SOYBEANS LEAD LOSSES OVERNIGHT... As of 6:30 a.m. CT, corn futures were trading mostly 3 to 5 cents lower, soybeans mostly 16 to 20 cents lower, Chicago wheat 9 to 11 cents lower, Kansas City wheat 10 to 11 cents lower and Minneapolis wheat 4 to 10 cents lower. The U.S. dollar index is modestly weaker this morning.
USDA'S VILSACK: WE'LL HAVE PLENTY OF CORN... USDA Secretary Tom Vilsack continues to downplay worries about the size of the U.S. corn crop against hefty demand. In remarks Monday, Vilsack said, "I don't think the United States of America is going to run out of corn." He added that it was important that folks "wait until the kernels are counted and the (soy) beans are counted to know the impact of the drought." Reports also said the ag chief downplayed the impact that this year's corn crop size could have on the decision EPA has to make on whether to grant waiver requests made by several U.S. governors on the ethanol mandates under the Renewable Fuels Standard. As for the new farm bill, Vilsack warned that milk prices could rise dramatically if there isn't a new farm bill put in place soon, referencing the situation where dairy program support prices would rise dramatically if so-called permanent law were to take effect. Vilsack said those higher prices would take effect in January unless there is action by Congress.
RUSSIA TO PROPOSE SELLING INTERVENTION WHEAT STOCKS... Russia hopes to sell 500,000 MT of government intervention wheat stocks by year-end in Siberia, the Urals and the Far Eastern Region in an attempt to cool domestic prices, according to Deputy Ag Minister Ilya Shestakov. The official proposal may be submitted to the Economic Ministry for approval sometime this week. Russia has 5 MMT of wheat intervention stocks.
UKRAINE WHEAT EXPORTS AT 65% OF TARGET... Ukraine has exported 2.6 MMT of wheat since July 1, or 65% of the 4 MMT maximum of wheat exports for 2012-13 the government and exporters agreed to in September, according to the Ukrainian Agrarian Confederation (UAC). Under terms of the agreement, the two sides must hold a new round of talks when exports top 80% of that maximum.
GOP SENATE LEADERS WARN OBAMA: DON'T TAP SPR... Top Senate Republicans on Monday urged President Barack Obama against drawing from the Strategic Petroleum Reserve (SPR) to lower gasoline prices, telling the president that such a release would harm national security absent a significant disruption to global supplies. "The [reserve] is America’s rainy-day fund," Minority Leader Mitch McConnell of Kentucky and other Republican leaders wrote in a letter dated Oct. 1. "We ask you to preserve it for a truly rainy day when an unanticipated emergency or severe supply disruption occurs."
ICAC WARNS CHINA COTTON IMPORTS WILL DROP SHARPLY... Chinese cotton imports for 2012-13 are expected to be 2.5 MMT, less than half of the record amount they bought in 2011-12, according to the International Cotton Advisory Committee (ICAC). "In 2011-12, the Chinese government supported both domestic and international prices via significant purchases of domestic and foreign cotton for the rebuilding of its national reserve," the group said. "While government support to Chinese national prices will continue in 2012-13, cotton imports will likely drop sharply." With this fall of Chinese cotton imports, ICAC said, "the outlook in the rest of the world is conducive to lower international prices in 2012-13."
SLUGGISH START FOR BOXED BEEF MARKET... Choice boxed beef prices were 21 cents higher Monday, but Select cuts dropped $1.23 and packers moved only 191 loads of product on the day. With packer cutting margins deep in the red and showlist numbers up slightly from week-ago, the boxed beef market must strengthen if there are hopes of stopping the slide in cash cattle prices.
REBOUND IN PORK CUTOUT CONTINUES... The pork cutout value was 41 cents higher Monday to continue the recent price recovery. But while packers are still cutting solidly in the black, demand for cash hogs wasn't quite as strong as anticipated Monday. Cash hog bids are expected to be mostly steady across Midwest again today.
OVERNIGHT DEMAND NEWS... Japan is seeking 120,778 MT of U.S, Canadian and Australian wheat in its weekly tender.