First Thing Today (VIP) -- September 30, 2013

September 30, 2013 01:06 AM


PRE-REPORT TRADE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading around 2 cents higher, soybeans are 3 to 7 cents lower and wheat futures are mixed with a slight upside bias. The U.S. dollar index is weaker this morning.

QUARTERLY GRAIN STOCKS, SMALL GRAINS SUMMARY OUT THIS MORNING... Traders are expecting Sept. 1 stocks to be 688 million bu. for corn, 126 million bu. for soybeans and 1.938 billion bu. for wheat. All three would be down sharply from year-ago levels. Sept. 1 corn and soybean stocks will be final 2012-13 ending stocks. The average pre-report guesses peg the all wheat crop at 2.121 billion bu., HRW at 792 million bu., SRW at 545 million bu. and other spring wheat at 509 million bushels.

POTENTIAL GOVERNMENT SHUTDOWN HEADS FOCUS OF WASHINGTON THIS WEEK... In Washington, today is "D-Day" for lawmakers to have worked out some kind of deal in order to keep the government operating come Tuesday, Oct. 1, the start of Fiscal Year 2014. The debt limit will also continue to percolate as a focus for lawmakers as they set their positions. Hearings are also on tap, including the focus on advanced biofuels in the Senate Ag Committee while a House Ag subcommittee looks at customer protections in the futures market as it relates to the Commodity Futures Trading Commission (CFTC). Friday is a big day for economic data as the monthly Employment Report will be released and it will be scrutinized for how it may or may not affect the odds for the Fed to taper its asset purchases.

POLITICAL IMPACT OF ANY GOVERNMENT SHUTDOWN... Only one-quarter of today’s House Republicans were in office during the winter of 1995-96, the last time the GOP led a government shutdown. Observers say that is why some newer Republicans do not believe their party would be blamed if a government shutdown occurs. Also, some veteran Republicans, in perhaps a historical rewrite, say the shutdowns of the past led to some GOP victories in legislation -- balanced budget and health care reform, even though it likely helped cost the party the presidency in 1996 and forced former House Speaker Newt Gingrich (R-Ga.) to depart.

EPA ALTERS TIMELINE FOR ISSUING INITIAL 2014 RFS VOLUME REQUIREMENTS... EPA quietly altered its website to note a change in unveiling its initial 2014 Renewable Fuel Standard (RFS) volume requirements. For months EPA had indicated the date would be "September 2013," but now it says "October." This, of course, would not be the first time, by far, that EPA has missed a deadline, in this case a self-announced deadline. By law, EPA was supposed to announce the 2013 RFS volume requirements in Nov. 2012, but the agency didn't get around to it until August 2013 -- late even by EPA standards.

CHINESE MANUFACTURING SECTOR TICKS UP... China's HSBC purchasing managers' index (PMI) inched up to 50.2 in September from 50.1 in August. Expansion in new export orders fueled the uptick in PMI. But that was below the flash HSBC PMI and also lower than expected.

CASH CATTLE TRADED HIGHER... Cash cattle traded as much as $4 higher in the Nebraska dressed market late Friday, though traders will have to wait until later this morning to get official cash cattle results. But given the higher cash prices again last week, traders have bullish hopes for this week's trade.

BEARISH H&P REPORT... Last Friday's Quarterly Hogs & Pigs Report showed nearly every category above the average pre-report trade guesses. As a result, lean hog futures are expected to open the week under heavy pressure. How traders respond to the initial wave of selling will determine if this puts a top in place for lean hog futures.

WEEKEND DEMAND NEWS... South Korea purchased 78,600 MT of U.S. wheat and 20,000 MT of Chinese non-GMO soybeans but passed on a tender to buy 110,000 MT of optional origin soymeal. Tunisia tendered to buy 75,000 MT of optional origin milling wheat and 50,000 MT of optional origin barley.


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