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First Thing Today (VIP) -- April 24, 2014

06:08AM Apr 24, 2014

Good morning!

Corn and wheat mildly firmer, beans slightly lower this morning... As of 6:30 a.m. CT, corn futures are trading fractionally to 1 cent higher, soybeans are around 1 cent lower in old-crop contracts and around a nickel lower in new-crop contracts, while wheat futures are mostly 2 to 4 cents higher. The U.S. dollar index is trading just below unchanged this morning.

China detains three Marubeni employees... Three employees at Marubeni's Columbia Grain Inc. division have been detained by customs authorities in the Chinese port city of Qingdao over tax evasion and/or smuggling allegations. The detainments come amid recent defaults on soybean shipments by Chinese buyers and rising territorial tensions between China and Japan, though it's uncertain if this situation is tied to either. From a market perspective, key to this situation is whether/how it impacts Marubeni-brokered soy shipments to China.

Argentine dockworkers delay strike... The Argentine soy crushers union was set to strike late last night after wage talks with the government this week failed to satisfy them, according to sources in the country. But sources say those plans have now been pushed back to midday today as the Argentine government hopes to avoid a strike since it desperately needs the revenue from soy exports and can't afford an extended work stoppage. As a result, union workers seemingly hold the upper hand in these negotiations, but their demands for wage increases that compensate for the 30%-plus inflation in the country are unlikely to be fully met.

Don't rule out an increase in the biodiesel volume requirement for 2014 RFS... Sources are signaling that the 1.28 billion gallons of biodiesel EPA announced in November as the preliminary volume requirement for the 2014 Renewable Fuel Standard (RFS), unchanged from 2013, could be revised higher. One former government official told us, "The capacity is clearly there for a higher volume amount."

Japan playing hardball re: TPP talks, may deal with Canada on pork to pressure United States... Japan, the world’s largest pork importer, may accelerate tariff talks with Canada to increase pressure on the U.S. to ease demands for cuts in agricultural protection, the Asian nation’s biggest hog farmer group told Bloomberg News. "Canada is eager to boost pork sales to Japan and may seek treatment similar to what Japan gave to Australia," said Takashi Koiso, a director at the Japan Pork Producers Association. U.S. pork industry lobbyists are insisting on total elimination of Japanese pork trade constraints. "We cannot accept tariff cuts beyond the level agreed to with Australia, or our industry will be undermined," said Hisao Kuramoto, the pork association’s managing director.

Weekly export sales report out this morning... For the week ended April 17, traders expect (old- and new-crop combined): corn sales between 650,000 and 1.05 million MT; wheat sales between 450,000 and 900,000 MT; soybean sales between 150,000 and 650,000 MT; soymeal futures between 75,000 and 225,000 MT; and soyoil sales between 0 and 35,000 MT.

Canadian planting intentions out this morning... Statistic Canada's survey work is expected to show Canadian producers will plant fewer acres to wheat, barley and corn this year, while seedings of canola and soybeans are expected to rise. The average pre-report guesses peg all wheat seedings at 24.4 million acres, canola at 21.1 million acres, barley at 6.7 million acres, soybeans at 4.8 million acres and corn at 3.4 million acres.

Low-pathogenic bird flu confirmed in California... Low-pathogenic avian influenza was detected in a quail flock at a farm in Stanislaus County, California, on April 18, according to state ag officials. The farm has been quarantined, birds on the farm have been euthanized and surrounding bird flocks are being tested. Because of the bird flu discovery, Russia and Taiwan have banned imports of chicken from California. Cuba has restricted imports of fresh or frozen poultry from birds raised or processed in Stanislaus County and Japan has banned California eggs laid and poultry slaughtered on or after March 24. But impacts should be limited as California is not a major poultry exporter.

Steady cash cattle trade in Northern Plains... There were reports of light cash cattle trade at steady prices with week-ago in the Northern Plains Wednesday. That keeps feedlots' hopes alive for steady to firmer cash trade in the Central and Southern Plains. With wholesale beef prices surging, packers may be willing to pay up for cattle, especially if they are short-bought on supplies after moderate purchases the past couple weeks.

Pork movement builds... Packers moved a strong 460.22 loads of pork Wednesday after moderate movement Tuesday. Building pork movement is a clue prices may have dropped to "value" levels. If so, the slide in cash hog bids may come to an end soon, though not likely until packer margins push back above breakeven.

Overnight demand news... Morocco purchased 30,000 MT of wheat from Poland. Jordan tendered to buy 150,000 MT of milling wheat and 150,000 MT of feed barley -- both optional origin.