First Thing Today (VIP) -- February 11, 2013

February 11, 2013 12:36 AM
 

GOOD MORNING!

FOLLOWTHROUGH SELLING IN SOYBEANS... Soybean futures are extending last Friday's sharp losses this morning, providing spillover pressure to corn and wheat. As of 6:30 a.m. CT, corn futures are trading 1 to 4 cents lower, soybeans are 14 to 19 cents lower, Chicago wheat is 1 to 3 cents lower, while Kansas City and Minneapolis wheat are mixed with a downside bias. The U.S. dollar index is anchored near unchanged this morning.

PRESIDENT OBAMA'S STATE OF UNION ADDRESS TUESDAY HIGHLIGHTS WASHINGTON EVENTS... President Obama's State of the Union address Tuesday evening before a joint session of Congress will likely focus on jobs, a call to avoid the March 1 sequester/across the board cuts, a push for comprehensive immigration reform, continued support for renewable energy and additional action regarding climate change. USDA today releases its annual long-term baseline projections, along with a farm income update. Congressional hearings this week include a nomination hearing for a new Treasury Secretary and a Thursday Senate Ag panel hearing on natural disasters. The Congressional Budget Office director will appear before the Senate and House regarding the budget and economic outlook.

NCC SURVEY: COTTON ACREAGE TO FALL 26.8%... The National Cotton Council's (NCC) annual survey signals U.S. producers plan to seed only 9.01 million acres to cotton this year, which would be down 26.8% from last year if accurate. More than half of the planned acreage decline will be seeded to corn, with the remainder going to soybeans (many double-crop soybeans after wheat), according to the survey. Assuming harvested acres of 7.65 million and "state-level yield assumptions," NCC projects the 2013 U.S. cotton crop at 12.86 million bales versus production of 17.01 million bales in 2012.

CHINA CONFIRMS TWO HUMAN CASES OF BIRD FLU... China's Ministry of Health says two humans in the southwest city of Guiyang have tested positive for the H5N1 bird flu virus, according to reports by state-run Xinhua news agency. The H5N1 virus mainly affects birds, but Xinhua reports the two individuals did not have contact with any form of fowl before being stricken.

LESS MONEY IN PROPOSED EU BUDGET FOR AGRICULTURE... In a sign of things to come in the U.S., there will be some major shifts in the bloc's spending priorities under the new deal. Less money will go to direct subsidies for farmers: €277 billion compared with €337 billion in the last budget. Farm subsidies will continue its biggest share of the European Union’s budget to 2020, despite a 13% drop in future agricultural spending. Farm subsidies will consume some 38% of the EU budget for 2014-2020, equivalent to 363 billion euros ($485.7 billion) of the 960 billion total, or around 50 billion euros per year. That is still a major reduction compared with the 417 billion euros earmarked for farming under the current seven-year budget. The deal still must be passed by the European Parliament, which has argued for a more expansive budget.

BOXED BEEF MARKET STILL SEARCHING FOR A LOW... Boxed beef prices firmed early last week, suggesting the market may have found a short-term low. But after a late-week slump, Choice boxed beef prices ended last Friday 44 cents lower than the week prior. As a result, traders are still waiting on solid signs the product market has put in a low. Until that happens, buying interest in cattle futures will be limited.

CASH HOGS CALLED STEADY/WEAKER... Packers are expected to open the week offering steady to weaker cash hog bids compared to last Friday's prices. With cutting margins buried deep in the red, some plants are expected to reduce kill hours instead of actively competing for market-ready hog supplies with firmer cash bids.

WEEKEND DEMAND NEWS... Bangladesh purchased 50,000 MT of optional origin wheat. India tendered to export 30,000 MT of wheat.

 

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