First Thing Today: COFCO Official Expects China to Import 100 MMT of Soybeans in 2017-18

Good morning!

Light short-covering lifting corn and beans... Corn futures saw a mix of followthrough selling and short-covering overnight that took the front-month to a new contract low. As of 6:30 a.m. CT most contracts are favoring the upside in narrowly mixed trade. Soybean futures are mostly 4 cents higher on some corrective trade. Winter wheat futures are down 1 to 2 cents while spring wheat is posting similar gains. The U.S. dollar index is again under pressure, as are crude oil futures.

NOPA's October crush expected to come in near last year's record-high for the month... Members of the National Oilseeds Processors Association (NOPA) will likely report they crushed 164.475 million bu. of soybeans in October, according to analysts surveyed by Reuters. That would be up sharply from September's crush of 136.419 million bu. but down slightly from year-ago when crush totaled 164.641 million bu., the highest level on record for the month. Analysts expect soyoil stocks at the end of October to come in around 1.410 billion lbs., up 108 million lbs. from the end of September and 67 million lbs. above year-ago levels.

COFCO officials expects China to bring in 100 MMT of beans in 2017-18... China will likely import 100 MMT of soybeans in 2017-18, estimates Yanchuan Li, deputy manager of the oilseed processing division for China's COFCO Corp. This is well above estimates from China's ag ministry (95.97 MMT) and USDA (97 MMT). Li detailed that he expects China's soymeal demand in 2018 to remain at a "high rate of growth." He also noted that a limited availability of certificates to import genetically modified beans should support crush margins between November and January. Also of note, the director of the market information department at China National Grain and Oils Information Center said that the amount of soybeans crushed next year may double or triple this year's 1.0 MMT to 1.5 MMT.

Trump alters timeline of 'big announcement'... Trump made brief remarks Tuesday as he prepared to return to Washington. He highlighted his plans to make a significant announcement, now shifted to Thursday, and emphasized his goal of achieving fair, reciprocal trade arrangements.

China to send envoy to North Korea following Trump's meeting with Chinese leader... China will send a special envoy to North Korea, according to the official Xinhua News Agency, days after Trump during his visit to Beijing urged more action from China to pressure Pyongyang over its nuclear program. Beijing agreed to help enforce United Nations sanctions on North Korea, including bans on North Korean trade in coal, iron ore and textiles, and curbs on oil trade.

Repeal of ObamaCare's individual mandate to health insurance and an expiration to individual income tax cuts added to tax reform measure... Senate Finance Chairman Orrin Hatch (R-Utah) Tuesday evening released a modified chairman's mark that makes several changes to the tax code overhaul plan unveiled last week, including the individual mandate repeal, raising $318 billion to help comply with budget reconciliation rules. The measure would also sunset nearly all of the individual tax code provisions, including rate cuts, the increased standard deduction, repeal of the alternative minimum tax, and other provisions after 2025 so tax cuts for households do not add to the deficit after 10 years. The Senate Finance Committee hopes to move a bill to the full Senate floor this week, with the entire chamber voting on it after Thanksgiving. Click here for more.

Ross defends NAFTA 2.0 strategy, expresses frustration with U.S. ag complaints... Commerce Secretary Wilbur Ross has defended the Trump administration’s aggressive trade strategy for renegotiating the North American Free Trade Agreement (NAFTA), saying the U.S. can pressure Mexico and Canada into big concessions because they have more to lose if the pact collapses. Because those countries are more dependent on the U.S. than vice versa, the termination of the 23-year-old pact “would be far more damaging to them than to us,” Ross told the Wall Street Journal, adding that that the two countries will likely “come to their senses and make a sensible deal.” Meanwhile, farm groups and agribusiness companies sent a letter to governors of all 50 states, asking them to urge President Donald Trump to stop the threats of withdrawing from NAFTA. A fifth round of NAFTA 2.0 talks opens in Mexico City today.

Cruz wants deal on RFS as way to lift hold on Northey... Senator Ted Cruz (R-Texas) is urging Iowa Governor Kim Reynolds to reach a deal between oil refiners and the ethanol industry over the Environmental Protection Agency's (EPA’s) Renewable Fuel Standard (RFS). Cruz, speaking on behalf of a group of eight GOP senators, wrote in a Tuesday letter to Reynolds that they do not wish to upend the market for corn ethanol produced in her state. Instead, Cruz argued that the senators' real problem with the RFS is refiners being required to buy expensive renewable identification number credits, or RINs, to meet the EPA's increasing biofuel targets. Cruz has a hold placed on one of Trump's nominees, Bill Northey of Iowa, to serve as a USDA undersecretary. Cruz said he would allow a vote on Northey if the governor agreed to meet and negotiate a solution between the refiners and renewable fuel producers.

Big contraction for China's pig herd in October... China's pig herd contracted 6.6% from year-ago levels in October, the biggest drop since January 2016, according to the country's ag ministry. This followed a 6.1% contraction in herd size in September. Its sow herd fell 5.3% in October, marking the largest drop since March 2016. The country's efforts to crack down on farm pollution by year-end has resulted in the closure of thousands of hog farms over the past year, with efforts escalating as year-end enforcement nears. As a result, its sow and hog herds have fallen relative to year-ago each month since the start of 2016.

WHO says U.S. not doing enough to curb antibiotic use in meat production... The World Health Organization cautioned that the U.S. is falling behind Europe in its battle to curb over- and misuse of antibiotics in meat production. This comes after the organization last week recommended eliminating the use of such drugs to prevent disease in healthy animals and to speed growth.

Lower cash cattle trade expected... Nearby live and feeder cattle contracts are now trading well below their respective cash markets, signaling a lower bias toward this week's trade but also indicating followthrough selling could be limited. So far, there has been just an light test in Iowa at $118 and in Kansas at $119. This is down from trade in Iowa last week from $120 to $122 and in Kansas around $124.

Momentum is to the downside for lean hog futures... Lean hog futures sustained more technical damage on Tuesday and settled near session lows, signaling bears will have the technical advantage to start today's session. Cash hog bids slipped just 27 cents on Tuesday and the product market improved. The pork cutout value climbed 64 cents yesterday and movement picked up to 390.47 loads.

Overnight demand news... South Korea's Nonghyup Feed Inc. purchased 68,000 MT of corn from optional origins; it made no purchase in its other two consignments to buy up to 69,000 MT of the grain. South Korea's Major Feedmill Group issued an international tender to buy up to 70,000 MT of corn. Japan received no offers in its simultaneous buy and sell auction to purchase 120,000 MT of feed wheat and 200,000 MT of feed barley.

Today's reports:

• 9:30 a.m., Weekly Ethanol Production -- EIA
• 11:00 a.m., Meat Price Spreads -- ERS
• 11:00 a.m., Meat Price Spreads -- ERS
• 2:00 p.m., Broiler Hatchery -- NASS