CORN LOWER, BEANS AND WHEAT MILDLY FIRMER... Price action is light as traders wait on USDA's February Supply & Demand Report later this morning. As of 6:30 a.m. CT, corn futures are trading fractionally to 1 cent lower, soybeans are mostly 2 to 4 cents higher and wheat futures are 1 to 3 cents higher at all three exchanges. The U.S. dollar index is under pressure this morning.
USDA EXPECTED TO FINE-TUNE S&D TABLES... Traders are anticipating very few changes to USDA's Supply & Demand tables in this morning's report that will be released at 11 a.m. CT. The average pre-report guesses put corn ending stocks at 615 million bu. (602 million bu. in January), soybean carryover at 129 million bu. (135 million bu. last month) and wheat ending stocks at 728 million bu. (716 million bu. in January). USDA will also update global production estimates, with South American corn and soybean crop projections the focal point, although USDA is seen playing catchup to most private production forecasts.
UPBEAT CHINESE ECONOMIC DATA... China's consumer price index was up 2% compared to year-ago in January, which was in line with expectations and down from a 2.5% rise in December. Food prices rose 2.9% versus year-ago, while non-food prices were 1.6% higher. On the trade front, China's January trade surplus narrowed to $29.2 billion from $31.6 billion in December, easily besting expectations. Chinese exports rose 25% last month, while imports were 28.8% higher.
CHINESE JANUARY SOY IMPORTS DOWN FROM DECEMBER, BUT UP FROM YEAR-AGO... China imported 4.78 MMT of soybeans in January, according to official customs data. That's down 18.8% from December imports, but 3.8% higher than year-ago. China is expected to import a record amount of soybeans this year.
INDIA REVISES PRODUCTION ESTIMATES... India's 2012-13 wheat crop is expected to slide 2.7% to 92.3 MMT, while total grain production is seen down 3.5% at 250.14 MMT. India had record wheat and total grain production in 2011-12. Despite the reduced production forecasts, traders don't feel this will limit India's efforts to aggressively sell wheat onto the world market as government stocks are well above "required" levels.
'OLDER' U.S. BEEF READY TO BE SHIPPED TO JAPAN... U.S. beef from animals under 30 months of age is ready to be shipped to Japan for the first time since 2003. Philip Seng, head of the U.S. Meat Export Federation says, "All the rule making and procedures needed to comply are done and USDA is signing export certificates for the product. The impact is immediate, it's just a question of how fast it can ramp up."
STILL WAITING ON CASH CATTLE TRADE... Cash cattle bids and asking prices remain a couple dollars apart in the Plains, with feedlots seeking higher prices while packers are trying to get animals bought cheaper than last week. While cattle traders believe cash cattle trade will eventually be seen at steady to higher prices compared with last week's mostly $125 trade in the Plains, nearby futures already carry a premium to the cash market. That limits upside potential in futures unless cash trade comes in even stronger than anticipated.
PORK PLUNGE CONTINUES... The pork cutout value was another 72 cents lower Thursday, though losses weren't as widespread through the cuts as recent days. Also, pork movement has topped 100 loads the past three days, suggesting the sharply lower prices are attracting demand. While there are some hints a short-term low may be close, the cutout value must stop sliding before traders are confident a low is in place.
OVERNIGHT DEMAND NEWS... South Korea purchased 46,800 MT of U.S. wheat in two separate tenders. Vietnam bought 20,000 MT of Indian corn. Japan tendered for 63,000 MT of milling wheat, 27,000 MT of food-grade barley and 5,000 MT of malting barley.