CORN SLIGHTLY FIRMER, BEANS AND WHEAT LOWER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading around 1 cent higher, soybeans are mostly 2 to 5 cents lower and wheat futures are fractionally to 2 cents lower. The U.S. dollar index is firmer this morning.
CHINA BUYS U.S. CORN... A private Chinese firm purchased 420,000 MT (7 cargoes) of U.S. corn last week to take advantage of cheaper U.S. prices, an official with the unspecified company who bought the corn told Reuters. The official says the price it paid for the U.S. corn is around 20% cheaper than domestic corn prices. The corn is for delivery next year and therefore, the importer can use low-tariff import quotas for 2014. This year's import quotas issued to private firms have been fully exhausted.
NASS OCTOBER CROP REPORT A QUESTION MARK… Release of the October Crop Production Report is becoming more of a question mark given the ongoing partial government shutdown that halted the data-gathering process involved with generating the estimates, according to sources. Contacts familiar with the estimating procedures used by the National Ag Statistics Service (NASS) say it now may be a question on whether the October production update does indeed get issued. The objective yield portion for the October report was not completed as of the start of the government shutdown on Oct. 1, which one source said prompted the agency to instruct enumerators to "cease and desist" in their data-gathering efforts. Those efforts were to have run through Oct. 1 or 2 for the objective yield data and Oct. 7 for the farmer survey portion. "It’s not clear how many samples may be sitting at the USDA lab for processing," a source familiar with the data-gathering process noted. "And then there’s the matter of the farmer survey portion and how far along that got before the shutdown." And some are already raising questions on the November crop report as harvest of U.S. corn and soybeans continues. Typically, NASS enumerators monitor the plots they sample for the estimates and when the grower is harvesting, they will take their final samples. But with the shutdown, there’s a question of whether the "final" harvest sample will have been gathered. This could also potentially raise questions about the Supply & Demand Report as the NASS production estimates are used to provide U.S. production figures for a host of crops. For more on how the shutdown could be impacting USDA reports, click here.
WINTER WHEAT SEEDING TO RESUME IN SOUTHERN RUSSIA... Recent heavy rains have stopped and the forecast is drier through southern Russia, which will allow winter wheat seeding to advance in the Southern Federal District and the North-Caucasus Federal District, two areas that supply wheat for exports out of the Black Sea. An official with the state agricultural weather forecasting service says the drier forecast should allow producers to finish winter grain seeding in these two regions. However, the Central and Volga regions will not be able to complete plantings due to excessive rains. Winter grains have been seeded on 9.1 million hectares, or 56% of the previously planned area as of Oct. 8, according to the Russian ag ministry. The ministry forecasts Russia will sow about 13 million hectares of winter grains, instead of the 16 million hectares previously planned.
OBAMA TO ANNOUNCE YELLEN AS PICK FOR FED CHIEF… President Obama today is expected to announce he intends to nominate current Fed Vice Chair Janet Yellen as the next Chair of the Federal Reserve. The nomination has been expected since former Treasury Secretary Larry Summers pulled out of consideration for the post. Markets overseas have greeted the news positively as it raises expectations there will be little shift in Fed policies as Yellen worked with current Fed Chairman Ben Bernanke to develop and implement the current spate of policies the Fed has used to try and spark the U.S. economy. Many lawmakers expressed support for a Yellen nomination to head the Fed so her confirmation is not expected to be controversial. Summers and Yellen had been viewed as the top contenders for the post and when Summers exited, the White House indicated no new candidates were under consideration, shifting expectations to Yellen getting the nod. While Bernanke's term as Fed chairman expires at the end of January 2014, his term as a Fed governor goes through January 2020.
U.S. EXPECTED TO WITHHOLD AID TO EGYPT... The U.S. is leaning toward continuing to withhold most military aid to Egypt, aside from funds to promote counter-terrorism, an unnamed U.S. government official told Reuters. Another government source says a decision on the aid was likely to be made public by the end of the week.
SOUTH KOREA SUSPENDS SOME IMPORTS OF U.S. BEEF... South Korea has halted U.S. beef imports from a Swift Beef Co. plant in Colorado, a unit of JBS USA, after traces of zilpaterol (Zilmax) were found in a 22 MT shipment from the company in late September, according to South Korea's Ministry of Food and Drug Safety. A ministry official says the country will sample all other beef shipments from the company and will randomly sample other U.S. beef imports.
CME TO MONITOR OCT. HOGS FOR PRICE MANIPULATION... CME Group announced yesterday it will closely monitor trading in October lean hog futures next week ahead of the contract's expiration to prevent price manipulation under the new settlement procedures announced Monday by the exchange. CME Group will use a volume-weighted price settlement procedure in the absence of USDA data needed to calculate the CME lean hog index, which is normally used for settlement at expiration, but industry sources are skeptical of the new price settlement procedure.
BULLISH CASH CATTLE HOPES BUILT INTO FUTURES... Bullish cash cattle hopes supported nearby live cattle futures on Tuesday. But with the October contract at more than a $2 premium to the bulk of last week's cash cattle trade, firmer cash cattle prices are already factored into the market. That could limit buying interest in futures until cash cattle trade is closer, which won't likely be until late in the week.
CASH HOGS TO REMAIN STEADY/WEAKER... Packer demand for hogs has been a little stronger than expected the first two days this week, which has limited pressure on cash hog bids. But with market-ready hog supplies gradually increasing and the pork cutout value 98 cents weaker Tuesday according to private firm Urner Barry, cash hog bids will remain steady to weaker across the Midwest.
OVERNIGHT DEMAND NEWS... Exporters reported no tenders or purchases.