First Thing Today (VIP) -- December 6, 2012

December 6, 2012 12:37 AM


CORN STEADY TO WEAKER, BEANS AND WHEAT FIRMER… As of 6:30 a.m. CT, corn futures are trading steady to around 1 cent lower, soybeans mostly 4 to 7 cents higher, Chicago wheat fractionally to 2 cents higher and Kansas City and Minneapolis wheat fractionally to 1 cent higher. The U.S. dollar index is holding near unchanged this morning.

BRAZIL GOV’T UPDATES CROP ESTIMATES… Brazil is expected to produce a record 2012-13 soybean crop of 82.6 MMT, according to Conab, the supply arm of the Brazilian government. The corn crop is now estimated at 71.9 MMT. Conab says, the growing climate is "favorable" in all production regions of the country, including Rio Grande do Sul, where dry conditions have normalized. Previously, Conab estimated soybean production in a range of 80.1 MMT to 83 MMT and the corn crop in a range of 71.6 MMT to 72.9 MMT.  

GEITHNER SIGNALS ADMINISTRATION WILLING TO LET U.S. GO OFF CLIFF IF NO HIGHER TAXES ON WEALTHY... Treasury Secretary Timothy Geithner says there will not be a fiscal cliff deal if there aren’t higher taxes for the wealthy, meaning the administration is prepared to let things go over the cliff. "There is no prospect of an agreement that doesn't involve those rates going up on the top 2%," Geithner said on CNBC. But despite that tough line taken by Geithner, he still sounded optimistic on the prospects that some kind of deal will be worked out. "I think you see the broad outlines of a framework now look more inevitable," he said. Meanwhile, President Obama and House Speaker John Boehner at least talked on the telephone yesterday regarding fiscal cliff issues.

FARM BILL UPDATE… USDA Secretary Tom Vilsack and Senate Ag Chairwoman Debbie Stabenow (D-Mich.) will reportedly journey to the White House today for what some sources signal is a likely farm bill strategy session. No other details are known at this time. Both of the officials are scheduled to give comments to the Farm Journal Forum today in Washington, D.C. Meanwhile, House Ag Chairman Frank Lucas (R-Okla.) said that negotiating a compromise farm bill is a priority over deciding what kind of extension may be necessary to continue agricultural programs into 2013 if a new farm law isn't in place Jan. 1. "I would say our highest priority is agreeing on language that would be available if there is a grand understanding at the end of the year" to avert the fiscal cliff, Lucas said. "We've got to work through those issues before you get to those issues (extension)." Lucas revealed that how much money to cut from the Supplemental Nutrition Assistance Program/food stamps would be left up to congressional leaders and the White House. Of note, there’s a possibility the SURE program could be extended for 2013 crops if budget offsets are found.

FAO CUTS WORLD CEREAL GRAINS FORECAST, BUT PRICE INDEX DROPS… Global 2012 cereal grains production was downwardly revised by 2 MMT to 2.281 billion MT by the United Nations Food and Agriculture Organization (FAO), and is now seen down 2.8% from the previous year’s record. Meanwhile, FAO’s food price index averaged 211 in November, down 3 points from October and the lowest reading since June. Dairy prices increased last month, but the price of cereals, meats, oils/fats and sugar declined.   

ARGENTINA FILES WTO COMPLAINTS AGAINST U.S., EU... Argentina on Wednesday filed complaints with the World Trade Organization (WTO)  against the U.S. and European Union (EU), Argentine Foreign Minister Hector Timerman said. The complaint against the U.S. is over limits on shipments of Argentine beef and lemons while the EU case is over limits on Argentine biodiesel, Timerman noted. "We're open to keep talking while this complaint is handled by the World Trade Organization," Timerman said.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING… For the week ended Nov. 29, traders expect: corn sales between 350,000 and 550,000 MT; wheat sales between 350,000 and 500,000 MT; soybean sales between 500,000 and 700,000 MT; soymeal sales between 150,000 and 300,000 MT; and soyoil sales between 50,000 and 100,000 MT.

SLOW CASH CATTLE NEGOTIATIONS… Packers established initial cash cattle bids at $123 in Kansas yesterday, but have yet to make initial bids in other areas of the Plains. The seemingly light packer interest in cash cattle this week combined with larger showlist numbers have cash sources expecting steady to weaker cash cattle prices compared with last week’s mostly $125 to $126 trade in the Plains.

CASH HOGS CALLED STEADY/LOWER… Packer demand for cash hogs is expected to decline as cutting margins are now well in the red and most plants have the bulk of this week’s slaughter needs secured. As a result, cash hog bids are expected to soften across the Midwest.

OVERNIGHT DEMAN NEWS… Japan purchased 193,383 MT of wheat in its weekly tender, including 139,683 MT of U.S. supplies.


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