First Thing Today (VIP) -- September 11, 2013

September 11, 2013 01:08 AM


MOSTLY FIRMER OVERNIGHT... As of 6:30 a.m. CT, corn futures are fractionally to 2 cents higher in most contracts, soybeans are mostly 4 to 6 cents higher and wheat futures are 1 to 3 cents higher. The U.S. dollar index is anchored near unchanged this morning.

TAIWAN SIGNS AGREEMENTS TO BUY U.S. CORN AND DDGS... A Taiwanese trade delegation on Tuesday signed non-binding letters of intent to buy 5 MMT of U.S. corn and 500,000 MT of U.S. distillers dried grains (DDGs) over the next two years. The estimated value of the trade deals is $4 billion, according to the U.S. Grains Council.

CHINA FORECAST TO HAVE RECORD CORN PRODUCTION... China's corn crop is forecast to be record-large at 215 MMT, up 4.6% from year-ago, according to China National Grain and Oils Information Center (CNGOIC). Chinese total grain production is also expected to be record-large at 589.57 MMT. The state-run think-tank lowered its 2013-14 corn consumption forecast to 199.79 MMT, down 2.84 MMT from its previous forecast, amid what it called slowing economic conditions. Chinese 2013-14 corn imports were left at 5.5 MMT, which is below USDA's August forecast of 7 MMT. Meanwhile, CNGOIC forecasts Chinese soybean production at 12.5 MMT, down 4.2% from year-ago.

HOUSE FOOD STAMP FUNDING BILL LIKELY ON HOUSE FLOOR NEXT WEEK... House Republican leaders are expected to try to move legislation next week that would cut the nation’s largest food aid program by $40 billion over a decade. House Ag Chairman Frank Lucas (R-Okla.) said the Republican whip operation could begin to lay the groundwork this week for floor consideration on or after Sept. 16. Republicans want to limit the types of low-income benefits that would automatically qualify recipients for the food stamp program. Passing a nutrition bill this month could enable the House to go to conference with the Senate, which proposed $4 billion in reductions to the program in its farm bill (S 954).

2013 CROP INSURANCE PAYOUTS TOP $3.2 BILLION…U.S. crop insurance indemnities for 2013 have reached $3.204 billion, still far shy of the record payouts of $17.413 billion made for 2012 crops as of Sept. 9, according to Risk Management Agency (RMA) data. Wheat remains the largest payout for 2013 so far, with $1.537 billion -- nearly 48% of the 2013 indemnities. Corn continues to increase, reaching $520 million while cotton is at $543 million and $175 million has been paid out to soybean producers. Producers continue to overwhelmingly choose something beyond catastrophic coverage, with most opting for some type of additional coverage such as yield protection, risk protection or actual production history coverage -- 93.8% of net acres insured in 2012 were covered by that type of policy while 94.6% of net acres insured for 2013 are covered by some type of additional coverage.

BEEF PRICES FALL AGAIN AND MOVEMENT SLOWS... Boxed beef movement slowed to 188 loads Tuesday despite a 60-cent drop in Choice cuts and a $1.12 drop in Select values. The sluggish boxed beef trade is not encouraging for feedlots seeking higher cash cattle prices this week, especially with showlist supplies up from week-ago.

PORK PRODUCT MARKET REMAINS STRONG... The pork cutout value firmed 45 cents and packers moved a strong 407.3 loads of product Tuesday. With the pork product market continuing to show strength, packers have incentive to keep cash hog bids steady to firmer as they work to keep kill lines as full as possible.

OVERNIGHT DEMAND NEWS... South Korea purchased 23,000 MT of U.S. wheat.


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