First Thing Today (VIP) -- November 19, 2012

November 19, 2012 12:24 AM


IMPROVED RISK APPETITE OVERNIGHT... Recent talks concerning the so-called "fiscal cliff" were deemed "very constructive," which sparked increased risk appetite in the investment world overnight. As of 6:30 a.m. CT, corn futures are trading mostly 4 to 6 cents higher, soybeans 10 to 16 cents higher, Chicago wheat 4 to 5 cents higher, Kansas City wheat 3 to 4 cents higher and Minneapolis wheat 2 to 3 cents higher. The U.S. dollar index is under pressure this morning.

CONGRESS IS ON ANOTHER RECESS, SO ECONOMIC, FOOD PRICE REPORTS ARE KEY THIS WEEK... Lame-duck lawmakers are mostly gone from Washington and will not return until after Thanksgiving -- the Senate will reconvene for legislative business on Monday, Nov. 26, while the House will return on Tuesday, Nov. 27. Today brings the Crop Progress update from USDA. Economic reports of note this week will focus on housing data, with Existing Home Sales and the Housing Market Index out today, while Tuesday will be the release of Housing Starts data. Wednesday will feature the weekly initial jobless claims data which will continue to show Sandy’s impacts. The PMI manufacturing index also comes out that day along with Consumer Sentiment and Leading Indicators. Unlike other sectors, agriculture reports on Friday will be important via the Weekly Export Sales Report and USDA will update its food price forecast.

CHINA TEMPORARILY HALTS SOY AUCTIONS... The Chinese government is temporarily halting auctions of state-owned soybeans as it focuses on stockpiling new-crop supplies, according to state-run China National Grain and Oils Information Center. The halting of state-owned soybean sales is aimed at improving crush margins and keeping crushers from selling back state-owned purchases at the higher prices being paid for new-crop supplies.

UKRAINE GRAIN EXPORTS SEEN RECORD LARGE IN NOVEMBER... Ukraine is seen exporting a record 3.2 MMT of grain this month, according to the Ukraine Agrarian Confederation. The grain lobby says 1.8 MMT of grain (900,000 MT of wheat, 800,000 MT of corn and about 100,000 MT of barley) were exported Nov. 1-16, bringing 2012-13 exports to 10.3 MMT. Exporters continue to actively selling wheat ahead of an expected Dec. 1 halt of exports.

NEUTRAL DATA FOR CATTLE FUTURES... Last Friday's Cattle on Feed Report came in about as expected and cash cattle trade took place at steady $125 to $126 prices in the Plains after futures stopped trading for the week. With the report data and cash cattle trade coming in mostly neutral, much of traders' focus will be on the looming fiscal cliff and the upcoming Thanksgiving holiday.

CASH HOGS CALLED STEADY/WEAKER... Packer demand for cash hogs will be limited this week as plants have down time around Thanksgiving. With most plants bought ahead on slaughter needs, there's no incentive to raise cash hog bids despite profitable margins. Cash hog bids are expected to be steady to weaker to start the week.

WEEKEND DEMAND NEWS... Djibouti purchased 120,000 MT of Indian wheat.


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