First Thing Today (VIP) -- January 8, 2013

January 8, 2013 12:37 AM
 

GOOD MORNING!

CORN AND BEANS WEAKER, WHEAT FIRMER THIS MORNING... As of 6:30 a.m. CT, corn futures are trading fractionally to 3 cents lower, soybeans fractionally to 1 cent lower in most contracts, Chicago wheat fractonally to 3 cents higher, Kansas City wheat 2 to 5 cents higher and Minneapolis wheat 2 to 3 cents higher. The U.S. dollar index is modestly weaker this morning.

THINK-TANK STUDY: DEFAULT COULD BEGIN LATE FEBRUARY IF CONGRESS DOES NOT ACT... The Bipartisan Policy Center released a report projecting the federal government would exhaust its borrowing authority by the end of February, if not sooner, with major consequences if Congress does not prevent a default. The Washington think-tank predicted the government will begin defaulting on some of its obligations sometime between Feb. 15 and March 1, according to its latest study of how much money is expected to flow in and out of the U.S. Treasury in the coming weeks. The U.S. reached its debt limit on Dec. 31, but the Treasury Department is taking what it calls "extraordinary measures" to prevent a default. Congressional Republicans are demanding large spending cuts or changes to entitlement programs in exchange for lifting the debt ceiling, something President Barack Obama has rejected.

UKRAINE WINTER GRAINS UPDATE... Ukraine's winter grains crops are rated much better than year-ago. Still, 12% of the country's winter grains crop is underdeveloped and vulnerable to winterkill, according to the state weather forecaster. Much of the crops at risk are in the eastern regions.

CASH CATTLE UNCERTAINTY... Feedlots are hoping to get firmer prices for cattle this week. But with showlists thought to be higher than week-ago and cutting margins in the red, packers may be reluctant to raise cash cattle bids again this week. The deciding factor may be the boxed beef market. Boxed beef prices were mixed Monday (Choice cuts down 77 cents and Select cuts up 38 cents), while movement was strong at 207 loads to start the week.

CASH HOGS SEEN MOSTLY STEADY... While cutting margins are in the red, packer demand for cash hogs is expected to be strong enough to keep cash hog bids steady at most Midwest locations again today. Most pork plants are still in need of slaughter supplies for the second half of the week. Once this week's slaughter supplies are secured, packer demand for cash hogs is expected to weaken.

KOREAN BUYERS SHYING AWAY FROM INDIAN WHEAT... South Korean feedmakers are turning to South American feed wheat to fill needs as they are concerned with the amount of foreign matter in shipments of Indian wheat. While prices have dropped sharply over the past month, U.S. wheat is still priced above others on the global market.

OVERNIGHT DEMAND NEWS... South Korea purchased 68,000 MT of South American corn, 69,000 MT of U.S. or South American corn and 110,000 MT of optional origin corn. Israel tendered for 135,000 MT of corn, 5,000 MT of feed barley and 5,000 MT of sorghum -- all optional origin (likely South American). Israel also tendered for 50,000 MT of optional origin feed wheat. Taiwan tendered for 23,000 MT of U.S. corn and 12,000 MT of U.S. soybeans.

 

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