First Thing Today (VIP) -- December 31, 2013

December 31, 2013 12:30 AM
 

GOOD MORNING!

QUIET OVERNIGHT SESSION... Corn futures spent the overnight session trading in a very narrow range and as of 6:30 a.m. CT are fractionally lower. Soybean futures also did not stray far from unchanged overnight and the market is currently posting losses of 1 to 3 cents in most contracts. Recent and forecast scattered showers in Argentina are giving market bears a slight advantage in these markets. SRW wheat and HRS wheat are narrowly mixed, while HRW wheat is slightly lower. The U.S. dollar index is favoring the upside this morning, while crude oil futures are facing light pressure.

 

HOLIDAY TRADING SCHEDULE... The grain and livestock markets will observe normal trading hours today, but all market and government offices will be closed Wednesday for the New Year's holiday. Grain markets will resume trading at 8:30 a.m. CT on Thursday, while livestock markets will reopen at 9:05 a.m. CT.

U.S. STOCKS HEADING FOR BEST PERFORMANCE IN 18 YEARS... Fueled by the Fed's easy money policies and an improving economy, U.S. stocks are poised to close their best year since 1995. Prior to the final day of trading for 2013, the Dow was up 29% when dividends are included and the S&P 500 was 32% higher.

U.S. POPULATION GROWTH REMAINS MUTED... Population growth slowed to the weakest rate since the Great Depression between July 2012 and July 2013 with an increase of just 0.72% to 316.13 million people. Some attribute the low growth, which has been muted for a number of years, to the recession and its aftermath, including diminished immigration.

AG CONSULTANCY UPS UKRAINE CORN CROP OUTLOOK... UkrAgroConsult raised its 2013 grain harvest forecast for Ukraine by 500,000 MT to 56.5 MMT today, citing larger corn production than anticipated. The consultancy expects Ukrainian corn production to hit 26 MMT, which is up 500,000 MT from its previous estimate. This would also be a major increase from 18.8 MMT in 2012. UkrAgroConsult expects Ukraine to export 30 MMT of grain this season, which represents a slight upside revision to its prior estimate.

HEAVIER SHOWLISTS VS. UNFAVORABLE WEATHER... Live cattle futures enjoyed light support yesterday from record-setting cash cattle trade Friday; this will likely continue to limit the market's downside, though this week's cash action is up in the air. Showlist estimates are steady in Nebraska but up roughly 16,000 head from the week prior in other locations, which could make it tough for feedlots to get better than steady prices for cash cattle. On the other hand, bitter cold across northern U.S. and snow in the Midwest could disrupt transportation and stress livestock. A surge in boxed beef prices yesterday signals strong demand coming off the holidays and possibly retailers' intention to feature beef early on in 2014. Choice boxed beef jumped $2.72 to $199.71 per cwt. and Select gained $4.61; however this slowed movement to 115 loads.

BEARISH ATTITUDES IN HOGS HEADING INTO YEAR-END... Lean hog futures posted a bearish reversal in the face of positive inventory data from USDA Friday, indicating attitudes are highly bearish and that more downside risk is likely ahead for the market. The February contract remains at a steep premium to the cash hog index. Followthrough selling today could be kept in check by improvement in the pork market coming off of the holiday. The pork cutout value gained 25 cents yesterday and movement improved to 381.51 loads.

OVERNIGHT DEMAND NEWS... India issued a global tender to export 160,000 MT of wheat.

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