First Thing Today (VIP) -- November 29, 2012

November 29, 2012 12:24 AM


BEANS FIRMER, CORN AND WHEAT MIXED... As of 6:30 a.m. CT, corn futures are trading narrowly mixed with a slight upside bias, soybeans 2 to 9 cents higher and wheat futures are narrowly mixed at all three exchanges. The U.S. dollar index is weaker this morning.

CHINA BUYING U.S. SOYBEANS, MORE PURCHASES LIKELY... As suspected, Chinese crushers have been buying U.S. soybeans this week as margins have improved, although they remain negative. Trade sources signal Chinese soybean purchases are likely to continue with crushers still needing 3 MMT to 4 MMT of supplies for first quarter delivery. Meanwhile, the head of China's state grain policy agency says the country will import around half of the world's soybean exports this year. In addition to strong bean imports, China is a net importer of wheat, corn and rice despite record grain production for a ninth consecutive year.

UKRAINE RAISES WHEAT EXPORT CAP... Ukraine has upped its limit on 2012-13 wheat exports to 5.8 MMT, according to the Ukraine Grain Association. That figure lines up with data released by the ag ministry earlier this week that said wheat exports totaled 5.42 MMT through Nov. 26 and another 382,000 MT of wheat were at ports ready for export. After the 5.8-MMT "cap" is reached, the government will decide if wheat exports need to be officially halted. The association says it believes Ukraine could export 6.5 MMT of wheat without causing domestic shortages.

FISCAL CLIFF TALKS TODAY ON MORE UPBEAT PROSPECTS... Treasury Secretary Timothy Geithner and White House Director of Legislative Affairs Rob Nabors today will meet separately with Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio), and House Minority Leader Nancy Pelosi (D-Calif.). Geithner and Nabors also will meet with House Majority Leader Eric Cantor (R-Va.), House Ways and Means Chairman Dave Camp (R-Mich.), and House Budget Chairman Paul D. Ryan (R-Wis.). "We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts --because spending cuts that Washington Democrats will accept is what is missing from the ‘balanced approach’ that the president says he wants," a Boehner spokesman said.

VILSACK TO MEET WITH CONGRESSIONAL AG LEADERS TODAY... USDA Secretary Tom Vilsack today will meet leaders of the House and Senate Agriculture committees with farm bill and other topics on the likely luncheon agenda. Sources report the luncheon has been scheduled for weeks and is not a new calendar item. But the key farm bill issue remains: no major action will take place until House GOP leaders give Ag leaders the word to start incorporating a new farm bill into an expected year-end fiscal package. Meanwhile, House Republicans selected their committee leaders for the new Congress that will take over in January and Frank Lucas (R-Okla.) will continue in his role as chairman of the House Ag Committee.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Nov. 22, traders expect: corn sales between 450,000 and 650,000 MT; wheat sales between 400,000 and 500,000 MT; soybean sales between 500,000 and 750,000 MT; soymeal sales between 150,000 and 250,000 MT; and soyoil sales between 100,000 and 200,000 MT.

CASH CATTLE UNCERTAINTY REMAINS... Bids and asking prices in the Plains remain far apart as packers are hoping to get cattle bought cheaper than week-ago while feedlots want higher prices. While tighter showlists and strength in the boxed beef market Wednesday favor feedlots in cash negotiations, packers are working with highly negative margins and there are some demand concerns with Choice boxed beef at a lofty price.

PORK CUTOUT CONTINUES TO STRENGTHEN... The pork cutout value was another 74 cents higher Wednesday and is now $8.48 higher over the past five days. With the product market rising sharply, packers continue to pay higher prices for cash hogs and traders are actively buying lean hog futures. But the $4-plus premium December hogs hold to the cash index makes futures vulnerable to profit-taking pressure.

OVERNIGHT DEMAND NEWS... Japan bought 149,481 MT of wheat in its weekly tender, including 105,969 MT of U.S. supplies. Japan made no purchases from its tender for 120,000 MT of feed wheat and 200,000 MT of feed barley, but is expected to retender next week. Algeria purchased between 325,000 and 375,000 MT of optional origin milling wheat.


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