First Thing Today (VIP) -- September 26, 2012

September 26, 2012 01:11 AM


PRICE PRESSURE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 6 to 9 cents lower, soybeans 17 to 23 cents lower, Chicago wheat 10 to 12 cents lower, Kansas City wheat 8 to 11 cents lower and Minneapolis wheat 4 to 6 cents lower. The U.S. dollar index is higher this morning amid renewed euro-zone concerns.

USDA READYING 2012 DIRECT PAYMENTS... USDA’s Farm Service Agency will begin processing direct payments for 2012 crops around Oct. 5 with that date also set for the agency to process 2011-crop Average Crop Revenue Election (ACRE) payments. ACRE payments are expected for 2011 crops of barley, corn, dry peas, grain sorghum, lentils, oats, peanuts, soybeans and wheat.

INDIANA PETITIONS TO BLEND AFLATOXIN CORN... Indiana is awaiting word from the Food and Drug Administration (FDA) on a petition to allow grain handlers in the state to blend aflatoxin corn with "clean" corn. FDA has already approved a waiver for the blending of aflatoxin corn in Iowa, Illinois and Nebraska.

TRADERS PETITION FOR SHORTER GRAIN TRADING HOURS... Grain traders at the Chicago Board of Trade circulated a petition Tuesday asking CME Group to shorten its trading hours for grain and soy futures. In May, CME Group expanded grain trading hours to 21 hours per day, a move traders say has spread out trading volume, resulting in reduced liquidity and increased price volatility.

U.S., TAIWAN TO RESTART OF TIFA TALKS... The U.S. will send a team of officials to Taiwan next month as the two sides resume talks under the Trade and Investment Framework Agreement (TIFA) in response to Taiwan’s actions to establish a tolerance level for the presence of ractopamine in U.S. beef shipments to the country. As for the beef shipments, the U.S. Meat Export Federation expects that exports of U.S. beef to Taiwan will reach two-thirds of their normal level by the end of this year and hit the level seen prior to restrictions being placed on U.S. shipments by the end of 2013. That would put shipments at 38,000 MT by the end of 2013 after they had fallen to 25,000 MT in the wake of the restrictions. Under the legislation approved by Taiwan, the government established a tolerance level for ractopamine in U.S. beef of 10 parts per billion (ppb). Also, the origin of beef imported into Taiwan must be labeled on the beef. The U.S. had put the TIFA talks on hold since 2007 due to Taiwan’s beef trade restrictions, but the actions this year have warmed relations between the two sides.

FUTURES POINT CASH CATTLE LOWER... The sharp drop in cattle futures Tuesday strongly suggests cash cattle prices will likely come in lower than last week's $126 trade in the Plains. If there's active followthrough selling today, it could encourage feedlots to move cattle sooner and at a lower price than they were anticipating to start the week.

PORK CUTOUT STRENGTHENS AGAIN... The pork cutout value was 46 cents higher Tuesday -- the fourth consecutive day of price gains. But just as importantly, packers moved a strong 118.08 loads of product. The firming prices and rising demand suggest the pork product market is bottoming. That will be enough to keep cash hog bids steady to firmer today.

OVERNIGHT DEMAND NEWS... Egypt tendered for optional origin wheat. Japan bought 62,970 MT of feed wheat and 39,130 MT of feed barley, and tendered for another 120,000 MT of feed wheat and 200,000 MT of feed barley.


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