First Thing Today (VIP) -- October 12, 2012

October 12, 2012 01:28 AM


CORRECTIVE PULLBACK OVERNIGHT... Thursday's strong gains failed to trigger followthrough buying overnight. Instead, profit-taking is weighing on grain and soy futures this morning. As of 6:30 a.m. CT, corn futures are trading 4 to 6 cents lower, soybeans 13 to 15 cents lower, Chicago wheat 4 to 7 cents lower, Kansas City wheat 5 to 6 cents lower and Minneapolis wheat 1 to 5 cents lower. The U.S. dollar index is also lower this morning.

VP CHOICES BATTLE IN LOUD AND CONTENTIOUS DEBATE... Unlike last week's first presidential debate in which there was a clear winner (GOP challenger Mitt Romney), Thursday's debate between VP Joe Biden and GOP Rep. Paul Ryan is being deemed a draw by most nonpartisan observers and some, but not all polls. Those favoring Ryan note that Biden's debate aggressiveness bordered on rudeness and contempt -- Biden interrupted Ryan many times. Biden supporters noted he accomplished what Obama did not -- drawing clear differences on key Democratic issues like Medicare and taxes. Bottom line: While Biden's loud comments likely uplifted dispirited Democrats, it is still unclear how the strategy played with independents or undecided voters. As expected, Biden was stronger on foreign issues, Ryan on domestic matters.

RUSSIA UPDATES GRAIN CROP FORECAST -- AGAIN... Interfax news agency says Russian Deputy Ag Minister Ilya Shestakov put the country's grain forecast at 71.7 MMT. Earlier this week, the Ag Minister Nikolai Fyodorov said grain production would be 70 MMT. No matter the actual level of output, Russian grain production is down sharply from year-ago due to drought and exportable wheat supplies from the country are quickly dwindling.

SOUTH KOREA RESUMES U.S. RICE IMPORTS, SALES... Effective today, South Korea has lifted its suspension of U.S. rice imports and sales that was put in place Sept. 21 amid concerns about possible contamination with arsenic. Tests conducted by the Korea Food & Drug Administration found no significant risk for human consumption.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Oct. 4, traders expect: corn sales between 300,000 and 400,000 MT; wheat sales between 350,000 and 550,000 MT; soybean sales between 750,000 and 850,000 MT; soymeal sales between 250,000 and 350,000 MT; and soyoil sales between 20,000 and 45,000 MT.

ACTIVE CASH CATTLE TRADE STILL AWAITED... Some feedlots in Kansas moved cattle at $125 Thursday -- $1 above last week's cash trade -- although most cattle feeders throughout the Plains continue to hold out in hopes of getting $126 or better for this week's supplies. Cattle traders are taking a cautious approach, as October live cattle closed Thursday below initial cash sales levels.

ANOTHER STRONG DAY FOR PORK TRADE... The pork cutout value firmed another $1.04 Thursday and packers moved 85.5 loads of product at the higher prices. With the pork product market continuing to strengthen, packer cutting margins remain in the red, which is supportive of both the cash hog market and lean hog futures.

OVERNIGHT DEMAND NEWS... South Korea canceled a tender for up to 270,000 MT of corn and up to 70,000 MT of feed wheat.


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