First Thing Today (VIP) -- January 14, 2013

January 14, 2013 12:07 AM


MOSTLY DOUBLE-DIGIT GAINS FOR GRAINS... As of 6:30 a.m. CT, corn futures are trading 11 to 14 cents higher in old-crop contracts and mostly 3 to 4 cents higher in new-crop contracts, soybeans 9 to 20 cents higher, Chicago wheat 12 to 15 cents higher, Kansas City wheat 9 to 15 cents higher and Minneapolis wheat 12 to 17 cents higher. The U.S. dollar index is modestly lower this morning.

THE WEEK AHEAD IN WASHINGTON… The House returns to Congress on today, but will only be in session for three days -- the House GOP will meet in Williamsburg, Va., Jan. 17-18. The Senate is in recess until Monday, Jan. 21, for a joint session of Congress for the inauguration of President Obama. Legislative business will resume Tuesday, Jan. 22. The House today will consider under suspension of the rules legislation intended to improve the response to, and recovery from, Superstorm Sandy and future natural disasters. Separately, the Rules Committee will meet today regarding floor debate the next day on a second Superstorm Sandy supplemental appropriations bill. Ag interests will focus on remarks to the American Farm Bureau Federation meeting in Nashville, Tenn., by USDA Secretary Tom Vilsack.

VILSACK MAY LAY OUT SOME 2013 FARM PROGRAM DETAILS TO FARM BUREAU… When Ag Secretary Tom Vilsack speaks this afternoon at the American Farm Bureau Federation's annual conference, he is expected to announce signup dates and a likely USDA determination that there is a new ACRE signup period, according to Obama administration officials. If so, that could mean existing ACRE participants would not have to stay in the program and could opt out instead. ACRE participants get a 20% reduction in direct payments and a 30% reduction for marketing loan rates. But if there is a delay in farm program signup much beyond February, perhaps into June, sources say, that would mean Senate Ag Chairwoman Debbie Stabenow (D-Mich.) and some Senate Ag Committee staff successfully lobbied Vilsack to hold off pending possible conclusion of a new farm bill, with a potential "retroactive" farm bill start that could, under this unlikely scenario, mean the elimination of direct payments even for 2013 crops. But odds of Congress wrapping up their work that quickly appear low.

DECEMBER SOY CRUSH PACE EXPECTED TO RISE... NOPA members are expected to report soybean crush totaled 161 million bu. last month, based on the average pre-report guess. That would be up from 157.3 million bu. in November and 145.4 million bu. in December 2011. The record for December soybean crush is 164.4 million bushels. Soyoil stocks are guessed at 2.592 billion pounds.

CHINA TO SELL COTTON STOCKS... China plans to sell some of its government cotton stockpile starting today, according to China Cotton Association. The cotton will reportedly be priced at 19,000 yuan ($3,030) per ton and mills will be allowed to buy no more than two months of consumption. There has been no official announcement on additional cotton import quotas, though a trade source told Reuters the government has agreed to allow mills to import 1 MT of cotton for each 3 MT of state reserves they purchase.

NEGATIVE CASH CATTLE EXPECTATIONS... Cattle traders are expecting lower cash cattle prices after the bulk of last week's cash trade came in $2 lower than the previous week and feedlots are thought to have failed to clean up showlists for a second consecutive week. In addition, packers are working with negative margins. Given the premium nearby contracts hold to the cash market, followthrough selling is expected in live cattle futures.

CASH HOGS CALLED MOSTLY STEADY... Packers are expected to open the week with steady cash hog bids at most Midwest locations as they gauge supplies against this week's needs. But given negative cutting margins, some softer bids are possible.

WEEKEND DEMAND NEWS... Vietnam purchased 12,000 MT of Indian corn. Cyprus bought 12,000 MT of Romanian and Bulgarian corn. Algeria tendered for 50,000 MT of optional origin milling wheat.


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