First Thing Today (VIP) -- September 20, 2013

September 20, 2013 01:13 AM


PRICE PRESSURE OVERNIGHT... As of 6:30 a.m. CT, corn futures are 1 to 2 cents lower, soybeans are 11 to 13 cents lower and wheat futures are mostly 1 to 3 cents lower. Beans are being pressured by rains that have swept across the Corn Belt this week and spread unwinding with corn. The U.S. dollar index is holding near unchanged this morning.

HOUSE CLEARS FOOD STAMP FUNDING CUT BILL, PAVING WAY FOR EVENTUAL FARM BILL CONFERENCE... House conservatives scored a victory Thursday, approving the nutrition bill (HR 3102) that would cut food stamp funding $39 billion over ten years on a 217-210 vote, brushing aside attempts by Democrats to woo enough Republicans with large food aid caseloads in their districts or anxiety about the impact on veterans. Only fifteen Republicans opposed the reductions, with no Democrats voting for the measure. The passage will lead to an eventual farm bill conference. House Speaker John Boehner (R-Ohio) said before the vote that the House would go to conference on the broader farm bill "as soon as we can" after passage. Formal negotiations on the farm bill likely won't begin before October. The House first needs to merge the nutrition bill with the agriculture-only farm bill (HR 2642) that passed in July, and that is expected to come via a rule that the House could consider next week. Upon clearing that rule, the merged bill would be sent to the Senate, where it will be easily rejected, but the process of appointing conferees would begin again. While the Senate has already appointed conferees, Boehner noted that the Senate would have to repeat the process. This makes calls by at least one commodity group and some Democratic members of House to name farm bill conferees premature at best.

HOUSE VOTES TODAY ON SHORT-TERM BILL TO FUND GOVERNMENT... The House today will vote on a temporary funding bill. The Senate will take up the measure next week. Both chambers must pass the bill before Oct. 1 to avoid a government shutdown. The continuing resolution (CR) would fund government agencies through Dec. 15 at an annual rate of $986.3 billion. Of note, the coming House CR defunds the Affordable Care Act even as Senate Democratic leaders insisted they would not support a measure that strips funding for the health care law. The renewed battle at least raises the possibility of an Oct. 1 government shutdown looming. The CR would prioritize Treasury Department payments should it run short of money to pay all of the government's bills. The federal government is expected to reach the current $16.7 trillion debt ceiling by mid-October. Should it reach his desk, President Barack Obama would veto a CR with a provision to strip funding for the health care law, the Office of Management and Budget said yesterday.

OBAMA EXPRESSES OPTIMISM FOR TRADE PROMOTION AUTHORITY... President Obama expressed hope that Congress will show bipartisan support for trade promotion authority (TPA), the authority for the president to negotiate and submit trade agreements to Congress for a clean up-or-down vote without amendments. That authority lapsed in 2007 and has yet to be renewed. In July, Obama asked Congress to renew TPA, but the Senate Finance Committee's top Republican Sen. Orrin Hatch (R-Utah) said the administration's plan to couple TPA with trade adjustment assistance (TAA) for U.S. workers was problematic. "The sticking point is always TAA and whether that contains language that makes it more difficult for us or for our trading partners. Some of our trading partners don't want to be stuck with U.S. labor law," Hatch said.

CATTLE ON FEED REPORT OUT THIS AFTERNOON... USDA's monthly Cattle on Feed Report is widely expected to reflect a continued tightening of feedlot supplies. The average pre-report guesses expect On Feed at 93.5%, Placements at 91.6% and Marketings at 95.5% of year-ago levels.

POST-REPORT CASH CATTLE TRADE EXPECTED... With bids and asking prices still far apart in the Plains, active cash cattle trade is not expected to get started until after this afternoon's Cattle on Feed Report. Unless the report is unexpectedly bearish, traders are anticipating steady to firmer cash prices compared with last week's $123 trade.

PORK MARGINS TIGHTEN... Packers have seen cutting margins move from solidly in the black at the end of last week to near breakeven, with some plants now cutting in the red. As a result, packer demand for cash hogs has softened in some locations, though supplies remain tight in other areas. Cash hog bids are expected to be mixed today, with most locations likely to see steady to slightly firmer prices.

OVERNIGHT DEMAND NEWS... Exporters reported no tenders or purchases.


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