LIGHT AND CHOPPY OVERNIGHT... As of 6:30 a.m. CT, corn futures are 1 to 2 cents lower, soybeans are mixed with a slight upside bias and wheat futures are fractionally to 2 cents higher. The U.S. dollar index is holding near unchanged after two-sided trade overnight.
SPENDING THE MAIN FOCUS IN WASHINGTON… The House won’t exit Washington this week as had been previously scheduled with the focus squarely on spending for FY 2014, which begins Oct. 1. The Senate plans to take up a House-passed continuing resolution (CR/HJRes 59) that would keep the federal government in operation through Dec. 15 of this year but defund President Barack Obama's signature health care law. The Senate will reject the House approach, pass its own CR and send it to the House. The issue must be resolved by Oct. 1 or a government shutdown would result. The key issue at the end of the fiscal year funding debate will be the funding level for FY 2014. Republicans favor a sequestration-based figure, while Democratic leaders and the White House think that is too severe of a cut. The Senate will easily reject the House-passed CR, but then the Senate will approve their version with a likely higher funding level than the House-passed version. With time running out, the decision is whether or not the House passes the higher funding level of the Senate, or stick with the lower, sequestration-based funding. Observers saying a government shut down will be avoided predict a short-term CR at sequestration-based funding, with the same issues being pushed to later in the year. Meanwhile, the House will send the nutrition-only bill over to the Senate and that could prompt more action on the farm bill front for the House-Senate conference process which is expected to start in October. House conferees could be announced late this week or next week, according to some reports.
OCTOBER LIKELY FARM BILL TIME FRAME... A recent update on Red River Farm Network (RRFN) Online indicated that the House needs to pass a procedural motion to combine the farm bill and the just-passed nutrition bill before farm bill conferees can be named. "Once that is done, the legislation will go to the U.S. Senate," House Agriculture Committee Chairman Frank Lucas (R-Okla.) told RRFN. "They would have the option of accepting it. I think that’s not very likely to occur. They’ll reject, I would assume. At that point, they’ll ask for a conference. We’ll agree to a conference. They’ll appoint conferees. We’ll appoint conferees. So mechanically, because we’re not in session until Wednesday, it’s probably the following week before we can get the conferees appointed." The House and Senate both make cuts in food stamps, but the level of those cuts is far apart. Both chambers also take a different policy approach to the commodity title. "The Senate has a major focus on what many of us call shallow loss crop revenue," Lucas told RRFN, "The U.S. House version has passed and was sent to the Senate, for their consideration, a very strong choice proposal." The House plan includes a shallow loss option and "what we call a price protection option," Lucas said.
THINK-TANK RAISES CHINESE WHEAT IMPORT FORECAST... China is now expected to import 7.5 MMT of wheat in 2013-14 as unfavorable weather trimmed domestic production, according to China National Grains and Oils Information Center (CNGOIC). The state-run think-tank previously forecast Chinese 2013-14 wheat imports at 6.5 MMT. CNGOIC says China has already booked 3.7 MMT of wheat from the U.S., 2.2 MMT from Australia and 220,000 MT from France. USDA projects China will import 9.5 MMT of wheat in the 2013-14 marketing year.
UPBEAT CHINESE MANUFACTURING DATA... China's flash HSBC purchasing managers' index (PMI) came in at a six-month high of 51.2, up from a final reading of 50.1 in August. New export orders were a 10-month high of 50.8, the first time the sub-index has shown expansion (a reading above 50) in six months.
CATTLE FUTURES CALLED HIGHER... Last Friday's Cattle on Feed Report showed all three categories on the bullish side of the average pre-report guesses. In addition, cash cattle prices came in $1 higher in the Plains. The combination of the bullish report data and the higher cash cattle trade should support live cattle futures to start the week.
CASH HOGS CALLED STEADY/WEAKER... Hog supplies are tight, but packers aren't expected to raise cash hog bids to start the week as cutting margins are negative. Therefore, some plants are cutting back on kill hours instead of actively competing for tight supplies. Cash hog bids are expected to be steady to weaker across the Midwest today.
WEEKEND DEMAND NEWS... South Korea purchased 68,000 MT of U.S. or South American corn. Bangladesh passed on a tender to buy 50,000 MT of optional origin milling wheat; will re-issue a similar tender soon.