First Thing Today (VIP) -- August 21, 2013

August 21, 2013 01:30 AM
 

GOOD MORNING!

SOYBEANS LEAD GRAINS HIGHER... As of 6:30 a.m. CT, soybeans are up 15 to 21 cents on a return of bargain buying. Corn futures are fractionally to 3 cents higher after trading in a narrow range overnight. Wheat futures are mirroring gains in the corn market. The U.S. dollar index is firmer this morning.

DAY 2 CROP TOUR RESULTS... Day 2 of the Pro Farmer Midwest Crop Tour revealed a corn yield in Indiana of 167.36 bu. per acre, which compares to 113.25 bu. per acre last year and a three-year average of 141.14 bu. per acre. Indiana soybean pod counts in a 3'x3' square totaled 1,185.14, which compares to 1,033.24 last year and a three-year average of 1,136.48. Get more details.

The western leg of the Tour found a Nebraska corn yield of 154.93 bu. per acre, which compares to 131.79 bu. per acre last year and a three-year average of 147.93 bu. per acre. Nebraska soybean pod counts in a 3'x3' square totaled 1,138.94, which compares to 894.43 last year and a three-year average of 1,162.42. Learn more.

On Day 3 of the Tour, scouts on the eastern leg will travel from Bloomington, Illinois to Iowa City, Iowa. Scouts on the western leg of the Tour will sample fields on their way from Nebraska City, Nebraska to Spencer, Iowa. Check "Evening Report" for preliminary route reports from our Tour leaders. We will release official crop tour results for Illinois and western Iowa on our website tonight.

FOMC MINUTES IN FOCUS... The markets are awaiting the release of the Federal Open Market Committee's (FOMC) minutes of its July 30-31 meeting at 1:00 p.m. CT today. Traders will comb through this release for signs as to how much push there was in favor of the tapering the Fed's bond buying program to start that month or in September.

CORN-STATE SENATORS URGE PROBE OF OIL INDUSTRY... Largely a reaction to months of negative remarks on the Renewable Fuel Standard (RFS) and corn-based ethanol in particular, Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) are hitting back at the oil industry for the blend wall that is closing in on the ethanol industry. The senators sent a letter to Attorney General Eric Holder asking him to investigate possible anticompetitive practices by oil refiners aimed at blocking the use of higher ethanol blends. The Renewable Fuels Association asked the Justice Department, FTC, Energy Department, and USDA to launch a similar investigation in March. The Environmental Protection Agency has said it may reduce the scheduled 2014 targets in the RFS because of the market limit for ethanol, which has been hit both by falling gasoline consumption and the inability to get just a few stations to sell ethanol blends above 10%.

CROP INSURANCE INDEMNITIES FOR 2013 HAVE REACHED $2.286 BILLION AS OF AUG. 19... Data from USDA's Risk Management Agency (RMA) shows indemnities for 2012 losses are at $17.399 billion. Wheat remains the main crop with the largest payouts for 2013 losses at $1.244 billion, with cotton at $393 million and corn at $269 million. For 2012, corn still leads the way with $11.822 billion, followed by soybeans at $2.128 billion, cotton at $1.093 billion and wheat with $759 million. Get more details.

STATS CANADA EXPECTED TO SHOW REBOUND IN WHEAT, CANOLA PRODUCTION... Statistics Canada will release its first survey-based production estimates at 7:30 a.m. CT this morning. All wheat production is expected to rise from year-ago with pre-report guesses ranging from 29 MMT to 30.3 MMT, which compares to 27.2 MMT in 2012. Durum wheat production is expected to come in between 4.6 MMT and 5.3 MMT. Last year's durum crop came in at 4.627 MMT. Canola production is expected to be around 15 MMT, which would be up from 13.3 MMT in 2012. Pre-report guesses are for barley production to come in between 8.2 MMT and 9.0 MMT, whereas last year's crop totaled 8 MMT.

INDIAN COTTON PRODUCTION EXPECTED TO RISE... The Cotton Association of India in its first forecast of the season projects the country will produce a crop of 29 million bales this growing season, which would be a 4.6% increase from year-ago. USDA in its July Supply & Demand Report forecasts Indian production at 28 million bales for 2013-14. Nearby cotton futures settled at their 400-point limit lower yesterday; this could encourage followthrough selling today.

GROUP EXPECTS 25% JUMP IN WESTERN AUSTRALIA WHEAT PRODUCTION... Western Australia's wheat production is expected to rise 25% to 7.5 MMT thanks to beneficial rains last month, according to CBH Group. This state is the country's biggest wheat exporters. The group expects Australia's total wheat production to come in between 25 MMT and 25.5 MMT, with exports around 18 MMT.

CASH HOG MARKET CONTINUES TO SOFTEN... Lean hog futures delivered another stronger-than-expected performance yesterday as traders worked to narrow the large discount nearby futures hold to the cash hog index. A slight uptick in the pork cutout value added to the positive tone, and even more impressive, movement picked up to 389 loads. This along with recent steady to lower cash hog bids further widened packer profit margins. But buying interest will largely remain limited to short-covering as supplies are building seasonally and demand typically slows once Labor Day buys are complete.

LIGHT BEEF MOVEMENT TEMPERS CATTLE BUYING INTEREST... Nearby live cattle futures were lifted yesterday by ideas a seasonal rally is underway for the live cattle market after two consecutive weeks of higher trade. Supporting this idea are lower showlist estimates this week and ongoing strength in Choice boxed beef values. Select cuts have fallen this week, however, and movement has been light for the most part. Yesterday, 150 loads changed hands, which was an improvement from recent totals but still on the light side. Feeder cattle futures remain well within their bullish uptrend.

OVERNIGHT DEMAND NEWS... Japan bought 38,860 MT of feed wheat in a simultaneous buy-and-sell tender for November shipment. The country also tendered for 120,000 MT of feed wheat and 200,000 MT of feed barley. Japan is seeking 153,090 MT of milling wheat in four grades for bulk shipment, including 129,055 of U.S. wheat. Jordan purchased 100,000 MT of optional origin wheat from Ukraine.

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