First Thing Today (VIP) -- March 19, 2013

March 19, 2013 01:37 AM


GRAINS MOSTLY FIRMER... As of 6:30 a.m. CT, corn futures are around 4 cents higher in old-crop contracts and fractionally to 1 cent lower in new-crop contracts, soybeans are 2 to 4 cents higher in old-crop contracts and fractionally to 1 cent higher in new-crop contracts, Chicago and Kansas City wheat are 1 to 2 cents higher and Minneapolis wheat is fractionally to 1 cent higher. The U.S. dollar index is just below unchanged this morning.

MAJOR CHINESE IMPORTER TO CANCEL BRAZILIAN BEANS... One of China's largest private soy importers is canceling around 2 MMT of Brazilian soybean shipments due to major congestion and shipping delays at ports. The head of Sunrise Group's soy trade told Reuters his firm will cancel 10 cargoes of Brazilian soybeans that were to have shipped in January/February and another 23 cargoes for April/June shipment. The official did not signal how the firm would replace the canceled cargoes.

RUSSIAN EXPORTABLE GRAIN STOCKS TO REMAIN TIGHT... Russia's exportable grain stocks will remain tight for a second straight year as the Russian government plans to actively replenish intervention stocks, according to SovEcon. The private consulting firm sees exportable grain stocks of 16 MMT for 2013-14 compared to 15.1 MMT in 2012-13. SovEcon forecasts this year's Russian grain crop at 83 MMT to 89 MMT, but says production could fall to the 80 MMT to 84 MMT range if there's unfavorable weather.

SENATE TO PASS STOP-GAP SPENDING BILL TODAY OR TOMORROW; MEAT INSPECTOR AMENDMENT STILL POSSIBLE... The Senate is set today or Wednesday to send continuing resolution (CR) legislation back to the House without controversial changes, upping the odds the stop-gap spending measure will be approved to avoid a government shutdown later this month. The Senate on Monday evening voted 63-35 to limit debate on its version of the bill (HR 933). Prior to the cloture vote Senate Major Leader Harry Reid (D-Nev.) tried to get a unanimous consent agreement for a bill that would have included a few amendments, including one proposed by Sen. Roy Blunt (R-Mo.) that would have shifted $55 million in USDA's budget to avoid meat inspector furloughs. But Reid's request was shot down when senators from both parties insisted their own proposals be included. Blunt will still try to offer his amendment, but it would now need broad bipartisan support to be called up. Some observers say the meat inspector furlough language could be one of these. Of note, the Blunt amendment also could impact furloughs for air traffic controllers.

USDA ADOPTS NEW EXPORT SALES REPORTING REQUIREMENT FOR PORK, SEEKS MORE COMMENTS ON DDG EXPORTS... USDA adopted a final rule requiring all exporters of U.S. pork to report on a weekly basis information on the export sales to the Foreign Agricultural Service (FAS). The rule is effective upon Federal Register publication today. USDA detailed that five comments supported adding pork to the export sales reporting requirements and none opposed it. In a separate notice, USDA is soliciting comments on whether it should require exporters of distillers dried grain (DDGs) to report such information as well. Of the five comments on DDGs, three supported the proposal and two were opposed. With respect to DDGs, USDA said that "both supporters and opponents' views appear to have merit." USDA also noted, "The concerns raised with respect to the potential negative impact that mandatory export sales reporting for DDG would have on the domestic DDG market, especially the view expressed by one of the trade associations that the reporting information may confuse markets and skew domestic prices, justify an additional comment period."

UNINSPIRING START FOR BOXED BEEF MARKET... Boxed beef prices were mixed Monday and packers moved only 132 loads of product on the day. It's the lack of product movement that has traders most concerned as retailers are showing resistance to high prices. Unless product movement dramatically improves, it's unlikely packers will pay steady to firmer cash cattle prices compared with last week's $127 trade in the Plains.

LIMITED DEMAND FOR CASH HOGS... The pork cutout value was 53 cents higher Monday, but that won't be enough to firm up demand for cash hogs as packers are focused on trying to further improve margins. Cash hog bids are expected to trade steady to lower at most Midwest locations again today.

OVERNIGHT DEMAND NEWS... Taiwan tendered to buy 23,000 MT of U.S. corn and 12,000 MT of U.S. soybeans. Bangladesh tendered to buy 50,000 MT of optional origin wheat. India tendered to export 65,000 MT of wheat. Japan is seeking 133,777 MT of wheat in its weekly tender.


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