First Thing Today (VIP) -- November 27, 2012

November 27, 2012 12:16 AM


FOLLOWTHROUGH BUYING OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 2 to 4 cents higher, soybeans 3 to 9 cents higher, Chicago wheat 6 to 8 cents higher, Kansas City wheat 3 to 8 cents higher and Minneapolis wheat 3 to 7 cents higher. The U.S. dollar index is near unchanged this morning after being lower for much of overnight trade.

LOOKS LIKE A FARM BILL EXTENSION CANNOT BE AVOIDED... While there is no firm decision on the timeline of a new farm bill, odds are growing that some type -- likely a one-year -- extension of the 2008 Farm Bill is a distinct possibility. If so, some changes would be made relative to direct payments, which would likely be reduced but not eliminated for 2013 crops. An extension would also give USDA time to implement new farm programs included in the coming new farm bill. Reducing direct payments would also provide some funding for extending some lapsed programs, including dairy and livestock disaster programs. It's unclear whether or not the SURE program would be extended.

HRW CCI RATING CONTINUES TO FALL... When USDA's final crop condition ratings of the fall are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the HRW crop dropped another 6 points to 282, while the SRW crop dropped 5 points to 374. The HRW crop will enter dormancy with a CCI rating 54 points below year-ago, while the SRW CCI rating is 8 points higher than the final fall reading last year.

CHINESE WHEAT IMPORTS SEEN RISING 10% IN 2013... China will need to import more wheat next year as the country's wheat consumption is forecast to rise, while production is projected to fall, according to an ag researcher at the Chinese Academy of Agricultural Sciences. The researcher sees 2013 Chinese wheat production falling to 118.3 MMT from 118.1 MMT this year, while consumption is forecast to rise to 119.6 MMT from 119.1 MMT this year. As a result, wheat imports are likely to rise 10% to 3 MMT.

UKRAINE GRAIN EXPORTS REMAIN STRONG... Ukraine has exported 11.51 MMT of grain from July 1 through Nov. 26, according to the ag ministry. Of that total, 5.42 MMT is wheat, 4.19 MMT is corn and 1.75 MMT is barley. The ag ministry says another 382,000 MT of wheat is at ports ready for shipment as exporters try to beat the expected Dec. 1 ban on wheat exports.

LIGHT CASH CATTLE TRADE NOT SEEN AS TONE-SETTING... Light cash cattle trade was recorded in Texas at steady $128 prices Monday, although most feedlots are wanting higher cash bids following $2 to $3 higher prices last week. December live cattle futures faced profit-taking Monday and finished just above the initial cash cattle sales, suggesting traders aren't yet convinced higher cash cattle trade will be seen this week.

CASH HOGS AGAIN SEEN STEADY/FIRMER... Packers paid steady to firmer prices for cash hogs Monday and are expected to come with similar bids today. While market-ready supplies are ample, packers were short-bought coming out of Thanksgiving and are working with profitable cutting margins.

STUDY FINDS POTENTIALLY HARMFUL BACTERIA IN PORK PRODUCTS... A study of raw pork chops and ground pork by Consumer Reports found 69% of samples were contaminated with Yersinia enterocolitica, a little-known foodborne pathogen. The group tested 198 samples and found that while the vast majority were positive for Yersinia enterocolitica, only 3% to 7% were positive for the more common foodborne pathogens Salmonella, Staphylococcus aureus or Listeria monocytogenes. According to the report, several of the isolates found were resistant to one or more antibiotics: 6 of the 8 Salmonella samples, 13 of the 14 Staphylococcus samples and 121 of the 132 yersinia samples. The study also found MRSA on one sample. The group signals the widespread use of antibiotics in agriculture is a key contributor to the resistance problem.

OVERNIGHT DEMAND NEWS... South Korea purchased 110,000 MT of South American soymeal. Sudan bought 55,000 MT of Australian wheat. Japan is seeking 149,481 MT of U.S. and Australian wheat in its weekly tender.


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