First Thing Today (VIP) -- July 5, 2013

July 5, 2013 01:37 AM


NO OVERNIGHT TRADE... Grain markets will resume trading at 8:30 a.m. CT coming off yesterday's holiday. Based on non-threatening forecasts and strong gains in the U.S. dollar index overnight, grain/soy markets are expected to open under pressure. Trading volume is expected to be thin today as some traders opted for an extended holiday vacation.

SOUTH KOREA TO LIFT BAN ON U.S. WHITE WHEAT... South Korea is lifting its ban on imports of U.S. western white wheat after finding no GMO content in its testing. The country will continue to test U.S. wheat as imports resume. Meanwhile, Japan says its ban on U.S. western white wheat imports remains intact, though the country has found no GMO content from tests conducted thus far. Japan says it will buy a total 750 MT of SRW and club wheat from the U.S. as an alternative to western white wheat.

JOBS REPORT IN FOCUS... With speculation continuing on when the Fed will begin to phase out its economic stimulus, this morning's jobs report will be dissected closely. Economists polled by Reuters expect the Labor Department to report non-farm payrolls rose by 165,000 last month. The unemployment rate is expected to tick down to 7.5% from 7.6% last month.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For for the week ended June 27, traders expect: corn sales between 250,000 and 500,000 MT; wheat sales between 400,000 and 800,000 MT; soybean sales between 200,000 and 500,000 MT; soymeal sales between 50,000 and 125,000 MT; and soyoil sales between 0 and 10,000 MT.

CHINA RAISES CORN PRICE PAID TO FARMERS... China will pay between 2220 and 2260 yuan (around $360 to $370) per ton to farmers for corn this year in the northeastern provinces of Heilongjiang, Jilin, Liaoning and Inner Mongolia, according to the National Development and Reform Commission. The price is around 6% higher than year-ago. Meanwhile, China has halted wheat stockpiling in the main production province of Henan in an attempt to cool rising domestic wheat prices.

ARGENTINA THREATENS TO CONFISCATE WHEAT... Argentina's government is threatening to confiscate wheat from grain companies if they don't start selling supplies onto the domestic market, according to Argentine media reports citing multiple government officials. The Argentine government is attempting to stop a dramatic rise in domestic bread and flour prices.

OBAMA DIRECTS AGENCIES TO REVIEW AID TO EGYPT... Wheat traders are focused in part on whether or not the Obama administration will keep aid flowing to Egypt. Since the mid-1980s, Congress has placed restrictions on foreign aid to countries where the military has deposed an elected government. After President George W. Bush waived those restrictions to continue sending aid to Pakistan last decade, Congress tightened the language. The Fiscal 2012 omnibus spending law now prohibits foreign assistance to "the government of any country whose duly elected head of government is deposed by military coup d’etat or decree or ... a coup d’etat or decree in which the military plays a decisive role." Humanitarian aid and aid to private groups working in the country is still allowed. The only way the president can restart aid is by certifying a democratically elected government has taken office; there is no waiver. President Obama late Wednesday said he has directed U.S. agencies to review the implications of the military action on U.S. aid to Egypt. "Given [the] developments, I have also directed the relevant departments and agencies to review the implications under U.S. law for our assistance to the Government of Egypt," the statement said. U.S. aid consists mostly of aid to the country's military, but also economic and food aid.

UKRAINE MODESTLY UPS WHEAT CROP FORECAST... Ukraine is forecast to harvest slightly more wheat than previously expected. The country's ag minister now sees wheat production of 20 MMT to 21 MMT from a previous forecast of 20 MMT.

CASH CATTLE TRADE LOWER... Cash cattle trade got started at $119 in Texas and Kansas Wednesday, $1 lower than week-ago. Final sales totals won't be available until today, but it appears sales were moderate at best. Some feedlots held out on sales, hoping to get steady $120 prices for this week's supplies.

CASH HOGS CALLED STEADY... Packers are expected to pay steady prices for cash hogs across the Midwest today. Plants are running larger Saturday kills as they make up for the downtime yesterday due to the holiday.

HOLIDAY DEMAND NEWS... Jordan purchased 50,000 MT of optional origin wheat and 50,000 MT of Ukrainian wheat. South Korea tendered to purchase 20,000 MT of optional origin non-GMO soybeans.


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