First Thing Today (VIP) -- March 6, 2014

March 6, 2014 12:37 AM

Good morning!

Corn and wheat weaker, beans firmer... As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybean futures are 3 to 8 cents higher, SRW and HRW wheat futures are mostly 3 to 5 cents lower and HRS wheat futures are steady to 2 cents lower. The U.S. dollar index is just below unchanged this morning following two-sided trade overnight.

Crimea votes to join Russia... The Crimean parliament voted unanimously today "to enter into the Russian Federation," a move that could (likely will) heighten tensions in the region. A referendum on the situation will take place on March 16. U.S. House members will take up legislation today to help Ukraine in its conflict with Russia by making the country eligible for U.S. loan guarantees. A separate sanctions bill is likely to reach the House floor next week. Meanwhile, heads of the European Union's 28 member states are meeting in Brussels today to discuss the crisis in Ukraine and to consider measures against Russia over its actions in Crimea.
The EU could provide up to $15 billion in financial aid to Kiev over the next few years to help Ukraine break away from Russia.

China focused on GMO research, limiting grain waste... China must increase its research of GMO crops and not let others monopolize this area, as it seeks to build domestic grain production to meet rising demand needs, according to the country's ag minister. He also indicated China will make "appropriate" use of global grain markets but grain imports are not likely to surge. Meanwhile, the director for the State Administration of Grain says the country loses or wastes around 50 MMT of grain annually. He estimates losses due to storage, transportation and processing total 35 MMT, while the rest is lost to food waste. He says food security awareness and improved storage are needed to reduce annual grain waste.

FAO raises global cereal grains forecast, sees smaller 2014-15 wheat crop... The Food and Agriculture Organization of the United Nations (FAO) raised its 2013-14 global cereal grains estimate to a record 2.515 billion MT, up 13 MMT from its previous forecast. FAO's first 2014-15 global wheat forecast is 704 MMT, down 1.7% from 2013-14. Meanwhile, FAO's food price index averaged 208.1 in February, up 5.2 points from January -- the sharpest rise since mid-2012. All categories rose except meats, with sugars and oils leading the price increase last month.

Weekly export sales out this morning... For the week ended Feb. 27, traders expect: corn sales between 600,000 and 850,000 MT; wheat sales between 250,000 and 450,000 MT; soybean sales between 450,000 and 750,000 MT; soymeal sales between 75,000 and 150,000 MT; and soyoil sales between 0 and 30,000 MT.

Cash cattle trade lower... Despite surging boxed beef prices and tighter showlist supplies, cash cattle trade started at $148 in Kansas Wednesday, $2 lower than last week. With futures trading well below that level, the impact of lower cash trade on the market should be limited. But April live cattle futures posted a key bearish reversal yesterday, which could trigger followthrough chart-based selling.

Retailers continue to buy pork... The pork cutout value firmed another $1.12 yesterday and is now within a couple dollars of the all-time high posted last summer. Despite surging prices, movement is showing no signs of slowing as packers moved a strong 482.67 loads of cuts and trim yesterday. Given rising wholesale pork prices and seasonally tightening hog supplies, the cash hog market remains well supported.

Overnight demand news... Taiwan purchased 83,150 MT of U.S. wheat. Japan bought 111,779 MT of wheat in its weekly tender, including 49,979 MT of U.S. supplies.


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