CORN AND BEANS WEAKER, WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are steady to 2 cents lower, soybeans are 9 to 12 cents lower and wheat futures are narrowly mixed. The U.S. dollar is firmer this morning.
CORN AND BEAN CCI RATINGS CONTINUE TO DROP... When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the corn crop dropped 4 points to 342 while the soybean crop declined 6 points to 336. Corn and soybean crop ratings were lower in many of the key Corn Belt states, with the top production state of Iowa leading the crop deterioration.
OPPOSITION CONTINUES TO EXTENDING 2008 FARM BILL... Repeating their past position, Senate Ag Chairwoman Debbie Stabenow (D-Mich.) and the Obama administration on Monday reaffirmed their opposition to an extension of the 2008 Farm Bill, saying any extension or talk of one would do nothing more than take the pressure off Congress to finish a new five-year farm bill. The same comments were used last year ahead of a one-year extension. Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) backed Stabenow in her call for the House to name farm bill conferees soon rather than wait until Majority Leader Eric Cantor (R-Va.) brings a revised nutrition title to the floor for a vote. But a Cantor aide said it is likely the nutrition bill could come to the floor next week. The issue is expected to be discussed at the GOP conference meeting today. No final decision has been made, the aide said. The call for naming House conferees is primarily political and a push to pressure House GOP officials to act, as GOP leaders have made clear no conferees would be named until the fate of a separate food stamp funding measure is known. Meanwhile, House Ag Chairman Frank Lucas (R-Okla.) on Monday in Oklahoma told us he does not even like to talk about any extension because the focus should be on completing a new farm bill. "We now have a legislative vehicle that we will bring to conference with the Senate," Lucas said. With only nine House legislative days in September, Lucas was asked by whether he thought House GOP leaders would increase the number of days the House is in sessions. "If you do not, that would mean you have to do something," Lucas responded.
TAIWAN GROUP TO SIGN CORN, SOYBEAN DEALS IN IOWA THURSDAY... The ninth mission of the Taiwan Agricultural Trade Goodwill Mission is on this week and a ceremony Thursday in Des Moines, Iowa, is expected to see the signing of deals for the purchase U.S. corn and soybeans. The Taiwan group is expected to ink deals this week for a total of 351.5 million to 358.5 million bu. of grain over the course of 2014 and 2015 valued at up to $4 billion, according to the Iowa Economic Development Authority. The Iowa Corn Growers Association and Iowa Soybean Association will be on hand for the Thursday event along with Iowa Lt. Governor Kim Reynolds. In addition to Iowa, the delegation will be visiting Washington, DC, Minnesota, Michigan, North Dakota, Montana and Idaho.
CHINESE MILLS TURNING TO U.S. SORGHUM INSTEAD OF CORN... Private Chinese feed mills are purchasing U.S. sorghum instead of corn as they have used up their corn import quota of 2.88 MMT for the 2013 calendar year. As a substitute, the feed mills have already bought around 800,000 MT of sorghum for 2013-14 and those purchases are expected to top 1 MMT. Chinese feed mills are subject to a 65% tax on corn imports above the quota, whereas sorghum does not have an import quota and is around 20% cheaper than Chinese corn.
BRAZIL EXPANDS DUTY-FREE WHEAT IMPORTS... Brazil has increased duty-free wheat imports by 400,000 MT through the end of November, which pushes the quota to 2.7 MMT as recent frost/freeze events have hurt the Brazilian wheat crop. Brazilian mills had already imported the previous duty-free allotment of 2.3 MMT of wheat.
AUSTRALIA CUTS WHEAT CROP FORECAST... Australia is expected to produce a wheat crop of 24.467 MMT in 2013-14, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), which is down from its previous forecast of 25.399 MMT but up from 22.1 MMT in 2012-13. The lower forecast came amid dry weather in parts of New South Wales, Queensland and northern areas of Western Australia. ABARES now expects Australia to export 19.5 MMT of wheat in 2013-14, down from its previous forecast of 19.6 MMT and lower than exports of 19.8 MMT in 2012-13.
UKRAINE EXPECTED TO HARVEST RECORD GRAIN CROP... UkrAgroConsult expects Ukraine to harvest a record grain crop of 56.06 MMT this year as the wheat and corn crops are stronger than previously anticipated. Previously, the private consulting firm had forecast the Ukraine grain crop at 53.8 MMT. Ukraine's ag ministry put its grain forecast at a record 58 MMT.
MORE UPBEAT CHINESE ECONOMIC DATA... China's factory output rose 10.4% over year-ago last month, which was up from a 9.7% increase in July and the highest growth rate since March 2012. Meanwhile, retail sales rose a greater-than-expected 13.4% in August.
PRICE DROP SPURS MORE BEEF MOVEMENT... Packers moved 202 loads of boxed beef Monday, but it took a 90-cent decline in Choice beef and a $1.33 drop in Select cuts to encourage the solid movement. With showlist estimates higher than week-ago, the boxed beef market must likely show strength to encourage packers to raise cash cattle bids.
PORK MARKET STAYS STRONG... The pork cutout value was 32 cents higher Monday and packers moved a solid 309.3 loads of product on the day. With the pork market remaining strong and extreme heat curbing weight gains and hog movement, the cash hog market is expected to remain steady to firmer across the Midwest.
OVERNIGHT DEMAND NEWS... Egypt tendered to buy optional origin wheat with results expected later this morning. Oman purchased 30,000 MT of Russian wheat. Japan is seeking to buy 113,572 MT of wheat in its weekly tender.