PRICE RECOVERY OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 2 to 8 cents higher, soybeans 15 to 23 cents higher, Chicago wheat 11 to 13 cents higher, Kansas City wheat 8 to 15 cents higher and Minneapolis wheat mostly around 14 cents higher. The U.S. dollar index is also firmer this morning.
OIL WORLD: CHINA WILL LIKELY HAVE TO CUT GOV'T SOY STOCKS TO CONTAIN FOOD PRICES... China may have to keep reducing government soybean reserves to keep food prices from rising, according to the editor of Oil World. He estimates Chinese government soybean stocks at 13 MMT and says that may have to be reduced by 4 MMT to 5 MMT by February as the country works to control food inflation. Meanwhile, a researcher with China's finance ministry says the government's need to guard against inflation is greater than the need for stimulus to combat slowing economic growth.
RUSSIA NARROWS GRAIN FORECAST, EXPORT OUTLOOK UNCHANGED... Russia's ag minister now sees grain production at 72 MMT to 73 MMT compared to a range of 70 MMT to 75 MMT previously. With 76% of the crop harvested, 63 MMT of grain have been secured. The exportable grain forecast remains unchanged at 10 MMT to 14 MMT. As of Sept. 1, Russian grain stocks were 34.6 MMT, down 21.1% from year-ago.
BRAZIL TO RAISE ETHANOL CONTENT IN GASOLINE... The Brazilian sugarcane growers association UNICA and the federal government have agreed to raise the anhydrous ethanol blend in gasoline back to 25% from the start of next year, according to UNICA interim President Antonio de Padua Rodrigues. Currently the blend stands at 20%. The blend is then to rise to between 25% and 30% from 2020, Padua said. The higher blend could raise ethanol consumption by up to 160 million liters of ethanol a month in 2013, or 1.9 billion liters a year. This would be equivalent to around 25 MMT of sugarcane or 3.25 MMT of sugar.
ARGENTINA SEEN UNVEILING VARIABLE RATE BIODIESEL EXPORT TAX... Just weeks after Argentina announced a hike in the export tax on biodiesel and lower domestic prices for the fuel, expectations are the government there will announce a sliding-scale export duty system for biodiesel. The daily La Nacion reported the new sliding-scale tax would have a maximum rate of 17% and comes after small producers complained the new tax announced in August could force many of them to shut down.
SOUTH KOREA TO BUILD CORN, WHEAT AND SOYBEAN STOCKS... South Korea plans to buy a combined 500,000 MT of corn, wheat and soybeans for government reserves in 2014 to minimize the impacts of a global price rise, according to the ag ministry. That would represent around 5% of South Korea's annual demand.
BOXED BEEF MARKET STAYS STRONG... Boxed beef prices were $1.22 (Choice) to $1.54 (Select) higher Tuesday and packers moved a solid 176 loads of product. While many traders feel a short-term top in the cash cattle market is close, continued strength in the product market would strengthen cash cattle expectations. For now, most cattle traders are anticipating cash prices near last week's $126 to $127 trade in the Plains.
SHORT-TERM LOW IN CASH HOG MARKET?... Steady to firmer cash hog bids at some Midwest locations Tuesday gave some traders hope a short-term low has been posted. But after a sharp drop in the pork cutout value yesterday, there are still some doubts. Cash hog bids are expected to be mixed today on varied packer demand.
OVERNIGHT DEMAND NEWS... South Korea purchased 28,700 MT of U.S. wheat and tendered for up to 110,000 MT of optional origin soymeal. Taiwan tendered for up to 60,000 MT of U.S. or South American soybeans. Japan purchased 51,890 MT of feed wheat and 36,555 MT of feed barley, and tendered for another 120,000 MT of feed wheat and 200,000 MT of feed barley.