First Thing Today (VIP) -- August 16, 2012

August 16, 2012 01:36 AM


CORN, WHEAT FIRMER; BEANS WEAKER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading fractionally to 2 cents higher, soybeans mostly 1 to 4 cents lower and wheat futures mostly 10 to 14 cents higher at all three exchanges. The U.S. dollar index is mildly favoring the upside overnight.

USDA RELEASES INITIAL CERTIFIED ACREAGE DATA... Analysis of the initial release of FSA certified acreage data for 2012 indicates that planted acreage for this crop year is likely around 3 million acres higher than the current estimates from the National Ag Statistics Service, including around an additional 1.2 million acres for soybeans and around an added 500,000 acres for corn. Contacts advise the FSA data was one factor that kept NASS from reducing harvested acres more than they did in the August Crop Production Report.

FORMER OFFICIAL: CHINA SHOULD SEEK ALTERNATIVES TO U.S. CORN... The former head of China's State Administration of Grain says the country should look to sources like Argentina to fulfill its corn needs as U.S. corn has lost its competitive advantage. He also says, "Affected by the U.S. corn price surge, it has become remarkably less feasible for China to use the global corn market to increase domestic supply." Meanwhile, the former official says China should have abundant soybean reserves to meet needs.

RUSSIAN ON-FARM GRAIN STOCKS AT MULTI-YEAR LOW... As of Aug. 1, Russian farmers held 15.73 MMT of grain on farms with wheat accounting for 10.61 MMT of that total. On-farm grain stocks are the lowest since 2006 and Aug. 1 farmer wheat holdings are the lowest since 2003. Private consulting firm SovEcon says exporters are stockpiling supplies amid speculation the country may eventually curb exports.

FIRM RAISES EU WHEAT FORECAST, LOWERS CORN... Private consulting firm Strategie Grains raised its European Union soft wheat crop estimate by 1.7 MMT to 125.3 MMT as yields have been stronger than expected. The firm cut its corn forecast by 7.1 MMT to 58.1 MMT amid drought stress in most areas except western Europe.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended July 9, traders expect: corn sales between 350,000 and 550,000 MT; wheat sales between 450,000 and 550,000 MT; soybean sales between 750,000 and 950,000 MT; soymeal sales between 150,000 and 250,000 MT; and soyoil sales between 10,000 and 20,000 MT.

SLOW GOING ON CASH CATTLE NEGOTIATIONS... Bids and asking prices remain $4 to $5 apart in the Plains. While feedlots seemingly have the upper hand in cash negotiations amid firming boxed beef prices and relatively tight market-ready supplies, active cash cattle trade may not be seen until late Friday -- possibly after USDA's Cattle on Feed Report.

SUPPLIES PRESSURE HOG/PORK MARKET... Lean hog futures faced heavy selling pressure Wednesday amid supply concerns. Based on the sharp $1.32 decline in the pork cutout value yesterday, it appears some of those supply concerns are valid. With plentiful market-ready supplies and the pork product market flashing warning signs of a top, the cash hog market will remain under pressure across the Midwest.

OVERNIGHT DEMAND NEWS... Japan purchased 70,865 MT of U.S. wheat in its weekly tender. South Korea tendered for 23,000 MT of U.S. wheat. Algeria purchased at least 350,000 MT of optional origin milling wheat.


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