GRAINS UNDER PRESSURE... As of 6:30 a.m. CT, corn futures are mostly 1 to 3 cents lower, soybeans are 10 to 13 cents lower in old-crop contracts and 3 to 6 cents lower in new-crop contracts, Chicago wheat is 2 to 4 cents lower, Kansas City wheat is 3 to 7 cents lower and Minneapolis wheat is mixed. The U.S. dollar index is sharply higher this morning.
SEQUESTRATION CLOCKS RUNS OUT WITHOUT COMPROMISE; OBAMA, HILL LEADERS MEET TODAY... President Barack Obama is meeting today with congressional leaders to discuss the sequester. With the Senate on Thursday unable to find a way to avoid the across-the-board budget cuts, Obama will sign an order directing government agencies to begin implementing the 85.3 billion in cuts. Most of them will be phased in, due largely to many workers getting at least a 30-day notice of a furlough. White House officials now appear to be on the defensive in defending some of its warnings about the impact of the cuts, which some observers believe are overblown. USDA Secretary Tom Vilsack is one of the Cabinet members leading those warnings in the meat inspection area. Republicans believe a 2.3% cut from a $3.55 trillion federal budget can be absorbed if handled correctly. Others note the 2.3% is applied to only a small part of the budget. And over seven months, not 12. But Sen. Mitch McConnell (R-Ky.), the Republican leader in the Senate, said, "The president is ready to make it bite as hard as possible -- all to send a simple message to the public: 'You want to control Washington spending, America? Fine, let me show you how much I can make it hurt.'" Next steps: Today the White House will notify agencies their budgets have been cut, and how much to cut from each account.. Agencies will begin notifying employees, contractors, and states that spending will contract over the next seven months. In early to mid-March, furlough notices will begin being sent by agencies to many of their employees, warning that unpaid leave could begin in 30 more days. Meanwhile, attention now turns to the next Washington budget deadline, March 27, when the current stop-gap spending measure expires and the government runs out of money.
CHINA TO SELL WHEAT, RAPESEED OIL RESERVES... China will sell 1.285 MMT of wheat and 100,000 MT of rapeseed oil from state reserves between March 6 and 8, according to state-run China National Grain and Oils Information Center. In total, China plans to sell 1 MMT of older rapeseed oil stocks. The wheat sales are an attempt to cool domestic prices, while rapeseed oil stocks are being trimmed prior to the arrival of new-crop supplies.
CHINA'S OFFICIAL PMI PULLS BACK... China's official purchasing managers' index (PMI) dipped to a five-month low of 50.1 in February from 50.4 in January. That signals China's vast manufacturing sector slowed last month, but remains above the contraction threshold (50). Export orders dropped to 47.3 in February from 49.5 in January.
UKRAINE TO RESUME WHEAT EXPORTS IN APRIL... Ukraine is likely to start exporting wheat again in April as the country has about 2 MMT of exportable supplies, according to the Agrarian Confederation of Ukraine. The Ukrainian government put a 6-MMT cap on wheat exports in December to ensure there were plentiful supplies for domestic use, but said it would revisit the supply situation this spring.
WHITE HOUSE TO MEET WITH EU CLIMATE CHIEF... Connie Hedegaard, the European Union’s climate chief, will meet today with top Obama administration officials, including White House aide Michael Froman, the deputy national security adviser for international economic affairs, and Todd Stern, the State Department’s special envoy for climate change. Hedegaard said rejecting the proposed Keystone XL oil sands pipeline would be an "extremely strong signal" of Obama’s intent to address climate change in his second term.
CASH CATTLE TRADE HIGHER... Cash cattle trade got started at $128 in Kansas Thursday afternoon, which was $3 to $5 higher than last week's cash trade in the Plains. But feedlots in other areas of the Plains passed on similar bids in hopes of getting upwards of $130 for this week's supplies as packers are willing to actively raise cash bids.
PORK MARGINS RISE AS CUTOUT CHOPS... Packers have sharply increased margins, which are now deep in the black after being near breakeven at the end of last week, despite choppy price action in the pork product market. Persistent pressure on cash hog bids has greatly improved packers' bottom line, giving them incentive to more aggressively pursue cash hogs next week.
OVERNIGHT DEMAND NEWS... Exporters reported no tenders or purchases.