First Thing Today (VIP) -- January 10, 2013

January 10, 2013 12:17 AM


MIXED TO FIRMER THIS MORNING... As of 6:30 a.m. CT, corn futures are trading steady to 2 cents higher, soybeans narrowly mixed, Chicago wheat 4 to 6 cents higher, Kansas City wheat 1 to 6 cents higher and Minneapolis wheat 2 to 5 cents higher. The U.S. dollar index is under pressure this morning.

China imported a record 58.38 MMT of soybeans in 2012, an 11.2% increase from 2011, according to official customs data. For December, Chinese soy imports totaled 5.89 MMT, a 42% increase from November and 9% higher than year-ago. Chinese soy imports are expected to grow this year as crush capacity is higher and there's a growing appetite for edible oils and soybean meal for feed.

CHINA'S TRADE SURPLUS SURGES IN DECEMBER... China's trade surplus swelled to $31.6 billion in December, which was up sharply from a surplus of $19.6 billion in November and nearly $12 billion above expectations. Chinese exports surged 14.1% versus year-ago last month, while imports were up 6.0%. China's customs agency says there are some uncertainties for the year ahead, mainly in Europe, but it expects the trade situation to generally improve from this year.

USDA DESIGNATES NEARLY 600 COUNTIES DISASTER AREAS DUE TO DROUGHT... USDA has declared 597 counties in 14 states disaster areas due to drought, with many of the states in Plains HRW wheat areas and the South. The declarations reflect drought conditions that continue to grip several areas of the country based on the weekly Drought Monitor. In 2012, USDA designated 2,245 counties in 39 states as disaster areas due to drought, or 71% of the United States.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Jan. 3, traders expect: corn sales between 100,000 and 200,000 MT; wheat sales between 325,000 and 425,000 MT; soybean sales between 200,000 and 400,000 MT; soymeal sales between 75,000 and 175,000 MT; and soyoil sales between 35,000 and 65,000 MT.

ONLY LIGHT CASH CATTLE TRADE SO FAR... Light cash cattle trade was seen in Nebraska yesterday at steady prices with week-ago, following similar light trade in Texas Tuesday. Most feedlots are still holding out hope for higher cash cattle prices, however, while packers are reluctant to raise cash bids again this week amid negative cutting margins.

CASH HOGS CALLED STEADY/LOWER... Cash hog bids softened yesterday and are expected to be steady to weaker again today. Most pork plants have near-term needs covered and are hoping to improve negative cutting margins. The weakening cash market weighed heavily on lean hog futures yesterday.

JBS BUYS CANADIAN PLANT INVOLVED IN BEEF RECALL... JBS SA said it will buy the XL Foods plant in in Brooks, Alberta that was involved in the beef recall last year, along with other Canadian assets. The company has been managing that plant since October. JBS also said it is awaiting a review by the U.S. before it exercises an option to buy the U.S. operations of XL Foods, primarily an Omaha, Nebraska, beef processing facility.

OVERNIGHT DEMAND NEWS... Taiwan purchased 23,000 MT of U.S. corn and 12,000 MT of U.S. soybeans. South Korea canceled a tender for 55,000 MT of optional origin corn. Egypt tendered for optional origin wheat. Results of that tender will be known this morning. Bangladesh tendered for 50,000 MT of optional origin wheat.


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