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

May 8, 2013 01:21 AM


CORN AND WHEAT CHOPPY, BEANS FIRMER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading steady to 3 cents higher in old-crop contracts and 2 to 3 cents lower in new-crop contracts, soybeans are 3 to 10 cents higher, Chicago wheat is fractionally to 1 cent higher, Kansas City wheat is fractionally to 2 cents higher and Minneapolis wheat is narrowly mixed. The U.S. dollar index is under pressure this morning.

CHINESE TRADE DATA BESTS EXPECTATIONS... China surged to a $18.16 billion trade surplus in April from an $884 billion deficit in March, besting expectations for a $15.1 billion trade surplus. Exports rose 14.7% last month, while imports increased 16.8%, both jumping more than anticipated. This is the first positive economic data out of China in a while after a recent string of negative numbers.

CHINESE SOY IMPORTS RISE IN APRIL, BUT DOWN FROM YEAR-AGO... China imported 3.98 MMT of soybeans in April, up 3.6% from March but 18.4% below year-ago, according to official customs data. Soybean imports through the first four months of this year stand at 15.47%, down 14.8% from year-ago. Meanwhile, slumping feed demand due to bird flu and weakening crush margins may cause China to cancel some of the record soybean shipments that are expected in the May through July period.

FIRM LOWERS UKRAINE GRAIN CROP FORECAST... Private consulting firm UkrAgroConsult trimmed its 2013 Ukraine grain crop forecast to 52.21 MMT from 52.38 MMT previously. The firm cut its wheat forecast to 20.16 MMT from 20.87 MMT last month.

WHITE HOUSE SAYS WOULD VETO DEBT PRIORITIZATION BILL... The White House warned late Tuesday President Obama would veto a bill being considered in the House that would require the U.S. Treasury to pay public bondholders and government program beneficiaries in the event Congress does not raise the debt ceiling. The temporary suspension of the debt limit expires May 19 and would revert to around $16.9 trillion -- a level necessary to pay U.S. debt up to that point. The measure is not seen passing the Senate but is another volley in the next round of budget skirmishes in Washington that are on tap in coming months.

15,000 DOW IN PERSPECTIVE... The Dow Jones Industrial Average is up 15% so far this year and up 129% since it touched a low on March 9, 2009. According to the Wall Street Journal, the Dow first cleared the 14,000 mark in July 2007 and then the financial crisis knocked the wind out of its sails and it tumbled 54%. The Dow again topped the 14,000 mark on Feb. 1 this year -- nearly four years after it first crested that level. It took only 66 days since then for the Dow to close above 15,000.

BOXED BEEF PRICES REBOUND, MOVEMENT STAYS LIGHT... Boxed beef prices were 65 to 93 cents higher Tuesday and movement improved to 147 loads. But movement isn't strong enough despite historically strong wholesale prices to alleviate traders' concerns with demand. Until those concerns are eased, traders will keep summer-month live cattle futures at a sizable discount to the cash market.

PORK MARGINS CONTINUE TO DECLINE... The combination of steady to firmer cash hog bids and softening pork product prices is pushing packer cutting margins deeper into the red. With margins declining, packer demand for cash hogs is expected to weaken. Cash hog bids are expected to be steady at most Midwest locations today, though some weaker bids may begin to surface.

OVERNIGHT DEMAND NEWS... South Korea bought a total of 130,000 MT of South American corn in two separate tenders. Japan received no bids in a tender to purchase 120,000 MT of feed wheat and 200,000 MT of feed barley.


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