First Thing Today (VIP) -- October 2, 2013

October 2, 2013 01:36 AM


POSITION EVENING OVERNIGHT... Corn futures saw mild followthrough selling overnight, but most contracts have moved off their lows to post losses of 1 to 2 cents. Soybeans, on the other hand, saw some light short-covering interest overnight with nearbys hitting new session highs of 3 to 6 cents as of 6:30 a.m. CT. Wheat futures were choppy overnight, with the winter wheat markets favoring the upside. The U.S. dollar index is chopping around unchanged while crude oil is posting slight losses after trading in a narrow range overnight.

EIA TO RELEASE WEEKLY SUPPLY DATA... The U.S. Energy Information Agency, even with the partial government shutdown, will still be able to continue operations utilizing available appropriations balances through approximately Oct. 11, allowing the publication of weekly petroleum supply data on Wednesday. The action is covered under a written Order entitled "Plan for Operating in the Event of a Lapse in Appropriations," issued Sept. 30. The EIA said that it was premature to speculate on EIA operations in the event that a Continuing Resolution is not enacted by the end of next week.

CONGRESSIONAL HEARINGS IMPACTED BY GOV'T SHUTDOWN... The Senate Ag Committee postponed an Oct. 3 hearing on advanced biofuels, which was to feature testimony from USDA Secretary Tom Vilsack. The Senate Energy and Natural Resources Committee has no hearings in the coming days, but it announced that its front office would be closed pending approval of a funding bill to reopen the government. In the House, the shutdown forced postponement of an Oct. 2 hearing by the Energy and Commerce Subcommittee on Energy and Power on a bill to expedite permitting for major cross-border energy infrastructure projects — such as the Keystone XL pipeline. The House Science Committee's environment subcommittee also postponed an Oct. 1 hearing on the National Integrated Drought Information System, an interagency drought monitoring program. The Joint Economic Committee also canceled their hearing set for today on the U.S. economic situation.

FARM BILL UPDATE: SENATE APPOINTS CONFEREES... The Senate requested conference with the House to work out the differences on the Federal Agriculture Reform and Risk Management Act of 2013 (FARM Act) yesterday and the chamber appointed conferees with a ratio of 7:5 on the part of the Senate. Last week, the House Rules Committee approved a provision combining the House-passed nutrition bill with the ag-only farm bill so they can be considered together in conference. The chamber has not yet appointed conferees. Learn more.

CROP INSURANCE PAYOUTS PASS $4.2 BILLION FOR 2013 CROPS... Indemnities for 2013 crops reached $4.226 billion as of Sept. 30, according to Risk Management Agency (RMA) data, with wheat remaining the largest level of payouts at $1.841 billion. The 2013 tally, of course, still far lags the 2012 record level of $17.411 billion. However, at this point last year, 2012 payouts only had reached $1.988 billion on their way to the eventual record-setting level. For other 2013 payouts, corn has reached $869 million, cotton $611 million and soybeans $265 million.

FC STONE RAISES CORN, BEAN CROP FORECASTS... Brokerage firm INTL FC Stone raised its corn crop estimate to 14.150 billion bu. on a national average yield of 158.7 bu. per acre. The firm upped its soybean crop forecast to 3.163 billion bu. on a national average yield of 41.4 bu. per acre. Last month, FC Stone forecast the corn crop at 13.942 billion bu. (156.4 bu. yield) and the bean crop at 3.146 billion bu. (41.2 bu. yield).

SAMPLES STILL SHOW LOWER-QUALITY CANADIAN SPRING WHEAT... Updated data regarding the quality of spring wheat in Western Canada still shows crop has lower average protein levels than year-ago, according to the Canadian Grain Commission. So far, the highest average protein readings have been found in northwest Manitoba at 13.5% while the lowest has been in southwest Saskatchewan at 11.9%. The first durum quality data this year also showed samples with average protein levels below year-ago at 11.5%, but this data only includes samples from southwest Saskatchewan.

KAZAKHSTAN'S GRAIN IMPORTS BY RAIL SLIP FROM YEAR-AGO... Kazakhstan's ag ministry says its exports of grain and flour in grain equivalent by rail has fallen to 1.59 MMT over the July 1 to Oct. 1 period, which compares to 2.06 MMT over this span last year. (Most exports in the country are transported via rail.) But for the month of September the country's grain exports improved to 138,100 MT, up 10,300 MT from year-ago. Kazakhstan's ag ministry expects grain exports of 9 MMT to 9.5 MMT for the 2013-14 marketing year.

UNCERTAIN CASH CATTLE PROSPECTS... Cattle futures moved off their lows into the close yesterday, with the front-month contract finishing the day at around a $1 premium to the bulk of cash action at $126 on the Southern Plains, which could also limit additional profit-taking. Lacking daily boxed beef market updates, traders have less data with which to form cash trade expectations this week. Supplies are tighter this week, but packers have seen cutting margins dip deep into the red. There is also uncertainty as to the economic impact of the government shutdown and, in turn, its impact on red meat demand.

HOGS CONTINUE THEIR SLIDE... The absence of slaughter and wholesale meat price data further clouds the outlook for the lean hog market after last Friday's Quarterly Hogs & Pigs Report delivered a bearish surprise to many. As a result, hog futures appear to have put in a top and will likely trend lower over the near-term. Packers are thought to be well supplied on near-term needs, which kept bids steady to $1 lower yesterday, despite wide packer profit margins. More of the same is expected today.

OVERNIGHT DEMAND NEWS... South Korea canceled its tender to import 140,000 MT of optional origin corn. But the country did buy 44,000 MT of soymeal from the U.S. and India. Japan's ag ministry said it will import 55,640 MT of feed wheat via a simultaneous buy and sell auction.

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