First Thing Today (VIP) -- February 25, 2013

February 25, 2013 12:37 AM


CORN AND WHEAT MOSTLY LOWER, BEANS FIRMER... As of 6:30 a.m. CT, corn futures are steady to 2 cents lower, soybeans are 3 to 6 cents higher, Chicago and Kansas City wheat futures are 3 to 5 cents lower and Minneapolis wheat is mixed. The U.S. dollar index is under pressure to start the week.

SEQUESTRATION EFFORTS AND BERNANKE TESTIMONY BEFORE CONGRESS THE FOCUS IN WASHINGTON... Both the House and Senate return, with the key focus being Senate attempts to avoid the March 1 sequester (across-the-board budget cuts), which will likely take a while to reach a compromise between the various players, including the White House. Meanwhile, Federal Reserve Chairman Ben Bernanke will appear before Senate (Tuesday) and House (Wednesday) panels on the economic outlook and monetary policy. Senate Finance on Tuesday examines the Congressional Budget Office's budget and economic outlook. The Senate Ag panel on Wednesday holds an oversight on the Commodity Futures Trading Commission. On Tuesday, a House subcommittee hearing focuses on ethanol blends. On the ag report front, data from USDA will include the monthly update on food prices along with the weekly update on exports.

SOUTH AMERICAN UPDATE... Dry areas of Argentina got scattered rains over the weekend, but the forecast is mostly dry through Friday. There is a chance for rains for central Argentina during the weekend. Meanwhile, scattered rains are in the forecast for southern Brazil the bulk of this week. The other focus in South America is on soybean shipments. Brazilian port workers have called off Tuesday's planned work stoppage, but there are still concerns about the pace of soybean shipments from the country.

CHINA'S MANUFACTURING SECTOR PULLS BACK IN FEBRUARY... China's HSBC flash purchasing managers' index (PMI) slipped to a four-month low of 50.4 in February from a final reading of 52.3 in January. While the data signals China's vast manufacturing sector eased this month, the preliminary PMI reading was still in the expansion range (above 50). However, the export orders sub-index slipped to 49.8, signaling the biggest challenge for China's manufacturing sector remains exports.

BULL SPREADING LIKELY IN CATTLE FUTURES... Last Friday's Cattle on Feed Report showed Marketings and Placements above the average pre-report guesses and up from year-ago, while On Feed was in line with expectations and down 6% from year-ago. In addition, cash cattle traded $2 higher at $125 in Kansas and Nebraska late Friday. The report data and late cash trade should support bull spreading in cattle futures to open the week.

CASH HOGS CALLED STEADY/LOWER... Packer demand for cash hogs is expected to be light as most plants are thought to be well bought ahead on slaughter needs for the week. Plus, packers are trying to strengthen margins. As a result, cash hog bids are expected to open the week steady to weaker across the Midwest.

WEEKEND DEMAND NEWS... South Korea purchased 69,000 MT of corn (likely South American) and 50,000 MT of Indian feed wheat. Jordan tendered to buy 100,000 MT of optional origin milling wheat. India tendered to sell 75,000 MT of wheat.


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