US House Votes To Raise Debt Ceiling

The US House of Representatives Tuesday voted to raise the debt ceiling until 2015 without conditions, a major change in strategy, sending a sigh of relief among equities traders around the world.\r\n   Stock market futures rose in overnight trading, and part of the strength may be tied to relief over the debt ceiling issue.  However, news reports this morning point to an unexpected 10.6% jump from a year ago in reported Chinese January exports to a six-month high.\r\n   The value of Chinese imports also jumped 10% from a year ago on record purchases of iron ore, crude oil and copper, Reuters reported.\r\n   The Australian and New Zealand Dollars rose against the US Dollar on the news, despite skepticism about the accuracy of the data, which reflects exports covering a time when the country was virtually shut down for the Lunar New Year holiday.  Reuters said some analysts were warning “the figures may be inflated by fake trade transactions where traders forge deals to sneak cash into the country past capital controls.”\r\n   Political pundits said the House move to raise the debt ceiling without strings was to avoid a confrontation and government shutdown in an election year.  Previously, House Speaker John Boehner had sought to require any debt-ceiling increase to be paired with spending cuts of equal size.\r\n   The Senate is expected to pass the measure.\r\n   Overnight grain and soybean futures are softer as traders choose to reflect on near-term export possibilities of US corn and soybeans.  China may have had stronger-than-expected January imports, but that doesn’t mean soybeans and corn will be on the shopping list in the near future.\r\n   In fact, traders continue to expect announcements at any moment that China has cancelled US soybean orders and switched purchases to cheaper Brazilian offerings.  Last year’s logistical nightmare appears to be much improved, and beans do not have the fierce competition from local crushers they faced last year.\r\n   There are rumors the Chinese are offering some previously booked cargoes, but they are said to be having trouble finding buyers who would prefer to buy Brazilian themselves.\r\n   And South America’s corn harvest is approaching with Brazil’s second crop going in the ground with little trouble.\r\n   But without some type of USDA confirmation of Chinese cancellations, traders are increasingly focused on next week’s USDA Annual Outlook Meeting where long-term production and demand predictions will be dispensed.\r\n   No fed cattle trading was reported in the Plains Tuesday, although live cattle futures finished sharply higher after early cash bids were reported in Kansas at $141 per cwt on a live basis, steady with the bulk of last week’s meager sales, implying higher traded prices this week.  Asking prices were around $144.  ADMIS said the bids instilled panic among those who expected steady to lower trade this week. \r\n   Near-term momentum continues to gain as tight supplies dictate market strength, ADMIS said.  Some say beef prices also appear to be stabilizing after falling from recent record highs.\r\n   Only very light fed cattle trading was reported in the Plains last week at $141 live and $225 dressed.  \r\n   The USDA’s boxed-beef cutout fell Monday with choice down $2.02 per cwt at $209.14 and select off $0.85 at $208.16.  The choice/select spread narrowed to $0.98, and there were 128 loads of fabricated product sold into the spot market.\r\n   The CME Feeder Cattle Cash Index for the seven days ended Monday is $169.33, up $0.02, while the March futures contract settled Tuesday at $168.77, up $0.87.\r\n