First Thing Today (VIP) -- February 24, 2014

06:14AM Feb 24, 2014
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Good morning!

Beans firmer, corn and wheat weaker overnight... As of 6:30 a.m. CT, soybean futures are trading 10 to 12 cents higher in old-crop contracts and around 4 cents higher in most new-crop contracts, while corn futures are 2 to 3 cents lower and wheat futures are 1 to 4 cents lower. The U.S. dollar index is modestly firmer after two-sided trade overnight.

The week ahead marked by Fed’s Yellen testimony… Fed Chair Janet Yellen returns to Congress this week to deliver her second day of Humphrey-Hawkins testimony to the Senate Banking Committee. The original testimony to the Senate was canceled by weather. Key will be whether her testimony shifts from the version delivered to the House earlier this month. Additional economic data will roll out, including an update on fourth quarter 2013 GDP. Also, housing data this week could show additional struggles for that sector. For agriculture, traders will continue to digest USDA data released last week at the Outlook Forum along with watching weather in Plains winter wheat areas and in South America. Any new demand developments will be watched closely, particularly Chinese soybean purchases and/or cancellations. The situation in Ukraine will also be monitored by markets for any potential interruptions for grains and other commodities.

Mixed bag of weather in Brazil... Heavy rains fell across northern production areas of central Brazil over the weekend, temporarily halting harvest efforts and slowing soybean movement to ports and port activity. Meanwhile, lighter but beneficial rains and cooler temps were seen across southern Brazil. More rain is forecast for southern Brazil this week, while conditions are expected to be drier in central Brazil.

California rains in outlook.... Forecasters are noting two Pacific storms are headed for California and are seen bringing some relief to drought-hit areas of the state. Expectations are for the two storms to bring 2 inches of rain to coastal California and several feet of snow to the Sierra Nevada range. "We're not calling it a drought-buster, but it definitely will make a difference," said Jim Bagnall, a meteorologist with the National Weather Service in Hanford, one of many San Joaquin Valley towns where farmers have fallowed crops in anticipation of record-low water supplies. "With these few storms, we could see about an inch total in the valley. So this could obviously have some significant impact."

ADM won't accept Duracade corn... ADM announced Friday it won't accept corn deliveries containing Syngenta's Duracade corn, which is available for commercial use in the U.S. this year, but not yet approved by China or the European Union. Bunge and Cargill have also announced they will not accept Duracade corn, while Gavilon said last week it would take deliveries containing that corn trait.

Japan to raise wheat price for domestic millers... Japan's Ministry of Agriculture will raise the price it sells globally procured wheat to domestic millers by 2.3% starting April 1 due to a sales tax hike. The average sales price will be 58,590 yen ($573) per ton, up from 57,260 yen ($260) per ton.

Bullish cash cattle trade vs. bearish Cattle on Feed Report... Last Friday's Cattle on Feed Report showed all three categories on the negative side of the average pre-report trade guesses, with the Placements figure being the most bearish. Meanwhile, cash cattle traded at $144 to $145 in the Plains, $2 higher than the previous week. As a result, bull spreading is expected in cattle futures to open the week.

Cash hogs called steady/firmer... Amid strong margins, packers are expected to open the week with steady to firmer cash hog bids across the Midwest. While favorable margins give packers incentive to fill up kill lines, the harsh winter weather has made it difficult to get a steady flow of hogs to market.

Weekend demand news... Exporters reported no tenders or purchases.