LIGHT SHORT-COVERING IN GRAINS OVERNIGHT... Corn futures enjoyed light short-covering overnight and most contracts are around 2 cents higher as of 6:30 a.m. CT. Soybean futures are trading near the top of their overnight trading range with gains of 3 to 8 cents as the market is optimistic USDA this afternoon will confirm harvest is past half complete. Wheat futures are enjoying followthrough buying to start the week, with all three flavors seeing gains mostly around 1 to 4 cents. The U.S. dollar index is chopping around unchanged, but crude oil and gold futures are facing pressure.
CONGRESS MOSTLY QUIET THIS WEEK; FOCUS IS ON RETURN OF ECONOMIC, USDA REPORTS... In Washington, there is not a lot officially on the schedule. While the Senate is in recess until Oct. 28, the House is in session this week beginning Oct. 22. About the only major congressional hearing on tap is a session Tuesday before the House Rules Committee that aims at setting the process for bringing the Water Resources Reform and Development Act (WRRDA) before the full chamber. Any farm bill discussions will also be of note, but the formal process will get underway the week of Oct. 28, with the initial meeting being an opportunity for a long series of statements by lawmakers.
The week opens with still some uncertainty on the economic data front as some agencies haven’t finalized their plans on what to do about missed reports. Today will see the Chicago Fed assessment of conditions along with Existing Home Sales figures. Tuesday brings one of the key missed reports -- September Employment -- along with the Richmond Fed manufacturing update. Wednesday is expected to bring the FHFA House Price Index. Thursday could be a busy day, with jobless claims, the PMI manufacturing index flash, New Home Sales and the manufacturing update from the Kansas City Fed. Friday is supposed to bring the Durable Goods report, but the Census Bureau hasn't’t yet determined what they would do with their reports as the week wound down. Consumer Sentiment will also be released on Friday. For agriculture, today will see the return of the Crop Progress report, with USDA unable to recreate back data so the report will come with comparisons to progress as of Sept. 29. But the Cold Storage data due out Tuesday won’t be delivered until Oct. 31. The Weekly Export Sales update for the week ended Oct. 3 will be released Thursday.
PRESIDENT OBAMA AGAIN MENTIONS FARM BILL IN WEEKLY ADDRESS... In his weekly address on Saturday, President Barack Obama reiterated his call for action on a new farm bill. After noting that Democrats and Republicans should work together to "pursue a balanced approach to a responsible budget," and "finish the job of fixing our broken immigration system," the President indicated that, "Third, we should pass a farm bill -- one that America’s farmers and ranchers can depend on, one that protects vulnerable children and adults in times of need, and one that gives rural communities opportunities to grow and the longer-term certainty they deserve." Meanwhile, Treasury Secretary Jack Lew on Sunday's NBC "Meet the Press" program said, "The farm bill needs to pass." As for USDA Secretary Tom Vilsack, sources inform that in recent days Vilsack has called officials in the dairy industry to tell them that there will be a dairy supply management provision in the farm bill and that they should support the measure and make it work.
CHINESE CORN, SOYBEAN IMPORTS DECLINE LAST MONTH... Customs data shows China's soybean imports at 4.7 MMT for the month of September are down 5.4% from year-ago, while its soyoil imports at 95,522 MT for the month of September are down 63.5% compared to year-ago. Chinese corn imports of 1,537 MT for the month of September are down 99.6% from year-ago, but the country's wheat imports rose 37.1% from year-ago last month to 718,482 MT. In September, China imported 201,263 MT of cotton, which is down 23.5% from year-ago, according to Chinese customs data. GDP data released Friday indicated the country's economy grew at a 7.8% clip for the third quarter, which is up 0.3 percentage points from the previous quarter.
LATE-SEASON RAINS SHRINK EXPECTED SOYBEAN OUTPUT IN INDIA... India's 2013-14 soybean crop is expected to fall 4.4% from the previous marketing year to 10.23 MMT, according to the Central Organization for Oil Industry and Trade. The trade body says heavy rain during harvest diminished the quality and quantity of the crop.
CARGILL TO CLOSE ANOTHER TEXAS FEEDLOT NEXT SUMMER... Last week, Cargill Inc. announced it will close a feedlot in Lockney, Texas, in the summer of 2014 due to tightening cattle supplies and the high cost of feed. This is the second such announcement in the past year. In February, the company idled its Plainview, Texas, beef processing plant, citing similar reasons.
UNCERTAIN CASH PROSPECTS AFTER LATE-WEEK SELLOFF... Cattle futures saw steep declines last week after higher cash cattle trade at $129 to $130, as traders are fearful the market had put in a top. But the market did see some corrective short-covering Friday, signaling some believe the selloff was overdone. Traders will watch showlist estimates and boxed beef trade as they formulate cash cattle trade expectations this week. On Friday, Choice boxed beef cuts firmed 26 cents, while Select fell $1.74. Movement failed to impress at 152 loads. There are some concerns the economic impact of the government shutdown could trim beef demand among consumers.
HOG MARKET STILL SORTING THROUGH NEWLY RELEASED DATA... The restart of government data releases late last week revealed packer profit margins are hovering near breakeven, but it also showed declines in the pork market were lighter than anticipated. Traders will continue to sort through this data this week. Post-market close Friday, USDA released weekly pork export sales data showing a surge in pork sales the week ended Sept. 26 to 21,800 MT. But countering this is a $1.53 slide in the pork cutout value Friday; movement also slowed to 275.17 loads. Supplies are expanding seasonally, but so are slaughter rates. This will likely keep the cash market steady to lower to start the week.
WEEKEND DEMAND NEWS... Iraq purchased at least 50,000 MT of Ukrainian wheat.