First Thing Today -- July 17, 2012

July 17, 2012 01:39 AM



EARLY GAINS FADE OVERNIGHT... Corn and soybean futures posted new contract highs overnight, but have come well off those highs this morning amid profit-taking. As of 6:30 a.m. CT, corn was mixed with soybeans 7 to 14 cents lower. Wheat futures were trading 1 to 10 cents lower in Chicago, mixed in Kansas City and 5 to 6 cents higher in Minneapolis. The U.S. dollar index is holding near unchanged this morning.

CORN, BEAN CCI RATINGS CONTINUE TO PLUNGE... As expected, when USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale), the corn and soybean crops both took another major step backwards. The corn crop plummeted 23 points to 280 and the soybean crop plunged 11 points to 292. Once again, CCI ratings declined in all of the Corn Belt states.

HOW CORN AND SOYBEAN RATINGS COMPARE TO 1988... Corn crop condition ratings are above where they were for week ended July 17, 1988, when 50% of corn was rated "poor" to "very poor." Soybeans that week were 30% "poor" to "very poor", up from 37% the prior week. Only 18% of corn and 20% of soybeans were rated "good" to "excellent" the week ended July 17, 1988.

AUSSIE SCIENTISTS: EL NINO STILL EXPECTED... The Australian Bureau of Meteorology says, "While indicators such as the Southern Oscillation Index (SOI), sea surface temperatures and trade winds have eased over the past two weeks, such short-term fluctuations are common and to be expected, and indicators still clearly remain near El Niño thresholds." The bureau continues to call for the start of El Niño by late summer or early fall.

FARM BILL VOTES NOT IN HOUSE FOR PASSAGE... The House Ag Committee-passed farm bill would face a rocky floor vote and at this time would not likely pass that chamber, veteran House sources inform. That ups the odds House GOP leaders will punt the farm bill either into the post-election, lame-duck session of Congress, or extend the current farm bill and work on the measure in 2013.

ARGENTINA TO APPROVE 15 MMT OF CORN EXPORTS... Argentine President Cristina Fernandez announced Monday she will officially clear 15 MMT of corn exports for 2012-13 Wednesday. The large (and early) announcement of corn export quotas is a change from the past when the Argentine government would release small batches of corn exports after domestic supplies were ensured. Based on comments from President Fernandez, Argentina is hoping to promote greater corn production.

'ALARMING' DROUGHT IN KAZAKHSTAN... The latest government data shows 36.5% of the Kazakhstan grain crop is in "good" condition while 53.7% is "satisfactory." But the country's deputy ag minister says drought in northern production regions is "alarming," which will dramatically cut crop size from last years record output.

INDIAN GRAIN CROP RECORD LARGE... India produced a record grain crop of 257.44 MMT in 2011-12, according to the final production figures from the government. Indian wheat production totaled a record 93.9 MMT in 2011-12. Last year's bumper crop will help the country withstand any shortfalls that may be seen this year as the monsoon rains were slow to start and have been disappointing so far.

UNINSPIRING START IN THE BOXED BEEF MARKET... Boxed beef prices were 10 to 38 cents lower Monday and packers moved only 192 loads of product on the day. While that's not a terrible start to the week, it's not the kind of action needed to encourage hopes of steady to firmer cash cattle trade in the Plains.

STILL NO PROOF OF A LOW IN THE PORK PRODUCT MARKET... The pork cutout value was 68 cents lower Monday and packers moved only 57.75 loads of product on the day. With prices sliding and movement slowing from week-ago, there's no proof yet that the pork product market has posted a short-term low. As a result, cash hog bids will remain steady to lower across the Midwest.

OVERNIGHT DEMAND NEWS... Japan is seeking 209,610 MT of U.S. and Canadian wheat in its weekly tender.

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