First Thing Today (VIP) -- October 11, 2012

October 11, 2012 01:12 AM


SOYBEANS HIGHER, CORN AND WHEAT MOSTLY LOWER OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading fractionally lower, soybeans 10 to 18 cents higher, Chicago wheat 4 to 5 cents lower, Kansas City wheat 5 to 6 cents lower and Minneapolis wheat 1 to 3 cents lower. The U.S. dollar index is modestly weaker this morning after being firmer for much of the overnight hours.

OCTOBER CROP REPORTS OUT THIS MORNING... In the Crop Production Report, traders are expecting USDA to lower its corn crop estimate to 10.598 billion bu. and raise its soybean estimate to 2.770 billion bu., based on the average pre-report guesses. In the Supply & Demand Report, traders expect 2012-13 carryover projections to come in at: 645 million bu. for corn; 134 million bu. for soybeans; and 627 million bu. for wheat.

CHINESE SOY AUCTION SALES UNEXPECTEDLY SLOW... China sold only 225,355 MT of state-owned soybeans out of around 400,000 MT of supplies put up for auction. All of the 2009-crop soybeans were sold, but the initial offerings of 2010-crop soybeans were priced higher than expected and crushers bought only 6% of available supplies.

UKRAINE INCREASES WHEAT EXPORT CAP... Ukraine's ag ministry announced it will allow up to 5 MMT of wheat to be exported during 2012-13, an increase of 1 MMT from the level previously agreed to between the government and exporters in early September. As of Oct. 8, around 3 MMT of wheat has already been exported. The ag ministry now sees total grain exports for 2012-13 around 20 MMT compared to its previous cap of 19.4 MMT.

ARGENTINE DOCKWORKERS CALL OFF STRIKE... Argentine dockworkers around the main grain hub at Rosario called off a two-day strike Wednesday and according to a union leader, things have returned to "normal." Negotiations over demand for better working conditions by the dockworkers will resume Oct. 24.

CFTC'S GENSLER BACKS APPEAL OF COURT RULING ON POSITION LIMITS RULE... Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler said Wednesday he is in favor of appealing the court ruling which struck down the agency's rule on position limits in 28 futures markets. While no decision has been made, Gensler says the agency is compelled to push ahead on the rule. Meanwhile, Republican lawmakers on the House Financial Services Committee said in a letter to Gensler they are concerned the agency is using limited resources to pursue the matter.

CASH CATTLE EXPECTATIONS STRENGTHEN... Cash cattle bids and asking prices are still $4 to $5 apart, suggesting active cash cattle trade isn't close to getting started, but most cash sources are looking for prices to be $1 or more higher than last week's $124 trade in the Plains. Adding to the bullish cash sentiment is yesterday's boxed beef performance. While prices were slightly lower, packers moved a strong 342 loads of product on the day.

PORK CUTOUT STRENGTHENS AGAIN... The pork product market followed up Tuesday's strong price gain with another 96-cent advance yesterday. That further improves packer cutting margins, but won't likely be enough to get them to broadly raise cash hog bids as most plants have near-term slaughter needs covered.

WEEKLY EXPORT SALES DELAYED... Due to Monday's government holiday, weekly export sales data for the week ended Oct. 4 is delayed until Friday morning.

OVERNIGHT DEMAND NEWS... South Korea purchased 25,100 MT of U.S. wheat. Japan bought 152,647 MT of wheat in its weekly tender, including 75,276 MT of U.S. supplies. Jordan tendered for 100,000 MT of optional origin milling wheat and 150,000 MT of optional origin feed barley.


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