First Thing Today -- July 19, 2012

July 19, 2012 01:13 AM


ALL-TIME HIGHS IN CORN AND BEANS... September corn futures pushed above $8 and November soybean futures topped $17 overnight, which are all-time highs. As of 6:30 a.m. CT, corn futures were trading 10 to 15 cents higher, soybeans 17 to 36 cents higher, Chicago and Kansas City wheat 7 to 17 cents higher and Minneapolis wheat 6 to 11 cents higher. The U.S. dollar index is under pressure this morning.

CHINESE BUYERS LOOKING TO SELL BACK US CORN CARGOES... Several Chinese feed makers are in talks with exporters to sell back four to five cargoes of US corn purchases for 2012-13 two trade sources told Reuters. One of the sources says, "We are still talking about washing out the cargoes. It is good for both sides. Buyers booked the cargoes at a price of below $6 (per bushel) while current US corn has already risen much higher."

CHINESE DEMAND FOR STATE SOYBEAN RESERVES REMAINS HIGH... China sold 278,625 MT of state-owned soybean stocks at its weekly auction. Surging prices are causing Chinese processors to more actively seek state-owned supplies.

UKRAINE CORN TALKS WITH CHINA MOVING FORWARD... Ukraine hopes to have a corn quarantine deal with China by the end of the year that would clear the way for corn trade between the countries, according to major farm group UkrLandFarming (ULF). "Both sides are actively involved in the talks and an ongoing drought (in the US) has given an opportunity to Ukraine corn and will advance the entry process." Oleg Bakhmatyuk, chairman of the board of ULF says.

SOUTH KOREAN GROUP ASKS US TO SLOW CORN, BEAN BIOFUELS USE... South Korea's largest feed buyer is urging the US the consider reducing the use of corn and soybeans in biofuels production amid tight supplies and rising prices. "Purchases from South America and Eastern Europe aren’t a solution and substitution is also not possible as most grain and oilseed prices are surging," Kim Chi Young, director for purchasing at the Korea Feed Association told Bloomberg. "The impact on domestic livestock and food industries will come later this year or early next year as we’ve covered most of our corn requirements," Kim says. "For feed wheat and soybean meal, buyers have covered their needs through November."

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended July 12, traders expect: corn sales between 300,000 and 450,000 MT; wheat sales between 350,000 and 500,000 MT; soybean sales between 450,000 and 700,000 MT; soymeal sales between 50,000 and 150,000 MT; and soyoil sales between 20,000 and 40,000 MT.

GOP CONSERVATIVES MAKE OFFER ON CONTINUING RESOLUTION... Conservative GOP lawmakers are pushing for an early vote on a stop-gap spending bill for Fiscal Year 2013, which begins Oct. 1, 2012, that would keep the government running and leave major funding decisions for the next Congress. Republicans stress they still want budget reductions, but they believe they will have more power next year and will be in a better position to force deeper cuts. In a letter circulated by Sen. Jim DeMint (R-S.C.), and signed by 20 members of the House and Senate, lawmakers said they would try before the August recess to clear a continuing resolution (CR) at a "fiscally responsible" level that would avert a new showdown over a potential government shutdown in the fall. Few Democrats are likely to back a CR that extends beyond December, leaving GOP leaders dependent on their own caucus members, who may be reluctant to continue current spending.

CASH CATTLE ASKING PRICES INCREASE... Wednesday's strong rebound in cattle futures caused feedlots who have not cleaned up showlists to raise their asking prices. After moderate to active cash sales around $113 Tuesday, feedlots are now said to be asking $115 for remaining cattle, which would be steady to $1 higher than last week's trade.

PORK CUTOUT FIRMS AGAIN... The pork cutout value was 38 cents higher yesterday following Tuesday's $1.22 gain and packers moved a solid 72.75 loads of product on the day. While that's not enough to signal a definite short-term low in the pork product market, those hopes are building.

OVERNIGHT DEMAND NEWS... Taiwan purchased 43,500 MT of US wheat. Israel purchased 25,000 MT of corn and 20,000 MT of feed wheat -- both likely Black Sea origin.

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