CORN AND BEANS WEAKER, WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are fractionally to 1 cent lower, soybeans are 7 to 9 cents lower, SRW wheat futures are 1 to 3 cents lower, HRW wheat futures are narrowly mixed and HRS wheat futures are fractionally to 2 cents higher. The U.S. dollar index is modestly firmer this morning.
BROKERAGE FIRM REVISES CROP ESTIMATES... INTL FC Stone now pegs the corn crop at 13.942 billion bu. on a national average yield of 156.4 bu. per acre and the soybean crop at 3.146 billion bu. on a national average yield of 41.2 bu. per acre. Last month, the brokerage firm pegged corn at 13.993 billion bu. (157 bu. per acre yield) and soybeans at 3.309 billion bu. (43 bu. per acre yield).
EPA SENDS PROPOSED RFS VOLUME REQUIREMENTS FOR 2014 TO OMB... EPA sent its proposed Renewable Fuel Standard (RFS) volume mandates to the White House Office of Management and Budget for review on Aug. 30. EPA is required to issue the final standard by Nov. 30, but the agency has missed that deadline in recent years. A 2007 law mandates 18.15 billion gallons of renewable fuels be blended into the fuel supply in 2014, up from the 16.55 billion gallons required in 2013. The 2014 requirement includes 3.75 billion gallons of advanced biofuels such as cellulosic ethanol and biodiesel. But in an August 15 announcement, EPA said in its 2013 standards that it is willing to reduce the 2014 blending mandate to avoid reaching the ethanol blend wall.
DEMAND FOR STATE-OWNED CHINESE SOYBEANS CONTINUES TO BUILD... China sold 417,448 MT of state-owned soybeans out of 503,253 MT put up for auction this week. Since starting to auction old soybean supplies in early August, demand has dramatically improved, but the beans continue to be purchased by inland crushers and food companies that only buy domestic beans, therefore limiting the impact to soy imports.
CHINESE CORN IMPORTS COULD RISE SHARPLY... China has a policy of 95% self-sufficiency for corn, wheat and rice production, but is struggling to increase production enough to keep up with rising demand. The head of rural development at China's Development and Research Center says the country could tweak its grain security strategy by lowering the self-sufficiency rate to 80% for corn while maintaining the 95% self-sufficiency rate for wheat and rice. If that were to happen, China could eventually see corn imports rise to 20 MMT to 30 MMT in years when there are shortfalls in production. This comes on the heels of comments from China's Ag Minister Han Changfu saying that Chinese corn imports would have to "gradually increase" in order to meet rising demand.
FAO RAISES CEREAL GRAIN OUTPUT FORECAST... The Food and Agriculture Organization (FAO) of the United Nations raised its 2013-14 global cereal grains output to 2.492 billion MT, up 0.5% from its previous forecast of 2.479 billion MT and 7.7% higher than 2012-13. The FAO world wheat production forecast was raised to 710 MMT from 704 MMT previously. Meanwhile, FAO's global food price index declined for a fourth consecutive month to an average of 201.8 in August from 205.9 in July due to lower cereal grains and edible oils prices.
RUSSIAN WHEAT EXPORTS MAY NOT BE AS STRONG AS FORECAST... Russia may export less wheat this year than officially forecast amid softer global demand and increased competition, according to the country's deputy ag minister. Russia's ag ministry forecasts 2013-14 wheat exports at 18 MMT to 20 MMT and production at 90 MMT.
USDA TO ANNOUNCE ANY AUGUST SUGAR LOAN FORFEITURES SOON; BEET PROCESSOR RECENTLY BORROWS $71.2 MILLION... A $71.2 million USDA loan was made recently to American Crystal Sugar Co., a sugar-beet processor in Clay County, Minnesota. USDA said it would announce later this week whether any defaults occurred on outstanding loans that were due at the end of August. USDA already has spent $53.4 million buying sugar this year as part of the U.S. sugar program. In March, USDA said its losses on the sugar-loan program likely would total $80 million, with sugar analysts signaling the government needs to remove another 300,000 to 500,000 tons of sugar from the market before October to prevent any loan defaults.
WEEKLY EXPORT SALES DELAYED... Due to Monday's holiday, weekly export sales data for the week ended Aug. 29 is delayed until Friday morning.
PORK MOVEMENT SURGES... Pork movement was strong for a second day in a row as packers moved 532.3 loads on Wednesday. Strong pork demand coming out of Labor Day suggests: 1) holiday clearance was very good, and/or 2) retailers are planning to actively feature pork this fall. Either way, strength in the pork market is overshadowing the seasonal buildup in market-ready hog supplies.
BEEF MOVEMENT ALSO RISES... Packers moved 230 loads of boxed beef Wednesday, which was a vast improvement from recent days, suggesting holiday clearance was strong enough to cause packers to actively refill meatcases. While post-holiday movement has improved, traders still have beef demand concerns.
OVERNIGHT DEMAND NEWS... Japan bought 116,350 MT of wheat in its weekly tender, including 67,923 MT of U.S. supplies. Japan also purchased 59,350 MT of feed wheat and 3,000 MT of feed barley. South Korea tendered to buy 140,000 MT of optional origin corn and 60,000 MT of optional origin feed wheat.