First Thing Today (VIP) -- April 23, 2013

April 23, 2013 01:18 AM


CORN AND WHEAT LOWER, BEANS MIXED... As of 6:30 a.m. CT, corn futures are trading around 2 cents lower in old-crop contracts and 5 to 6 cents lower in new-crop contracts, soybeans are mixed, Chicago wheat is 3 to 7 cents lower, Kansas City wheat is 4 to 7 cents lower and Minneapolis wheat is mostly 2 to 5 cents lower. The U.S. dollar index is firmer this morning.

HRW CCI RATING CONTINUES TO DROP... When USDA's weekly crop condition ratings are plugged into our weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the HRW crop dropped another 8 points to 264. Crop deterioration in Kansas, Texas and Colorado more than offset an improvement in the Nebraska crop. The SRW CCI rating was unchanged at 373. Meanwhile, temps again dipped below freezing across areas of the Central and Southern Plains overnight. More sub-freezing temps are expected tonight.

CHINESE MANUFACTURING DATA RAISES CONCERNS... China's flash HSBC purchasing managers' index (PMI) declined to 50.5 in April from a final reading of 51.6 in March. The new export orders sub-index dropped to 48.6, signaling export demand for goods produced by China's vast manufacturing sector remains the greatest area of concern. The drop in PMI comes on the heels of disappointing first-quarter GDP last week, raising further red flags about China's economic recovery.

UKRAINE MAY LIFT WHEAT EXPORT BAN... Ukraine appears ready to lift the ban on wheat exports for the remainder of 2012-13, with Ag Minister Mykola Prysyazhnyuk saying the country is "ready to make the market free." Prysyazhnyuk says a decision could come this week. Even if the export ban is lifted, Ukraine is not likely to be a major exporter, with estimates the country could ship only 200,000 MT to 500,000 MT of wheat.

MISSISSIPPI RIVER REOPENS SOUTH OF ST. LOUIS, OTHER CLOSURES REMAIN... The Coast Guard reopened a 15-mile stretch of the Mississippi River near St. Louis Monday after it was determined that none of the 11 barges that sank in the channel over the weekend posed a risk to navigation. But about a dozen river locks on the Illinois and Mississippi rivers remain closed north of St. Louis due to high water levels. And river navigation remains restricted to one-way traffic near Vicksburg, Mississippi.

CROP INSURANCE PAYOUTS CLOSE IN ON $17 BIL. FOR 2012 CROPS... Indemnities for 2012-crop losses reached $16.991 billion as of April 22, reflecting GRIP indemnities that can now be figured after the release of county data by the Risk Management Agency last week. The GRIP payments pushed corn indemnities to $11.518 billion. The rise in indemnities lifted the loss ratio to 1.53 for the entire program and to 2.66 for corn.

HOUSE, SENATE FARM BILL LIKELY TO HAVE CLOSE MARKUP, FLOOR DEBATE TIMES... Both the House and Senate are expected to markup their new farm bill versions in early to mid-May. Floor debate in both chambers is likely by the July Fourth recess. If so, that would mean a farm bill conference in August, with a new farm bill end zone before the end of September.

BOXED BEEF MOVEMENT STILL A CONCERN... Boxed beef prices were slighlty higher Monday, but packers moved only 164 loads of product on the day. With traders concerned about beef demand, much of their focus is on boxed beef movement as they formulate cash cattle opinions for the week. Unless product movement sharply improves, packers will be reluctant to raise cash cattle bids given negative cutting margins.

STRONG START FOR PORK PRODUCT MARKET... The pork cutout value firmed $1.45 Monday as all cuts were higher, led by strong gains in loins, ribs and bellies, while packers moved a solid 329.9 loads of product. Given a strengthening pork product market, a tightening supply of market-ready hogs and profitable cutting margins, packers are expected to offer steady to firmer cash hog bids today.

OVERNIGHT DEMAND NEWS... Exporters reported no tenders or purchases overnight.


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