FIRMER TONE IN GRAINS OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are 5 to 9 cents higher through the November contract with lesser gains in farther-deferred months, Chicago wheat is 4 to 7 cents higher, Kansas City wheat is 4 to 6 cents higher and Minneapolis wheat is 3 to 6 cents higher. The U.S. dollar index is under pressure this morning.
CHINA BIRD FLU UPDATE... China is now investigating the possibility of human-to-human transmission of the H7N9 bird flu virus within "family clusters." If human-to-human transmission is possible, this becomes a much more severe situation as it could then turn into a pandemic. Thus far, the virus has infected 83 people, with 17 of those cases resulting in deaths.
DEADLY BLAST AT TEXAS FERTILIZER PLANT... A massive explosion at a fertilizer storage/distribution facility in West, Texas, Wednesday night killed up to 15 people and left more than a hundred injured. Authorities are still trying to find dozens of missing individuals, with their efforts by slowed by toxic fumes from the plant.
FARM BUREAU QUESTIONS VILSACK ON ‘EXTRA’ CUT TO DIRECT PAYMENTS... USDA’s intention to reduce direct payments producers will receive in October by 8.5% due to the sequester-forced spending reductions is being questioned by the American Farm Bureau Federation (AFBF). The reduction in direct payments totals $156 million and to account for sequestration costs of (a) the Supplemental Revenue Assistance Payments Program (SURE); (b) the Tobacco Transition Payment Program; (c) the Marketing Assistance Commodity Loans Program; (d) the Crop Cash Loan Deficiency Payments Program; (e) Storage and Handling Programs; (f) the Noninsured Crop Disaster Assistance Program (NAP); and (g) the Milk Income Loss Contract Program (MILC), according to a letter from AFBF President Bob Stallman. Around 350,000 producers would be affected by cuts to these programs and direct payments. Acknowledging that agriculture is willing to do its "fair share" in the sequestration reductions, AFBF noted that the percentage reduction should have been the 5.1% sequestration level. "We do, however, oppose the additional 3.4% reduction that is being applied only to those participating in the direct payment program," Stallman stated.
WET WEATHER DELAYING CHINESE CORN PLANTING... A rainy start to spring is delaying corn planting across China's main corn growing areas in northeastern provinces, according to the ministry of agriculture. In Heilongjiang, China's top corn production province, 5.29 million hectares (about 40% of total grain area) are under excessive water. Meanwhile, dryness concerns in northwestern areas of the country are threatening crop emergence.
CHINA TO SELL HIGH-QUALITY COTTON... China is making additional cotton reserves available to textile mills, including the first sales of 2012 domestic cotton and 2011 imported cotton, according to the China National Cotton Reserves Corp. The sales of high-quality cotton from state-owned reserves should increase purchases from mills. In addition to offering better quality supplies to mills, the government will now let them buy up to 8 months of needs instead of the previous 2-month cap.
FIRM LOWERS EU WHEAT, BARLEY FORECASTS... Private firm Strategie Grains lowered its EU-28 (including Croatia) wheat production forecast to 131.1 MMT from 131.6 MMT previously. That's still up 5% from 2012 production. The firm now forecasts barley production at 29.3 MMT compared to 30.2 MMT previously.
WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended April 11, traders expect corn sales between 250,000 and 500,000 MT; wheat sales between 200,000 and 450,000 MT; soybean sales between 400,000 and 700,000 MT; soymeal sales between 100,000 and 250,000 MT; and soyoil sales between 0 and 15,000 MT.
WAITING ON ACTIVE CASH CATTLE TRADE... After very light trade in Texas at $125 Monday, the cash cattle market has been quiet. Feedlots still have hopes of getting steady $127 bids compared with last week's trade, but packers have been slow to establish bids. With USDA's Cattle on Feed Report out Friday afternoon, packers and feedlots may wait until after the data is released to get serious with cash cattle negotiations.
PORK MARGINS IMPROVING... The combination of firming pork product prices and weaker cash hog bids this week has pushed packer cutting margins solidly into the black. Despite the improved margins, packer demand for cash hogs is expected to remain limited today. But if margins continue to strengthen, packer demand should eventually improve as market-ready hog supplies are tightening.
OVERNIGHT DEMAND NEWS... Japan bought 105,425 MT of wheat in its weekly tender, including 48,385 MT of U.S. supplies.