First Thing Today (VIP) -- April 9, 2014

April 9, 2014 01:14 AM

Good morning!

Corn mixed, beans and wheat firmer this morning... As of 6:30 a.m. CT, corn futures are fractionally to 1 cent higher in old-crop contracts and 2 to 3 cents lower in new-crop contracts, soybeans are 6 to 10 cents higher in old-crop contracts and 2 to 4 cents higher in new-crop contracts, while wheat futures are mostly 3 to 7 cents higher. The U.S. dollar index is modestly firmer this morning.

April crop reports out this morning... Traders are expecting USDA to trim its 2013-14 carryover projections for corn, soybeans and cotton, while its wheat ending stocks forecast is expected to be up from month-ago in the Supply & Demand Report. The average pre-report guesses peg carryover at 1.403 billion bu. for corn, 139 million bu. for soybeans, 583 million bu. for wheat and 2.5 million bales for cotton. USDA will also update its global production and carryover forecasts.

As expected, winter wheat CCIs plunge... When USDA's initial crop condition ratings of the spring are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the HRW crop plunged 64 points from last fall to 299, while the SRW crop fell 30 points to 348. Last year at this time the CCI ratings were 274 for HRW and 371 for SRW. The first spring CCI ratings last year (as of March 31) were 277 for HRW and 362 for SRW.

Key U.S.-Japan trade talks today, but thorny ag, auto issues linger... Progress has been made in Trans-Pacific Partnership (TPP) trade negotiating talks between the U.S. and Japan but perhaps not enough to conclude the talks, Japan's Economy and Finance Minister Akira Amari said at a news conference following negotiations between Hiroshi Oe, Japan's deputy TPP negotiator, and acting Deputy U.S. Trade Representative Wendy Cutler. Amari said he expected to meet USTR Michael Froman today, the likely last such meeting regarding U.S.-Japan TPP talks before President Barack Obama and Prime Minister Shinzo Abe hold a summit at the end of this month. The major issues involve autos and agriculture products, both thorny issues.

U.S.-Brazil talks today on 2014 Farm Bill... Obama administration officials are still trying to convince Brazil the 2014 Farm Bill should resolve their concerns about U.S. cotton subsidies. USDA's undersecretary for farm and foreign agricultural services, Michael Scuse, told the House Agriculture Appropriations Subcommittee Tuesday he will be meeting with his Brazilian counterpart today to continue the discussions. "We continue working toward finding a resolution to that issue," he said. Separate negotiations have been taking place on the issue, but details of those talks are lacking.

French ending wheat stocks forecast raised again... FranceAgriMer raised its 2013-14 French soft wheat ending stocks forecast for a fourth straight month to 3.3 MMT from 3.2 MMT previously due to lower exports within the EU. French wheat stocks are now seen up 12.5% from 2012-13. The French farm office also raised its corn ending stocks forecast to 3 MMT from 2.9 MMT previously.

Choice wholesale beef prices continue to plunge... Choice boxed beef prices dropped another 94 cents Tuesday, falling to $226.99, while Select cuts firmed 98 cents to $216.97. Movement improved to 167 loads on the day, though that still isn't to a level that signals retailers see beef as a value buy.

Softening demand for cash hogs... Instead of actively competing for a tightening supply of market-ready hogs, plants are lowering cash hog bids and trimming kill hours in an attempt to get margins back in the black. Therefore, cash hog bids are expected to remain under pressure.

Overnight demand news... Japan purchased 25,970 MT of feed wheat and 41,510 MT of feed barely from a tender for 120,000 MT of wheat and 200,000 MT of barley.


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