First Thing Today (VIP) -- January 4, 2012

January 4, 2013 12:27 AM


CHOPPY TRADE OVERNIGHT... As of 6:30 a.m. CT, corn and Chicago wheat futures are narrowly mixed, soybeans mostly 1 to 2 cents higher, Kansas City wheat around 1 cent higher and Minneapolis wheat fractionally to 2 cents higher. The U.S. dollar index is sharply higher this morning.

INFORMA JANUARY CROP REPORTS OUT THIS MORNING... Informa Economics will issue its January crop report at 10:30 a.m. CT. The report will contain production updates for 2012-crop corn, soybeans and cotton.

WEEKLY EXPORT SALES ALSO OUT THIS MORNING... For the week ended Dec. 27, traders expect: corn sales between 200,000 and 350,000 MT; wheat sales between 350,000 and 550,000 MT; soybean sales between 250,000 and 450,000 MT; soymeal sales between 100,000 and 250,000 MT; and soyoil sales between 10,000 and 30,000 MT.

MODEST JOBS GROWTH EXPECTED... The U.S. economy is expected to have added 150,000 non-farm payrolls in December, according to the average guess of economists polled by Reuters. That would be a very modest increase from the 146,000 increase in payrolls reported last month for November, although some estimates are moving higher following a much-stronger-than-expected ADP jobs report for the private sector. The unemployment rate is seen holding steady at 7.7%.

NEW HOUSE RULES FOR 113TH CONGRESS DEAL WITH MEANS TESTING... New rules for the House would require the annual budget resolution to include details on means-tested and non-means-tested mandatory spending programs, including the growth of such programs over the prior 10 years and expected growth in the future, along with proposed reforms to those programs. That will include some farm program payouts. The package also continues rules from the current Congress that maintain a ban on earmarks, require appropriations bills to include a "spending reduction account" through which members could use floor amendments to reduce the size of spending bills, and replace the House’s "pay-as-you-go" rule with a "cut-as-you-go" rule that eliminated the requirement that the cost of tax cuts be offset and required instead that legislation increasing mandatory spending be offset through cuts to other mandatory programs.

CHINA CONSIDERING MORE COTTON IMPORT QUOTAS... China is reportedly mulling a proposal that would require mills to buy 3 MT of cotton from state reserves for every 1 MT they import if the government issues additional cotton import quotas, as textile mills are requesting. Any concession by the Chinese government on cotton import quotas would likely be low volume, as government stocks are thought to be equal to about one year's use. It's unclear if the quotas would be duty-free or on a sliding tariff scale.

WAITING ON CASH CATTLE TRADE... Cash cattle bids and asking prices remain far apart and packers are so far showing little interest in acquiring supplies this week. As a result, active cash cattle trade is not expected in the Plains until late today and there's a solid chance not all of this week's showlist will be cleaned up, especially if packers don't offer steady to firmer prices compared with last week's $127 trade.

CASH HOGS CALLED MOSTLY STEADY... Packers have paid steady to firmer prices for cash hogs the past two days, but with cutting margins well below breakeven, demand for cash hogs is likely to be limited to close out the week. As a result, cash sources are expecting cash hog bids to be steady at most Midwest locations today.

OVERNIGHT DEMAND NEWS... South Korea purchased 69,000 MT of U.S. or South American corn, but passed on tenders for 55,000 MT of corn and 70,000 MT of corn. South Korea also purchased 20,000 MT of Indian soymeal, 55,000 MT of South American soymeal and 60,000 MT of South American feed wheat.


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