What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are fractionally to 2 cents higher through the September contract and wheat futures are mixed with a slight downside bias. Cattle and hog futures are expected to open slightly firmer this morning.
* China rejects more U.S. DDGs. China has reportedly rejected more U.S. dried distillers grain (DDG) shipments at the northern port of Qingdao due to the presence of MIR 162 (Syngenta's Agrisure Viptera), though the quantity is unspecified and quarantine authorities have yet to confirm the rejections. These are the first DDG rejections of the new year after China turned back around 2,000 MT of U.S. DDGs in December. China was expected to relax inspections of U.S. DDG shipments, though trade sources tell Reuters the checks remain tight.
The long and short of it: The corn and DDG rejections continue to hang over the corn market like a wet blanket. Other Asian countries are taking the rejected corn shipments, but it's harder to find a new home for the DDGs, meaning export activity could slow again if China doesn't relax its inspections of DDGs.
* China taking cautious approach on GMO commercialization. China doesn't have a specific time table for the commercialization of domestically developed GMO corn and rice strains, according to the country's vice ag minister. The country is taking what he says are "active but cautious measures" on the GMO front. He says, "We will actively strengthen scientific research and develop new strains with our own intellectual property rights... while we will be cautious in commercialization and application to ensure safety of the products."
The long and short of it: China's slow approval of GMO strains isn't contained to the MIR 162 situation that continues to make news. The slow and cautious approach seems like it will continue even though China faces a situation where demand growth is outpacing production growth.
* India expects record wheat crop. India's 14 wheat crop is expected to be record-large at over 100 MMT, according to Farm Minister Sharad Pawar. Last year, India produced a wheat crop of 92.46 MMT, while the current record output is 94.88 MMT in 2011-12.
The long and short of it: Plentiful world wheat supplies are keeping the wheat market under pressure. Expectations for record Indian production will add to the supply-side pressure.
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