Evening Report (VIP) -- April 5, 2013

April 5, 2013 09:50 AM

PAUSE BETWEEN OVERNIGHT TRADE AND OPEN-OUTCRY BEGINS MONDAY... New trading hours for grain and oilseed futures at the Chicago Board of Trade and wheat futures at the Kansas City Board of Trade begin Sunday night with the start of overnight trade at 7 p.m. CT. Overnight trade will cease at 7:45 a.m. CT daily. Electronic and open-outcry (pit) trade will begin at 8:30 a.m. CT and the end of the trading day will be 1:15 p.m. CT. Due to the pause in morning trade, the 8:30 a.m. Market Snapshot will become "Ahead of the Open" -- and be released around 8:15 a.m. CT. This report will highlight overnight trade and provide opening grain and livestock calls for the day session.


U.S. JOB GROWTH SLOWS... The Labor Department showed just 88,000 non-farm payrolls were added in March, while the unemployment rate ticked 0.1 percentage point lower to 7.6%, thanks to a decline in the number of people in the work force. Investors had hoped the report would show 200,000 jobs were added in March. The Labor Department upwardly revised its February estimate to 268,000 non-farm jobs added.

The number of long-term unemployed was little changed at 4.6 million, which accounts for 39.6% of the unemployed. The civilian labor force declined by 496,000 over the month, and the labor force participation rate decreased by 0.2 percentage point to 63.3% -- the lowest level since May 1979. The employment to population ratio, at 58.5%, was little changed. The report also notes the U.S. Postal Service cut its workforce by 12,000.

This raises questions about the Fed's setting of their numerical "target" for the unemployment rate relative to when they would begin to temper stimulus efforts -- their bond buying in particular. Given the continuing downtick in the unemployment rate while the overall jobs picture remains less than healthy, this will no doubt up the talk by Fed officials that they will consider many factors when it comes time to start scaling back their efforts. But it also underscores the peril of putting that numerical target out there.


CHINESE BIRD FLU UPDATE... The new strain of bird flu, H7N9, has some of the genetic hallmarks of a virus that is easily transmissible, according to Ron Fouchier, a molecular virology professor at Erasmus Medical Center in the Netherlands. In an interview with Bloomberg News, Fouchier said, "This virus really doesn't look like a bird virus anymore; it looks like a mammalian virus," which is worrisome as it implies it can easily be transmitted from birds to mammals. But there is still no evidence that the virus can be contacted via human-to-human contact. Unlike the H5N1 strain of bird flu that has killed more than 600 people since 2003, the new H7N9 strain is a low-pathogenic virus, meaning it does not cause severe sickness in all birds, making it tough identify and ferret out.

So far, H7N9 has killed six people in eastern China; the virus has been identified in 14 individuals. Chinese officials in Shanghai have culled more than 20,000 birds, halted live poultry trading and closed bird markets in an effort to halt the spread of the virus.


NEW-CROP CORN SALE SIGNALS PRICES BECOMING COMPETITIVE... This morning USDA announced an unknown destination purchased 120,000 MT of corn for 2013-14, signaling prices have become more competitive. But the corn market has a long way to go to rebuild the previous large export demand base it held in 2011-12. Click here for more.


ATTACHÉ SEES CHINA'S CORN IMPORTS RISING IN 2013-14... The U.S. ag attaché in China expects the country's wheat production in 2013-14 to be down 2.6 MMT from this season to 118 MMT, but for corn production to rise 2 MMT to 210 MMT. Furthermore, the attaché expects wheat imports in the year ahead to decline by 1 MMT to 2 MMT, while corn imports are seen rising 1 MMT to 4 MMT due to "strong feed and industrial use." The attaché expects further livestock consolidation to be seen in the year ahead, but for more the country to take advantage of expected lower corn prices. Click here for more.


RESET BUTTON HIT ON CORN MARKET... Pro Farmer Editor Chip Flory and Senior Market Analyst Brian Grete discuss the lasting impacts of USDA's March 28 reports in this week's Pro Farmer Profit Briefing clip on AgDay TV.

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