First Thing Today (VIP) -- October 22, 2012

October 22, 2012 01:20 AM



SOYBEANS LEAD GAINS OVERNIGHT... Soybean futures are leading gains this morning as bulls try to build on last week's price recovery. As of 6:30 a.m. CT, soybean futures are trading 10 to 16 cents higher, corn 1 to 3 cents higher, Chicago wheat 5 to 8 cents higher, Kansas City wheat mostly 5 to 7 cents higher and Minneapolis wheat 7 to 9 cents higher. The U.S. dollar index is under pressure this morning, which is aiding the firm tone in grains.

FINAL PRESIDENTIAL DEBATE OPENS THE WEEK... The third and final debate between President Barack Obama and GOP challenger Mitt Romney takes place tonight, with a focus on foreign policy. This is their final meeting with just over two weeks to go before the general election. Spain will remain a focus in terms of whether they will ask for emergency aid along with keeping an eye on tensions in the Mideast relative to oil markets in particular. Over the weekend, the White House denied a New York Times report that the U.S. and Iran have agreed to one-on-one negotiations over Iran's nuclear program after the U.S. presidential election. Also this week, the Federal Open Market Committee will hold a two-day meeting Tuesday and Wednesday. And investors will get their first look at third quarter GDP Friday. From an ag perspective, focus is on the demand side of the market as corn and soybean harvest is quickly winding down. Traders are also more closely monitoring South American planting conditions as wet weather is slowing progress in central Argentina and southern Brazil, while producers in central and northern production areas of Brazil are waiting on rains to plant.

RUSSIA REITERATES STANCE ON EXPORT RESTRICTIONS... Following reports last Friday that Ukraine will ban grain exports starting Nov. 15, speculation has increased Russia will follow suit. But Russian Ag Minister Nikolai Fyodorov reiterated to state news agency RIA Novosti over the weekend that he "categorically opposes" any export restrictions.

ADM MAKES BID FOR GRAINCORP.... Archer Daniels Midland Co. (ADM) has made a $2.76 billion all-cash bid to acquire Australia's GrainCorp. Ltd. The move by ADM is expected to trigger bids from other grain industry rivals.

COLD STORAGE REPORT OUT THIS AFTERNOON... Traders expect pork stocks in storage at the end of September to be 620.3 million lbs., which would be around 90 million lbs. more than the current record for this date. Beef stocks are guessed at 423.6 million pounds.

COF REPORT FAVORS BEAR SPREADING... Last Friday's Cattle on Feed (COF) Report showed both Placements and Marketings below expectations, which should cause traders to bear spread futures (buy deferred contracts at a quicker clip than nearby futures. Once the report data is factored into the market, the key for nearby futures will be boxed beef trade and this week's price outlook for the cash cattle market.

CASH HOGS SEEN MOSTLY STEADY... Packers are expected to open the week offering steady cash hog bids at most Midwest locations. But with most plants bought ahead on slaughter needs for the week and a plentiful supply of market-ready hogs, scattered weaker cash hog bids are possible.

WEEKEND DEMAND NEWS... South Korea purchased 50,000 MT of U.S. wheat. Syria bought 100,000 MT of Black Sea origin wheat.


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