First Thing Today (VIP) -- October 28, 2013

October 28, 2013 01:16 AM
 

GOOD MORNING!

CORN AND BEANS WEAKER, WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are fractionally to 1 cent lower, soybeans are 3 to 5 cents lower, SRW and HRW wheat are slightly weaker and HRS wheat is narrowly mixed. The U.S. dollar index is anchored near unchanged this morning following a narrow range in two-sided trade overnight.

BUDGET AND FARM BILL CONFERENCE SESSIONS HIGHLIGHT WASHINGTON ACTION THIS WEEK... On Wednesday, conferees will confer for the first time on getting a Fiscal Year 2014 budget agreement, and on what may be a lengthy process in getting a farm bill conference report. The first farm bill session will largely be statements from many lawmakers, some of whom will not be conferees. The House today will consider a resolution to disapprove an increase in the federal debt limit, which has no chance of becoming law. The week’s agenda also could include legislation to revise the Dodd-Frank financial regulatory overhaul. Meanwhile, on Thursday comes the swearing-in of Senator-elect Cory Booker (D-N.J.). The week will see a still-staggered batch of economic data released as the recovery process from the partial government shutdown continues. For agriculture, today will bring another weekly update on harvest progress from USDA, along with a big day Thursday for data. That day will see releases delayed by the shutdown, including Cattle on Feed, Cold Storage and Cotton Ginnings. The regularly scheduled Ag Prices report also comes out that day. But the real attention will be on the Weekly Export Sales Report as that will contain totaled data for the weeks ending Oct. 10, 17 and 24, so it will be a mountain of data for markets to digest. On the economic front, the Fed will conduct its two-day Federal Open Market Committee meeting Tuesday and Wednesday.

WILL EPA LIVE UP TO ITS ALREADY DELAYED ANNOUNCEMENT OF 2014 RFS VOLUME REQUIREMENTS?... The 16-day government shutdown gave EPA the excuse it needed to delay its previously promised date of "September 2013" to announce the initial Renewable Fuel Standard (RFS) volume requirements -- via a notice of proposed rulemaking (NPRM). EPA's web site now says the announcement will come "October 2013," which ends Thursday.

WHAT WILL EPA ANNOUNCE RELATIVE TO THE RFS?... All bets are off following the well-orchestrated leak of a draft of EPA's proposed options. The leak put the coming RFS announcement more into the political arena than it already was prior to the release of the draft document that went to the Office of Management and Budget (OMB). Unknown is whether or not an interagency committee altered EPA's apparent preference to lower the RFS volume requirements, especially for corn-based ethanol, beyond those in place for 2013. During the week of Oct. 21, OMB hosted four meetings on the upcoming RFS rules. Meetings were held with representatives from the renewable fuels industry and various officials from EPA, OMB and the White House Office of Science and Technology Policy.

MINISTRY REVISES DOWN CHINESE OCTOBER SOY IMPORT FORECAST... China is now forecast to import 5.21 MMT of soybeans this month, according to the Ministry of Commerce, down from its previous 5.85 MMT projection. That would still be up 10.9% from the 4.7 MMT of soybean imports in September. The ministry forecasts Chinese soybean imports to slip to 2.97 MMT in November.

BULLISH CASH CATTLE HOPES... Traders start the week with bullish hopes for cash cattle trade coming off of last week's record cash prices, which saw cattle trade as high as $132 in the Plains. Given negative cutting margins, however, packers may be less willing to actively raise cash cattle bids unless the boxed beef market strengthens.

CASH HOGS CALLED STEADY/WEAKER... Cash hog bids are expected to be steady to weaker across the Midwest to open the week as most plants are thought to be bought ahead on slaughter needs. While packers are working with strong margins, market-ready hog supplies are expected to be plentiful enough to allow plants to fill slaughter needs without having to raise cash bids.

WEEKEND DEMAND NEWS... South Korea tendered to buy 70,000 MT of corn and 60,000 MT of feed wheat.

 

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