First Thing Today (VIP) -- November 16, 2012

November 16, 2012 12:31 AM


OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading near session lows with losses of 2 to 5 cents. Soybean futures faced followthrough selling overnight and are currently down 9 to 20 cents. Wheat futures at all locations are posting losses between 2 and 4 cents. The U.S. dollar index reached a two-month high overnight and has maintained its gains. The stock market is poised for a lower start as fiscal cliff concerns are in focus.

CHINA CANCELS 600,000 MT OF U.S. SOY IMPORTS... Chinese importers have canceled orders for 600,000 MT of U.S. soybeans due to weak domestic demand and unprofitable crushing margins, according to China National Grain and Oils Information Center (CNGOIC). However, CNGOIC still sees 2012 soybean imports at 58 MMT, which is up 10% from year-ago. It expects imports of 10 MMT for December and November.

TAIWAN TURNS TO U.S. FOR CORN NEEDS... Taiwan has reportedly turned to the U.S. to at least partially meet its corn needs after congestion in Brazil's ports resulted in delayed shipment of at least 420,000 MT of corn slated for September to October delivery. Last week, Japanese importers turned to the U.S. for at least 500,000 MT of U.S. corn after more than 900,000 MT of Brazilian corn scheduled for January to March shipment were delayed.

CFTC TO APPEAL COURT RULING ON POSITION LIMITS RULE... The Commodity Futures Trading Commission (CFTC) voted 3-2 to appeal a federal court ruling that struck down the agency's rule on position limits. A federal court ruling in September had vacated the rule and the agency has been mulling their response. In dissenting on the action, Commissioner Scott O'Malia said the agency should have instead reworked the rule. A final result on this issue thus is now still a ways off.

MARKETS WATCHING WASHINGTON... Today is the first meeting between President Barack Obama and congressional leaders on the fiscal cliff situation. The markets have been on edge since the election, with the Dow declining six of seven sessions since Obama was reelected on a view the stances outlined since the election may make it difficult for lawmakers to reach an agreement. The fiscal cliff situation will remain as a major focus as lame duck lawmakers meet in Washington, and as signaled by House Ag Committee Chairman Frank Lucas (R-Okla.), a new farm bill could become a component in this situation.

LUCAS SAYS FARM BILL REMAINS IN YEAR-END BIG PICTURE... The farm bill remains a part of the "big picture" for the lame-duck session of Congress and the $35 billion in savings via the House Ag Committee version of the bill has "gotten somebody's attention," Chairman Frank Lucas (R-Ohio) told Politico. However, Lucas also acknowledged the fate of the bill remains uncertain. Lucas told the publication he has raised the issue with House Speaker John Boehner (R-Ohio) and Boehner said it was "on their agenda and gave me the impression that it was one of the issues that will be addressed in the big picture sense… I assume he means sequestration and taxes." The report also noted Lucas's remarks were similar to those from Senate Ag Committee Ranking Member Pat Roberts (R-Kan.).

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Nov. 8, traders expect: corn sales between 200,000 and 400,000 MT; wheat sales between 250,000 and 450,000 MT; soybean sales between 250,000 and 550,000 MT; soymeal sales between 150,000 and 250,000 MT; and soyoil sales between 20,000 and 50,000 MT.

CATTLE ON FEED REPORT TODAY... Traders look for this afternoon's Cattle on Feed Report to show On Feed at 94.6%, Placements at 87.3% and Marketings at 102.6% of year-ago levels. USDA will release the report at 2:00 p.m. CT.

STILL WAITING ON CASH CATTLE TRADE... Cash cattle trade could be delayed until this afternoon as bids and asking prices are several dollars apart. Choice beef values slipped 29 cents yesterday and Select declined $1.17, but movement remained solid at 194 loads. Expectations are for $1 to $2 lower trade due to this week's larger offering by feedlots.

PRESSURE ON PORK MARKET CONTINUES... Pork cutout values slipped 27 cents yesterday on lighter movement of 60.5 loads. Packers have seen profit margins tighten this week and are having no difficulty securing needed supplies. As a result, steady to mostly weaker bids are expected today.

OVERNIGHT DEMAND NEWS... South Korea bought 110,000 MT of South American soymeal overnight.

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