Firmer tone overnight... As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents higher, old-crop soybeans are 1 to 6 cents higher and new-crop contracts are 5 to 9 cents higher, SRW wheat futures are 4 to 6 cents higher, HRW wheat futures are 2 to 5 cents higher and HRS wheat futures are 4 to 8 cents higher. The U.S. dollar index is weaker this morning.
China cancels South American beans... Reuters is reporting China has canceled 10 cargoes (up to 600,000 MT) of soybean purchases from Brazil and Argentina that were scheduled to ship March through May, according to trade sources. This was widely rumored Wednesday. The sources say Chinese buyers are looking to cancel or delay shipment on another 30 cargoes (up to 1.8 MMT) of soybean commitments because of weak demand and poor crush margins.
Weekly export sales out this morning... For the week ended March 6, traders expect: corn sales between 650,000 and 900,000 MT; wheat sales between 350,000 and 550,000 MT; soybean sales between 125,000 and 400,000 MT; soymeal sales between 100,000 and 200,000 MT; and soyoil sales between 0 and 30,000 MT.
More disappointing Chinese economic data... China's industrial output and retail sales for January and February combined came in lower than expected at 8.6% and 11.8% above year-ago, respectively. Given continued disappointing economic data, speculation is rising that China will need to ease monetary policy to spur economic growth. In his final address at the annual meeting of the National People's Congress, Premier Li Keqiang warned of "severe challenges" China's economy faces this year.
Activist shippers to release report today... A coalition of activist shippers today will unveil an analysis of Surface Transportation Board (STB) data they say will detail the harm to various industries from "soaring" freight rail rates. The study is offered by groups representing factories, farmers, electric utilities and other industry sectors. Railroads counter that such groups represent just a fraction of all customers, and maintain most are largely satisfied with getting service value for their freight fees. Commodity and power plant customers say they are trapped into paying higher "captive shipper" rates to long-haul rail lines. If there is any rail language in the next highway/transit bill, these shippers will want the bill to address competition issues as well, and that will make the legislation that much more complex.
Farm equipment part of focus of bipartisan Senate group leaving today for Ukraine... Ukraine and Russia are major markets for U.S. farm equipment and implements. According to the Association of Equipment Manufacturers, Russia was the ninth largest market for U.S. farm equipment with imports last year of $303 million, down 9% from 2012, and Ukraine was the 10th largest foreign buyer at $269 million, down 30% from 2012. Ukraine, meanwhile, is seen as a potential market for U.S. natural gas exports.
Study finds Zilmax-related deaths higher than Merck reported... Findings by researchers at Texas Tech University and Kansas State University that were published in the scientific journal PLOS ONE show more than 3,800 cattle fed Zilmax died in 2011 and 2012, with 40% to 50% of those deaths attributable to Zilmax. A Reuters review of federal documents showed Merck, the maker of Zilmax, reported 285 Zilmax-related deaths to the Food and Drug Administration since the feed additive was introduced in 2007. Merck said, the findings were "based on observational information and we disagree with them." Feedlots provided data on cattle that were fed Zilmax to the researchers and asked them to analyze it. Researchers acknowledged it's difficult to definitively establish a causal relationship between Zilmax and increased mortality because of the "observational nature" of the data.
Quiet on the cash cattle trade front... There has been very little progress with cash cattle negotiations in the Plains as feedlots are hoping for steady to firmer prices while packers are trying to get animals bought at cheaper prices again this week. Tighter showlist supplies in all but Texas and a return to positive margins favor feedlots. But with the wholesale beef market expected to top soon, packers will be reluctant to raise cash bids.
Pork cutout still rising... The pork cutout value has smashed the previous record set late last June and is showing no signs of slowing down. Despite a $3.04 surge in the cutout value Wednesday, packers moved a strong 414.33 loads of product. Strong demand amid record prices is an indication the pork product market still has "some fuel left in its tank."
Overnight demand news... Japan purchased 126,814 MT of wheat in its weekly tender, including 55,055 MT of U.S. supplies. India is planning tenders to sell another 500,000 MT of wheat in the next month amid rising world prices and expectations for reduced supplies coming from Ukraine.