First Thing Today (VIP) -- October 26, 2012

October 26, 2012 01:37 AM


CORN AND BEANS LOWER, WHEAT MIXED TO FIRMER OVERNIGHT... Price action was quiet in the grain and soy complex overnight amid a lack of fresh news. As of 6:30 a.m. CT, corn futures are trading fractionally to 1 cent lower, soybeans 5 to 10 cents lower, Chicago and Kansas City wheat narrowly mixed and Minneapolis wheat around a penny higher. The U.S. dollar index is firmer as traders await the first look at third quarter U.S. GDP and consumer sentiment data later this morning.

FARM BILL UPDATE... House Majority Leader Eric Cantor (R-Va.) this week pledged that the House will hold a vote on a new farm bill in the post-election, lame-duck session, expanding on a commitment from House Speaker John Boehner (R-Ohio) that the chamber would address the farm bill issue in the post-election session. Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) welcomed the Cantor statement, urging action to wrap up the bill prior to year-end. However, even if the House moves the farm bill approved by the House Ag panel earlier this year, there would still need to be a conference to iron out differences between the House and Senate bills with considerable distance between the two chambers on nutrition, in particular.

RUSSIAN FALL HARVEST, WINTER GRAIN SOWING NEARLY COMPLETE... With 98% of the grain crop harvested as of Oct. 23, total output stands at 72 MMT, according to data from the Russian ag ministry. Of that total, wheat production accounts for 39.6 MMT, with 99% of the wheat crop cut. Meanwhile, winter grain sowing is 92% complete.

BEEF DEMAND CONCERNS SURFACE... With retailers paying record prices for Choice boxes of beef, traders are concerned consumers will balk at the inevitable price rise at the meatcase. That concern led to a sharp drop in deferred live cattle futures Thursday as traders sense the rise in beef will slow demand. But tightening cattle numbers limit downside risk in the product market, cash market and futures even if demand slows.

PORK CUTOUT MODESTLY FIRMS... After plunging $3.63 in three days, the pork cutout value was 25 cents higher Thursday. Still, many pork plants are now working with negative margins, which threatens to put more near-term pressure on the cash hog market and lean hog futures given an ample supply of market-ready hogs.

OVERNIGHT DEMAND NEWS... Mauritius tenders for 49,000 MT of optional origin wheat flour.


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