First Thing Today (VIP) -- March 3, 2014

March 3, 2014 12:05 AM

Good morning!

Bulls dominate overnight trade... As of 6:30 a.m. CT, corn futures are trading mostly 8 to 13 cents higher, soybeans are 5 to 13 cents higher in old-crop contracts and 1 to 3 cents higher in new-crop contracts, while wheat futures are 15 to 24 cents higher. The U.S. dollar index is firmer this morning.

Ukraine/Russia tensions rise... Wheat and corn futures are sharply higher to start the week as tensions in the Black Sea region escalated over the weekend. Russia moved troops into the Crimean peninsula and naval ships around the port at Sevastopol, causing Ukraine to step up its military presence in the region. Traders feel rising tensions will slow grain movement out of the Black Sea region and increase demand for U.S. grains.

Weather woes, Ukraine/Russia and budget proposals focus in Washington this week... Inclement weather has shuttered government offices and forced changes in today's congressional schedule. Due to poor weather conditions affecting travel, neither chamber will hold votes today. Before the Ukraine crisis and Russian President Putin's aggressive steps, the week ahead's key topic was going to be President Obama's proposed spending plan for Fiscal 2015, to be unveiled Tuesday. Both the House and Senate Budget committees have set hearings for Wednesday to pore over its details. But look for lawmakers from both political parties to focus on Ukraine, in an effort to try to find the right policy response for the United States and working with allies. The House Foreign Affairs Committee on Thursday will convene a hearing to examine the recent events in Ukraine and the next steps forward for U.S. foreign policy in the region. On the nomination front, the Senate will consider several CFTC and Federal Reserve nominees.

Ministry mildly revises up Chinese February soy imports... China's Ministry of Commerce now pegs the country's February soybean imports at 5.05 MT, up modestly from its prior forecast of 5 MMT. Official customs data for February soybean imports will be released soon. The ministry forecasts March soybean imports will drop to 3.49 MMT.

China's manufacturing sector slows... As expected, China's manufacturing sector slowed last month amid declines in domestic and export demand. The official purchasing managers index (PMI) dipped to an 8-month low of 50.2 from 50.5 in February. Meanwhile, private firm HSBC's final PMI for February dropped to 48.5 from a final reading of 49.5 in January.

Bullish cash cattle hopes... Coming off last week's record cash cattle trade in the Plains, traders are anticipating more strength this week. But the key to whether packers continue to chase after tight market-ready supplies with higher cash cattle bids may depend on the wholesale beef market as packer margins are deep in the red.

Cash hogs called steady/firmer... Packers are expected to open the week offering steady to firmer bids for cash hogs as they work to get hogs to town. Bitterly cold temps and snow-covered roads will slow hog movement is some areas and most plants are in need of supplies from mid-week forward.

Weekend demand news... Exporters reported no tenders or purchases.


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