First Thing Today (VIP) -- March 8, 2013

March 8, 2013 12:33 AM
 

GOOD MORNING!

CORN AND BEANS FIRMER, WHEAT MOSTLY WEAKER... As of 6:30 a.m. CT, corn futures are trading 2 to 5 cents higher, soybeans are fractionally to 2 cents higher, Chicago and Kansas City wheat are mostly 1 to 3 cents lower and Minneapolis wheat is narrowly mixed. The U.S. dollar index is firmer this morning.

MINOR FINE TUNING EXPECTED IN S&D REPORT THIS MORNING... USDA is expected to do little more than tweak some of its usage projections in the Supply & Demand Report. Based on the average pre-report guesses, corn carryover is expected at 649 million bu., soybean ending stocks at 122 million bu. and wheat carryover at 713 million bushels. Traders will also be closely watching USDA's South American production forecasts.

NON-FARM PAYROLLS EXPECTED TO BE ABOUT STEADY... Economists polled by Reuters expect this morning's jobs report to show 160,000 non-farm payrolls were added in February. That would be up modestly from initial reportings of 157,000 jobs added in January. The unemployment rate is expected to hold steady at 7.9%.

CHINESE FEBRUARY SOYBEAN IMPORTS DROP SHARPLY... China imported 2.9 MMT of soybeans last month, according to official customs data, which was down 39.3% from January and 24.3% lower than year-ago. Through the first two months of this year, Chinese soybean imports stand at 7.68 MMT, down 9% from year-ago. Meanwhile, state-run China National Grain and Oils Information Center says Chinese port stocks of soybeans have tightened to 4.5 MMT.

CHINA'S TRADE SURPLUS NARROWS, BUT BEATS EXPECTATIONS... China's trade surplus narrowed to $15.25 billion in February from $29.15 billion in January. Traders were expecting China to show a trade deficit for last month. February exports rose 21.8% from year-ago, while imports dropped 15.2%. Traders are encouraged by the stronger-than-expected exports figure, as that's the primary concern with China's economy given economic uncertainties with its two largest customers -- Europe and the United States.

OBAMA BUDGET DATE NOW SLIPS INTO EARLY APRIL... By law, President Obama was supposed to offer his budget proposals for Fiscal Year 2014 (which begins Oct. 1) on the first Monday in February, which this year was Feb. 4. Sequester and other-related budget issues pushed that date to March 25. Now the Pentagon is telling congressional committees that April 8 is the new target date. Congress begins its Easter break on March 25 and will return April 8. Budget panels in the House and Senate will mark up their budget resolutions next week, with consideration of the resolutions in the third week of March, just before the recess. Deadline for the House and Senate to agree on a joint budget resolution is April 15. Meanwhile, Obama wants to complete a grand bargain to reduce the deficit by the end of July, according to some GOP senators who dined with him earlier this week.

U.S. AG TRADE SURPLUS SHRINKS… The value of US ag exports was put at $13.025 billion in January against imports of $8.915 billion to result in a trade surplus of $4.110 billion. That pushed the FY 2013 value for exports to $55.007 billion and imports to $33.908 billion, leaving an ag trade surplus of $21.098 billion. The value of U.S. ag exports and the trade surplus has declined each month this fiscal year. That’s not overly surprising given the record levels reached in those two categories the first month of the fiscal year -- October 2012.

BOXED BEEF PRICES CONTINUE TO CHARGE HIGHER... Boxed beef prices were another 29 to 82 cents higher Thursday to continue the recent price surge. But product movement has been noticeably lacking during the price rally, signaling retailer resistance to the higher prices. The product market price strength has pushed packer margins into the black, however, which should make them more willing to raise cash cattle bids moving forward, especially given tightening supplies.

STILL LOOKING FOR A LOW IN PORK PRODUCT MARKET... Pork product movement has picked up this week, but it's come amid falling pork prices. The cutout value was another 50 cents lower Thursday. Until the product market signals a short-term low, buying interest in lean hog futures will be limited to short-covering.

OVERNIGHT DEMAND NEWS... United Arab Emirates purchased 20,000 MT of South American corn and 20,000 MT of Australian feed barley. Israel bought 50,000 MT of optional origin corn (likely to be Black Sea origin). Japan tendered to buy 61,000 MT of milling wheat, 31,000 MT of food-grade barley and 6,000 MT of malting barley. India tendered to sell 145,000 MT of wheat.

 

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