First Thing Today (VIP) -- March 21, 2013

March 21, 2013 01:46 AM
 

GOOD MORNING!

SOYBEANS ENJOY FOLLOWTHROUGH BUYING... Corn futures faced light profit-taking overnight and are currently around 1 to 3 cents lower in old-crop futures and narrowly mixed in new-crop contracts. Soybeans enjoyed followthrough buying after yesterday's high-range close and are currently 4 to 9 cents higher. Wheat futures are a mixed bag with Chicago down 6 to 7 cents, Kansas City mixed and Minneapolis down 1 to 5 cents. The U.S. dollar index is chopping around unchanged this morning.

CYPRUS GIVEN MONDAY DEADLINE...Emergency funding from the European Central Bank (ECB) to Cyprus will be cut off unless the island nation works out bailout package with the International Monetary Fund and European Union by Monday, the ECB said today. Meanwhile, the Cypriot Finance Minister is currently in Moscow seeking to work out a deal for Russian investment in Cypriot banks and a loan extension. The Cyprus situation has dampened European stock markets this morning along with somber economic data for the eurozone.

HOUSE TODAY WILL CLEAR SENATE VERSION OF FY 2013 SPENDING BILL INCLUDING MONEY TO AVOID MEAT INSPECTOR FURLOUGHS... The issue will soon be settled regarding funding to thwart USDA halting of meat inspectors relative to budget sequestration. The Senate on Wednesday included the necessary funding and the House today will approve the Senate version of the spending bill that funds government departments and agencies through September. The Senate backed an amendment that effectively reverses the effect of the sequester for USDA's Food Safety and Inspection Service (FSIS). With some $55 million taken from other USDA accounts, the amendment should prevent forced unpaid leaves of inspectors that would force shutdown of meat and poultry plants. The Senate bill also keeps provisions to revoke USDA rules designed to better protect poultry farmers who raise chickens under contract and to empower the Agriculture Department to allow farmers to plant and harvest genetically modified crops while those are under court challenge.

HOUSE PANEL EXAMINING RFS, STARTING WITH ETHANOL BLEND WALL...The House Energy and Commerce Committee has embarked on an examination of the Renewable Fuels Standard (RFS). The first area the panel is looking at is the issue of the blend wall for ethanol. They released a white paper examining the issue and are seeking public feedback by April 5 on the matter.

CHINA'S MANUFACTURING SECTOR IMPROVES IN MARCH... China's manufacturing sector improved in March, according to the HSBC purchasing managers' index (PMI). The preliminary PMI reading rose to 51.7 in March from 50.4 in February. Readings above 50 signal expansion in the manufacturing sector.

CHINA TO SELL MORE THAN 1 MMT IN SOYBEAN RESERVES TO AID CRUSHERS... China plans to sell between 1 MMT and 1.5 MMT of state soybean reserves to soybean crushers as shipping delays in Brazil have caused monthly soy imports to lag crushing demand. China is expected to import less than 4 MMT for the months of March and April, which compares to normal crush use of 5 MMT a month. These reserve stocks will eventually need to be replenished with imports from South America or the United States.

RUSSIAN GRAIN EXPORTS LAG YEAR-AGO BY 32%... Russia's grain exports through March 13 totaled 13.962 MMT, which is down 32% relative to year-ago, according to the Russian ag ministry. The ministry currently forecasts grain exports of 15.5 MMT, but the ministry now says it may trim its estimate to 14 MMT due to a slower pace of exports.

UKRAINE'S HEAD METEOROLOGIST SEES WINTER WHEAT PRODUCTION RISING OVER YEAR-AGO... Ukraine's winter wheat harvest for 2013 may total 18 MMT to 19.5 MMT thanks to favorable weather, says the head of the state weather forecasting center's ag department. This compares to production of 14 MMT in 2012.

INFORMA TO UPDATE 2013 ACREAGE ESTIMATES TOMORROW... Informa Economics will update its 2013 acreage estimates at 10:30 a.m. CT on Friday. These projections are based on the firm's early March survey and will include U.S. production implications for the 2013 crop year.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended March 14, traders expect: corn sales between 300,000 and 600,000 MT; wheat sales between 800,000 and 1.1 MMT; soybean sales between 600,000 and 800,000 MT; soymeal sales between 50,000 and 150,000 MT; and soyoil sales between 0 and 15,000 MT.

BOXED BEEF VALUES SOFTER, BUT MOVEMENT PICKS UP... Choice boxed beef values slipped 77 cents and Select declined by 62 cents yesterday, but the good news is movement improved to 195 loads. Light cash cattle trade in the Southern Plains was reported yesterday at $125, which is down $1 to $2 from the previous week and is expected to set the tone for remaining sales.

PORK CUTOUT VALUES SLIP SHARPLY... Thanks to sharp price declines in loins and hams, pork cutout values slipped $2.03 yesterday to trim packers' profit margins. The softer tone in the pork market heightens concerns about demand and is expected to result in $1 lower cash hog bids this morning.

OVERNIGHT DEMAND NEWS... Taiwan Sugar Corp. rejected all offers in a tender for 23,000 MT of U.S. corn and 12,000 MT of U.S. soybeans, citing high prices. Japan purchased 132,777 MT of milling wheat from the U.S., Canada and Australia.

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