First Thing Today (VIP) -- September 27, 2013

September 27, 2013 01:36 AM


CORN AND WHEAT MIXED, BEANS FIRMER OVERNIGHT... As of 6:30 a.m. CT, corn and wheat futures are narrowly mixed, while soybeans are 4 to 5 cents higher. The U.S. dollar index is under pressure this morning.

HOUSE PANEL APPROVES RULE COMBINING FARM, NUTRITION BILLS... The House Rules Committee Thursday evening approved, 9-3, a provision combining the House-passed nutrition bill (HR 3102) with the agriculture-only farm bill (HR 2642) so they can be considered together in conference. The merger provision was included in a rule that would allow the House Republican leadership to consider a continuing resolution or debt limit bill to the floor. A separate motion will be needed to appoint House conferees for the farm bill.

LESS THAN 2 MILLION ACRES TO EXIT CRP AS OF SEPT. 30... While contracts on 3.3 million acres of land in the Conservation Reserve Program (CRP) will expire Sept. 30, new contracts on more than 1.3 million acres will keep the number of acres exiting the program under 2 million acres, according to a review of CRP data. And when new enrollments via signup 45 held earlier this year are factored in, that will limit the net reduction in CRP acres to just over 1.6 million acres. At the end of August, 26.876 million acres were in the CRP, including 21.395 million acres enrolled via general signups and another 5.481 million acres enrolled via continuous signup efforts. This will put the total acres in the program very close to the proposed maximum CRP acre levels in the House and Senate versions of the farm bill.

CHINA LEAVES GRAIN, COTTON IMPORT QUOTAS UNCHANGED... Chinese import quotas for corn (7.2 MMT), wheat (9.6 MMT) and cotton (894,000 MT) will be the same for 2014 as they were this year, according to the National Development and Reform Commission. But the Chinese government is allocating a larger share of the quotas to state-owned firms, as they try to rebuild state reserves.

UKRAINE WINTER WHEAT AREA COULD DROP SHARPLY... Ukraine could see winter wheat seedings for the 2014 crop fall by 2 million hectares (4.9 million acres), or roughly 30%, as excessive wetness across much of the country is delaying planting efforts, according to the head of the Ukrainian Agrarian Confederation grain lobby. Meanwhile, the head of the Russian Grain Union says Russia's 2013 grain crop will fall short of the ag ministry's target of 90 MMT and is likely to be "89 million or 87 million or 85 million tonnes."

H&P REPORT OUT THIS AFTERNOON... USDA's Quarterly Hogs & Pigs Report is expected to show the U.S. hog herd down from year-ago, but that producers are holding back more gilts for breeding with intentions of expanding farrowings this fall and winter. Based on the average pre-report guesses in a Dow Jones newswire survey, All hogs and pigs are seen at 98.6%, Kept for Breeding at 101.5% and Kept for Marketing at 98.3% of year-ago. Fall and winter farrowing intentions are seen up around 1% from year-ago.

COURT DISMISSES 'PORK, THE OTHER WHITE MEAT' LAWSUIT... A U.S. District Court has dismissed a lawsuit filed by the Humane Society of the United States (HSUS) over the National Pork Board's (NPB) purchase of the "Pork, The Other White Meat" trademark from the National Pork Producers Council (NPPC). HSUS, along with a sole Iowa pork producer and the Iowa Citizens for Community Improvement, sued USDA and Secretary Tom Vilsack over approval of the purchase. HSUS argued the sale and annual payments were unlawful since NPB is prohibited from using checkoff dollars to influence legislation. The ruling stated the plaintiffs lacked standing and that no injury was suffered.

WTO AGREES TO SET UP PANEL ON COOL RULING DECISION... Members of the World Trade Organization (WTO) agreed to set up a dispute panel to rule whether the U.S. complied with a previous WTO ruling against its country-of-origin labeling (COOL) rules for meat products. Meeting in Geneva, the WTO's Dispute Settlement Body (DSB) accepted a second request from Canada and Mexico for the establishment of the panel to rule on their claims that amendments to the COOL rules adopted by USDA May 23 failed to correct the faults outlined by the original panel. The amended COOL measure "only serves to deepen the discrimination found in the original labeling requirements," Canada told the DSB, while Mexico said the new rules deepen distortions to cross-border trade in meat and "unnecessarily increase" costs to operators in the sector. The U.S. countered that the new rules "fully meet the concerns" outlined in the earlier WTO ruling by "ensuring that consumers are provided with detailed and accurate information on origin." The compliance panel is normally required to issue its ruling within 90 days, but it could slip into a 2015 decision. The panelists are expected to be the same three trade experts who ruled on the original COOL measure.

STILL WAITING ON CASH CATTLE TRADE... Cash cattle trade has been slow to develop in the Plains again this week. Traders are looking for steady to firmer cash cattle prices compared with last week's $124 trade, but that's already built into the market, which is likely to limit buying interest to close out the week.

WHOLESALE PORK MARKET CONTINUES TO STRENGTHEN... The pork cutout value gained 81 cents Thursday amid strong gains in loins and bellies. But with the cutout value above $100 and the seasonal tendency for price pressure into the end of the year, traders are keeping a close watch on the product market for signs of a top.

OVERNIGHT DEMAND NEWS... One South Korean feedmaker purchased 55,000 MT of optional origin corn, while another one passed on a similar tender and yet another South Korean feedmaker issued a tender to buy 280,000 MT of optional origin corn.


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