First Thing Today (VIP) -- April 1, 2013

April 1, 2013 01:43 AM
 

GOOD MORNING!

FOLLOWTHROUGH SELLING PRESSURE... As of 6:30 a.m. CT, corn futures are trading 36 to 37 cents lower in old-crop contracts and mostly 5 to 6 cents lower in new-crop contracts, soybeans are 14 to 17 cents lower in old-crop contracts and mostly 3 to 5 cents lower in new-crop contracts. Wheat futures are mostly 4 to 8 cents lower at all three exchanges. The U.S. dollar index is holding near unchanged this morning.

EMPLOYMENT REPORT ON FRIDAY KEY WASHINGTON EVENT THIS WEEK... Congress is out on the second of lawmakers' two-week Easter recess, but some senators will be visible regarding what appears to be substantial progress on immigration reform talks. It could be a big week on the economic front as key employment data comes out Friday morning. Several Federal Reserve speakers on tap this week may also be a source of market attention. On the ag front, the week opens with the return of the weekly Crop Progress update, with the focus on the situation in the Plains and how the HRW crop fared the winter. Thursday's Weekly Export Sales Report will mark the first release of data on weekly export sales of U.S. pork to foreign destinations. Meanwhile, mandatory wholesale pork cutout prices go "real time" today. USDA will publish cutouts based on both voluntarily reported data and mandatorily collected data for some time.

CHINA PMI READINGS IMPROVE, BUT MISS EXPECTATIONS... China's official purchasing managers' index (PMI) rose to an 11-month high of 50.9 in March, but that was below expectations. Meanwhile, the final HSBC PMI came in at 51.6 in March, up from 50.4 in February but below the flash reading of 51.7. The data signals China's manufacturing sector is strengthening, but headwinds remain.

CHINA DOWNPLAYS NEW BIRD FLU FEARS... Two Shanghai men have died from a lesser-known type of bird flu in the first known human deaths from the strain, and Chinese authorities said Sunday that it wasn't clear how they were infected, but that there was no evidence of human-to-human transmission, according to the Associated Press. A third person, a woman in the nearby province of Anhui, also contracted the H7N9 strain of bird flu and was in critical condition, China's National Health and Family Planning Commission said in a report on its website. There was no sign that any of the three, who were infected over the past two months, had contracted the disease from each other, and no sign of infection in the 88 people who had closest contact with them, the medical agency said.

WILL EGYPT'S FINANCIAL CRISIS IMPACT WHEAT IMPORTS?... A cash shortage is raising questions about Egypt’s ability to keep importing wheat that is essential to the food supply, stirring fears of an economic catastrophe, though American and European exporters of wheat will reportedly provide payment facilities to Egypt to import wheat during a period of up to nine months. Meanwhile, an IMF delegation will arrive in Egypt on Wednesday for talks with the government on a $4.8 billion loan, a government spokesman said on Sunday, as Cairo seeks to conclude a deal vital to easing a deep economic crisis.

LOW IN PLACE FOR CATTLE?... Live cattle futures finished last week on a strong note and the cash cattle market traded as much as $4 higher in the Plains, suggesting a short-term low has been posted. But the boxed beef market is still struggling to put in a low. It will be hard to trigger sustained buying interest in the cattle market until beef demand concerns are eased.

SLIGHT PRESSURE EXPECTED FROM H&P REPORT... Last Thursday's Quarterly Hogs & Pigs Report came in about as expected, although some categories were on the negative side of the pre-report guesses. As a result, mild pressure is expected on lean hog futures in reaction to the data. But the bulk of the price action in the hog market will continue to be driven by the cash and product markets.

WEEKEND DEMAND NEWS... South Korea purchased 55,000 MT of optional origin corn, but passed on a tender to buy 55,000 MT of U.S. or South American soybean meal. Tunisia passed on a tender to buy 42,000 MT of optional origin durum wheat. India tendered to export 65,000 MT of wheat.

 

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