First Thing Today (VIP) -- February 7, 2013

February 7, 2013 12:34 AM
 

GOOD MORNING!

WEAKER TONE IN GRAINS... As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents lower, soybeans are fractionally to 5 cents lower, Chicago wheat is 2 to 6 cents lower, Kansas City wheat is 1 to 3 cents lower and Minneapolis wheat is narrowly mixed. The U.S. dollar index is weaker this morning.

BRAZIL GOV'T FORECASTS RECORD SOY, CORN PRODUCTION...Conab, the supply agency of the Brazilian government, raised its soybean crop forecast to a record 83.4 MMT from 82.7 MMT last month and upped its corn crop outlook to a record 76 MMT from 72.2 MMT in January. Of the corn production estimate, 40.9 MMT is expected to be safrinha (second season) corn, which is planted after soybeans are harvested.

RUSSIA MAY IMPORT GRAIN FOR INTERVENTION STOCKS... Russia may import global grain supplies to replenish government intervention stocks if prices are profitable, Russian Ag Minister Nikolai Fyodorov was quoted as saying in the government daily newspaper Rossiiskaya Gazeta. Fyodorov didn't indicate how much grain could be imported to rebuild government stocks, but says supplies should be no less than 10 MMT. Earlier this week, Russian officials said all grain stocks (held privately and by the government) are likely to dwindle to 7.7 MMT by June 30.

FAO RAISES 2012-13 WORLD CEREAL GRAINS ESTIMATE... The United Nations' Food and Agriculture Organization (FAO) raised its 2012-13 world cereal grains estimate by 20 MMT to 2.302 billion MT. Its world cereal grains stocks forecast for 2012-13 is unchanged from last month at 495 MMT. FAO also said it's expecting "excellent" crops in 2013, but prices could rise "violently" if weather turns negative due to tight supplies. Meanwhile, FAO's world food price index was unchanged at 210 in January. Cereal, meat and sugar prices declined, while oils/fats and dairy prices were higher.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Jan. 31, traders expect: corn sales between 100,000 and 300,000 MT; wheat sales between 300,000 and 500,000 MT; soybean sales between 900,000 MT and 1.3 MMT; soymeal sales between 75,000 and 175,000 MT; soyoil sales between 10,000 and 30,000 MT.

RUBIO TO GIVE REPUBLICAN RESPONSE TO STATE OF THE UNION... President Obama delivers his State of the Union message to a joint session of Congress Feb. 12 and is expected to wade into the issue of climate change as he prepares to lay out the areas he’ll focus on in his second term. Delivering the Republican response will be Sen. Marco Rubio (R-Fla.), a lawmaker some are openly talking about as a potential GOP presidential contender in 2016.

BULLISH CASH CATTLE HOPES... Cattle traders are anticipating steady to firmer cash cattle prices compared with last week's mostly $125 trade in the Plains despite negative cutting margins. But with bids and asking prices several dollar apart, active cash cattle trade may not be seen until Friday.

PORK CUTOUT CONTINUES TO PLUNGE... The pork cutout value was another $1.75 lower Wednesday and has fallen $4.40 so far this week. With pork prices reeling and cutting margins in the red, packer demand for cash hogs has softened. Cash hog bids are expected to remain steady to weaker across the Midwest.

OVERNIGHT DEMAND NEWS... Japan purchased 126,184 MT of wheat from its weekly tender, including 44,841 MT of U.S. supplies. South Korea bought 42,000 MT of Australian milling wheat. Bangladesh tendered for 50,000 MT of optional origin wheat.
 

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