First Thing Today (VIP) -- December 11, 2012

December 11, 2012 12:35 AM


CORN AND WHEAT LOWER, BEANS FIRMER... As of 6:30 a.m. CT, corn futures are trading 1 to 4 cents lower, soybeans 1 to 5 cents higher, Chicago wheat mostly 5 to 6 cents lower, Kansas City wheat mostly around 3 cents lower and Minneapolis wheat fractionally to 4 cents lower. The U.S. dollar index is under moderate pressure this morning.

DECEMBER SUPPLY & DEMAND REPORT OUT THIS MORNING... USDA will NOT update corn and soybean production estimates this month, so focus will be on demand projections and the impact any changes have on ending stocks. Based on the pre-report trade guesses, corn carryover is expected to rise 19 million bu. from last month to 666 million bu., soybean carryover is anticipated to decline 5 million bu. from November to 135 million bu. and wheat carryover is expected to rise 14 million bu. from last month to 718 million bushels.

MISSISSIPPI RIVER UPDATE... Revised forecasts now call for the Mississippi River to stay above 9 feet -- the minimum level for barges -- until December 29, around two weeks longer than prior forecasts. The Army Corps of Engineers also says it expects removal of rock formations in the Mississippi River will start this month. This comes after last week's denial by the Army Corps of Engineers for a release of water from the Missouri River. Meanwhile, Sen. Dick Durbin (D-Ill) is calling a meeting for stakeholders (senators from river border states, state and local officials and representatives from agriculture, shipping and other industries) so they can receive a briefing from the Army Corps. "The Army Corps believes that we can maintain navigation on the Mississippi through means other than the release of water from the Missouri River. I hope they are right and I want them to meet with those directly impacted by this challenge," said Durbin. "At our request, the Corps has expedited the process of removing rock pinnacles to improve navigation. The next step is for the Corps to brief industry leaders and local stakeholders which is why I will be convening this meeting. We must do everything we can to reduce the likelihood of serious disruption to traffic along the river."

CROP INSURANCE PAYOUTS HIT $8 BILLION FOR 2012 CROPS... Indemnities under the crop insurance program have reached $8 billion for 2012 crops as of Dec. 10, according to data from the Risk Management Agency (RMA). In addition, payouts for corn reached $4.7 billion, exceeding the level of premiums paid and it pushes the loss ratio to 1.10. Overall, the $8 billion in indemnities still falls short of the record $10.8 billion paid out for 2011 crops, but projections remain at $15 billion to $16 billion or more for 2012 crops.

AUSSIE 2012-13 AG EXPORTS SEEN DOWN 1% IN VALUE... Australian ag exports are expected to total 39.5 billion Australian dollars ($41.4 billion) in 2012-13, down from A$39.9 billion ($41.8 billion) in 2011-12, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). Of that total, farm exports (grains, sugar, livestock) are expected to account for around A$36 billion ($37.7 billion), with the crops portion forecast to be valued at around A$22 ($23 billion).

BOXED BEEF PRICES FIRM, BUT MOVEMENT LIGHT... Boxed beef prices were 54 cents (Select) to $1.10 (Choice) higher Monday, but packers moved only 150 loads of product at the higher prices. Given negative packer cutting margins, traders will want to see strength in both prices and movement before there are indications the product market is strong enough to support higher cash cattle prices in the Plains.

SLUGGISH START FOR PORK PRODUCT MARKET... The pork cutout value was 59 cents lower Monday and packers moved only 40.25 loads of cuts and trim on the day. With most pork plants still cutting in the red, cash hog bids will remain under pressure as market-ready supplies are plentiful. Cash hog bids are expected to be steady to $1 lower today.

BRAZIL TEMPORARILY BANS RACTOPAMINE... Fearing Russia could shut off meat imports from its country, Brazil has temporarily banned the use of ractopamine in meat production. The ban will be in effect until Brazil can set up a segregation system for beef and pork produced for export, according to an official with the Brazilian ag ministry. Russia is stepping up tests of U.S. and Canadian meat imports for traces of the feed additive.

OVERNIGHT DEMAND NEWS... Japan is seeking 134,157 MT of U.S. and Canadian wheat in its weekly tender.


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