GRAIN HIGHLIGHTS: Top Stories of the Day

Features Dow Jones Newswires

TOP STORIES:

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Grain Prices Rise; Traders Look to Friday Reports

Grain futures turned higher on Tuesday, while soybean contracts continued to fall.

Analysts said there was relatively little to move prices in the day's session, with traders concentrating instead on a slew of government reports due on Friday. Some analysts suggested hedge funds were positioning for the reports by easing off bets that grain prices would fall. Money managers are holding substantial net short positions in both corn and wheat markets.

Farm Deduction Shift Could Cascade Across Agriculture -- Market Talk

15:27 ET - Independent grain companies are raising alarms after the new U.S. tax law provides substantial deductions to farmers who sell crops and other goods to cooperatives. But the shift could also impact meat processors, which have increasingly been buying crops directly from farmers to supply animal feed mills. Some food ingredient makers also purchase directly from farmers. If farmers instead sell more crops to cooperatives to reduce their tax obligations, companies could wind up sourcing more of their grain from cooperatives, potentially adding another layer of costs, agriculture industry officials say. (jacob.bunge@wsj.com; @jacobbunge)

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Tax Law Could Foster New Breed of Cooperatives -- Market Talk

15:31 ET - The U.S. Farm Belt could see a new generation of agricultural cooperatives created thanks to a change in deductions allowed for farmers who sell crops and other goods to co-ops. The new tax law provides a big deduction linked to farmers' sales to co-ops, raising objections from independent grain companies who fear an uneven playing field. In response, some accountants think privately-held and investor-owned grain companies are likely to set up their own cooperative structures, extending membership to established farmer clientele, who would agree to sell crops to the companies' grain facilities. (jacob.bunge@wsj.com; @jacobbunge)

STORIES OF INTEREST:

Egypt's GASC Buys 115,000 Tons of Wheat in Tender

LONDON--Egypt's state grain buyer, the General Authority for Supply Commodities (GASC), bought 115,000 metric tons of wheat in its latest tender, traders said Tuesday.

The deal comprises one 60,000-ton cargo and one 55,000-ton cargo of Russian wheat.

Egypt's GASC Receives Nine Wheat Tender Offers After Uncertainty

LONDON--Egypt's state grain buyer received at least nine offers in its latest wheat tender, with Russian grain again offered at the lowest price excluding shipping costs, traders said Tuesday.

The offers came after traders initially said Egypt's General Authority for Supply Commodities had received no offers, amid supplier concerns about delay premiums caused by stringent Egyptian quarantine rules over recent months.

Deere CEO Upbeat About Equipment Demand -- Market Talk

12:07 ET - Deere CEO Sam Allen delivered an upbeat assessment of the farm equipment market in 2018, despite ongoing weakness in commodity prices and bulging crop surpluses, say analysts who attended Allen's annual breakfast for analysts. Allen reiterated the company's expectation for a slow recovery from a three-year slump in machinery demand, but sees no sales spikes on the horizon. After years of throttling back on factory production to shrink dealers' equipment inventories. JP Morgan says Allen expects Deere's production this year to be aligned with modest retail sales growth. Provisions in the new federal tax code that allow farmers to write off the full cost of equipment investments in a single year should encourage farmers to buy equipment, instead of lease it. Deere up 2.4% at $165.04. (robert.tita@wsj.com; @bob_tita)

THE MARKETS:

Cattle Futures Find Footing; Cash Trade Lower

Cattle futures rose after several sessions of heavy losses, with bargain hunters taking advantage of discounted prices.

February-dated contracts for live cattle rose 0.4% to $1.17675 a pound at the Chicago Mercantile Exchange.

(END) Dow Jones Newswires

January 09, 2018 17:43 ET (22:43 GMT)