest issue is over funding levels for the fiscal year that started Oct. 1. Our best sources still see an agreement, which could include more talks ahead. But betting that both parties can come to an agreement has lost a lot of bets lately.

HOUSE FARM BILL CONFEREES WERE FINALLY ANNOUNCED SATURDAY... This means official farm bill conference talks can begin. Several thorny issues include food stamp funding, farmer safety net differences and whether or not to include dairy supply management language with the biggest issue being food stamps. If the final agreement is a cut of $10 billion to $12 billion over ten years, with a watered-down work requirement language, that could be sold to enough House Democrats and Republicans to clear the conference report. There should not be a problem clearing the conference report in the Senate. Meanwhile, House Agriculture Chairman Frank Lucas (R-Okla.) indicated he is cool to the idea of the farm bill and its proposed savings becoming part of any larger deal crafted by lawmakers on the debt ceiling or spending or both.

EPA ADMINISTRATOR MCCARTHY AND USDA SECRETARY VILSACK SAY NO DECISION REACHED ON 2014 RFS... EPA Administrator Gina McCarthy and USDA Secretary Tom Vilsack late Friday said that the Obama administration has not reached a decision on its proposed ethanol usage mandate for 2014. But they did not deny that EPA is looking at cutting the targets to reflect the ethanol blend wall. A draft proposal suggests the target will be reduced below this year's level.

CHINESE SOY IMPORTS DOWN SHARPLY IN SEPTEMBER... China imported 4.7 MMT of soybeans in September, down 26.2% from August and 5.4% below year-ago. Through the first nine months of this calendar year, China has imported 45.75 MMT of soybeans, a 3.3% increase from year-ago.

CHINESE TRADE DATA DISAPPOINTS, INFLATION ACCELERATES... China unexpectedly saw its exports drop 0.3% in September while imports rose 7.4%, leaving the country with a trade surplus of $15.2 billion for the month. That was far below expectations and down sharply from a trade surplus of $28.5 billion in August. Meanwhile, China's consumer price index (CPI) came in at a 7-month high of of 3.1% above year-ago in September, up from a 2.6% rise in August. Food prices surged 6.1% above year-ago last month, while non-food prices rose 1.6%. China's producer price index (PPI) declined 1.3% versus year-ago in September.

CHINA RAISES WHEAT SUPPORT PRICE... China will raise the price it pays farmers for wheat in 2014 by 5% to 2,360 yuan ($386) per ton, according the National Development and Reform Commission. The economic planning agency says the higher price is to protect farmers and assure there's enough wheat production.

EGYPT'S MAIN WHEAT BUYER SAYS IT HAS NO FINANCIAL PROBLEMS... Egypt's General Authority for Supply Commodities (GASC), the country's main wheat buyer, says it has no financing problems for global wheat purchases. Speculation has arising that financial problems are causing delays in opening lines of credit, keeping the country from making global wheat purchases in recent weeks. GASC canceled a tender to purchase optional origin wheat last week, saying prices were too high.

CASH CATTLE TRADED STEADY/HIGHER... Cash cattle trade $2 higher at $128 in Texas and Kansas late Friday, while Nebraska cattle moved at steady prices. Given the cash strength last week, traders have bullish hopes for this week's cash trade.

CASH HOGS CALLED STEADY/WEAKER... Packers are expected to open the week offering steady to weaker cash hog bids. While cutting margins are believed to be in the black, they have been tightening recently and market-ready hog supplies are building.

COLUMBUS DAY... Today is a federal holiday, meaning government offices are closed, though that doesn't matter since the shutdown is ongoing. Grain and livestock markets are open for normal trading hours today.

WEEKEND DEMAND NEWS... Exporters reported no tenders or purchases.

 

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