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

June 10, 2013 01:18 AM


PRICE PRESSURE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 5 to 7 cents lower, soybeans are 7 to 14 cents lower, Chicago and Kansas City wheat are 3 to 4 cents lower and Minneapolis wheat is mostly around 1 cent lower. The U.S. dollar index is firmer this morning.

WARMER, DRIER FORECAST... Conditions are expected to be warmer and drier across the Corn Belt this week, though the forecast is not void of rain chances. Traders view the forecast as price-negative many producers will be able to get back into fields and the improved weather should give crops a boost.

FARM BILL AND IMMIGRATION REFORM DEBATE FOCUS OF CONGRESS THIS WEEK; USDA CROP REPORTS WEDNESDAY... A final farm bill vote in the Senate, immigration reform debate in the Senate and a House debate of the Defense Dept. authorization bill are the key items on the agenda this week. The Senate will complete consideration of the five-year farm bill (S 954). There will be at least two votes on the bill. The first vote, scheduled for 4:30 p.m. CT today, will be on an amendment offered by Sen. Patrick Leahy (D-Vt.) regarding internet projects in rural areas. The second vote will be on final passage of the bill. Additional votes could occur if senators reach agreement on a package of amendments. Immigration reform legislation (S 744) will take the bulk of the Senate's time this week. The bill would revamp the nation's immigration system, and allow millions of undocumented aliens a path to citizenship. USDA will update its old- and new-crop Supply & Demand tables and release its second winter wheat production estimate on Wednesday.

ARGY FARMERS PLANNING STRIKE... Argentine farmers are planning to announce on Tuesday at least a week-long strike in protest of government ag policies, according to the head of a major farmer group in the country. Farmers will reportedly halt grain sales during coordinated the strike.

CHINESE MAY SOY IMPORTS RISE IN APRIL, BUT DOWN FROM YEAR-AGO... China imported 5.1 MMT of soybeans in May according to official customs data, up 28.1% from April but down 3.4% from year-ago. Soybean imports the first five months of this year totaled 20.57 MMT, down 12.2% from year-ago.

CHINESE ECONOMIC DATA SPARKS GROWTH CONCERNS... China amassed a $20.4 billion trade surplus in May, but exports rose only 1% and imports dipped 0.3%, sparking concerns about domestic and foreign demand. On the inflation front, China's consumer price index (CPI) came in 2.1% above year-ago last month as food prices rose 3.2% and non-food prices firmed 1.6%. Meanwhile, industrial output rose 9.2% and retail sales increased 12.3%. Overall, the data was mostly negative, triggering concerns about economic growth. .

CHINA APPROVES MORE ARGY GMO SOYBEANS AND CORN... China has approved the import of three additional GMO strains of soybeans and one strain of GMO corn from Argentina, according to Argentina's ag minister. This paves the way for increased soybean and corn trade between the countries.

UKRAINE GRAIN PRODUCTION FORECAST TO RISE SHARPLY... Ukraine is expected to produce a grain crop of 53 MMT to 54 MMT, up from 46.2 MMT last year, based on the first official forecast from the ag ministry. The state weather forecasting center says conditions are favorable for grains in eastern and southern production regions.

STABENOW RAISES CONCERNS ABOUT CHINESE BID TO BUY SMITHFIELD FOODS... Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) raised several questions about a Chinese bid by Shuanghui International to buy Smithfield Foods. "This is the largest sale of a company in the United States to a Chinese state-owned enterprise," Stabenow said in an interview that aired Sunday on C-SPAN's Newsmakers. While having several concerns about the deal at this point, she declined to oppose it outright. Stabenow raised the possibility that the Chinese entity might cause problems for the U.S.-Japanese pork trade. "Pork producers are dependent upon exports, and so I totally understand that. My concern is our biggest export market in the U.S. is Japan, right next door to China. So, what happens when you have a Chinese company now owning [Smithfield]," Stabenow said during the interview. "Do we know that they will always be exporting from America, or are they going to be exporting from China and our pork producers lose their largest market, which is Japan?" she asked. Stabenow will push for the Committee on Foreign Investment, the Treasury-led group that reviews purchases of U.S. companies by foreign entities, to include representation from USDA and the Food and Drug Administration, given that the acquisition might affect food security. Later in the interview, Stabenow said, "Frankly, I would encourage someone else -- an American company -- to bid so there were options."

BOXED BEEF PRICES FALLING... Boxed beef values were sharply lower Friday and Choice prices have now retreated nearly $10 from the all-time high. But while prices are falling, Choice boxed beef is still above $200. Cattle traders are closely watching the product market to see how far prices must fall to attract enough demand to signal a low is close.

CASH HOGS CALLED STEADY/FIRMER... Packers are expected to open the week with steady to firmer cash hog bids. While cutting margins are negative, market-ready hog supplies are tight and plants are short-bought on slaughter needs for the week.

WEEKEND DEMAND NEWS... Iraq tendered for at least 50,000 MT of optional origin wheat. South Korea tendered to buy 140,000 MT of U.S., South American, South African or eastern European corn.


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