First Thing Today (VIP) -- September 24, 2013

September 24, 2013 01:11 AM
 

GOOD MORNING!

FIRM PRICE ACTION OVERNIGHT... As of 6:30 a.m. CT, corn futures are steady to 1 cent higher, soybeans are mostly 11 to 13 cents higher and wheat futures are fractionally to 2 cents higher. The U.S. dollar index is modestly firmer this morning.

TIMELINE ON CONTINUING RESOLUTION… Senate Majority Leader Harry Reid (D-Nev.) filed for cloture Monday on the motion to proceed to the House bill, a procedural move to limit debate that requires 60 votes and is due to occur Wednesday. The Senate is expected to remove the health care reform defunding provision via a party-line vote later this week and then return the amended legislation to the House. That might not occur until Sunday, the day before current funding expires. Once cloture is invoked on the House bill, all remaining germane amendments can be decided by a simple majority. Reid would likely block the offering of any amendments other than placeholders for things he wants taken out or included in the bill. Democrats, who control 54 votes in the chamber, will need at least six of the 46 Republicans to vote with them to invoke cloture on the motion and proceed to the bill itself.

CORN, SOYBEAN CCI RATINGS IMPROVE... 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 improved 2 points to 344, while the soybean crop firmed 1 point to 335. For corn, Iowa showed the most improvement, while there wasn't any notable movement in individual state soybean ratings.

CROP INSURANCE PAYOUTS NEAR $4 BILLION FOR 2013… Indemnities for 2013 crops are at $3.909 billion as of Sept. 23, with nearly 45% of the payouts for wheat ($1.757 bil.), according to Risk Management Agency (RMA) data. Corn indemnities stand at $750 million with another $564 million paid out to cotton producers and $249 million to soybean growers. Risk Protection (RP) policies remain the overwhelming choice for most growers -- 62% of net acres insured in 2012 were covered by an RP policy while payouts for those policies accounted for 82.6% of the $17.407 billion in indemnities.

RUSSIA TO START GRAIN INTERVENTION PURCHASES IN EARLY OCTOBER... Russia will begin purchases of grain for state stockpiles within the first 10 days of October and is looking to acquire 5 MMT to 6 MMT of grain from domestic farmers, especially from areas farthest away from export channels. The Russian government plans to buy 2 MMT to 3 MMT of grain buy the end of 2013. Private consulting firm SovEcon believes the Russian government's grain-buying plans are "quite overstated," saying the first 2 MMT to 3 MMT should be relatively easy to procure, but the last 3 MMT will be much harder as market prices are higher than the price the government will pay farmers.

CHINA SOVEREIGN WEALTH FUND TAKES 12.5% STAKE IN POTASH PRODUCER... China Investment Corporation is now the second largest shareholder in Uralkali, the Russian potash producer whose exit from one of the world's two potash cartels sparked fears of a price war and triggered a steep selloff in the soil nutrient's price earlier this year. The move by China's sovereign wealth fund to convert its bond holdings into a 12.5% equity stake "is part of [a] broader move to diversify its investments away from industrial commodities," according to the Financial Times.

BULLISH CASH CATTLE HOPES... The boxed beef market turned in a strong performance Monday as prices were 83 cents (Select) to $1.16 (Choice) higher and packers moved a decent 162 loads on the day. Combined with smaller showlist estimates except for in Texas, traders have bullish cash cattle hopes coming off the $1 higher trade last week.

VARIED DEMAND FOR CASH HOGS... Cash hog bids were stronger than expected at some locations yesterday, as packers are short-bought on slaughter needs and supplies are tight. But given the tight supplies, some plants are opting to reduce kill hours instead of actively bidding for hogs. Varied demand for cash hogs is likely to result in mixed cash bids today.

OVERNIGHT DEMAND NEWS... Taiwan purchased 92,350 MT of U.S. wheat. Tunisia bought 59,000 MT of optional origin durum wheat. Bangladesh tendered to buy 50,000 MT of optional origin wheat.

 

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