First Thing Today (VIP) -- October 4, 2012

October 4, 2012 01:33 AM


CORN AND BEANS FIRMER, WHEAT MIXED OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading mostly 3 to 5 cents higher, soybeans 4 to 14 cents higher and wheat futures are narrowly mixed at all three exchanges. The U.S. dollar index is under pressure as traders await the conclusion of the European Central Bank's policy-setting meeting around 6:45 a.m. CT.

ROMNEY SCORES MOMENTUM LIFT, SUPPORT FROM SOME UNCOMMITTED VOTERS AFTER DEBATE... The first of three presidential debates held last evening was judged a clear momentum builder for GOP candidate Mitt Romney, who set the tone early in the debate and tried to redefine his image with voters. He aggressively rebutted President Barack Obama’s charges that he would cut taxes for the wealthy and vowed not to pass any tax cuts that add to the deficit. Key now is whether an expected lift --especially from some uncommitted voters -- will last. President Obama was widely described as subdued and looking downward while Romney looked directly at the president in winning style points. However, Obama made no major blunders.

FOMC MINUTES TODAY COULD BE REVEALING... The Federal Reserve will release the minutes from its latest policy-setting meeting, which will include details of their talks about the latest round of quantitative easing. On Monday, Fed Chairman Ben Bernanke defended the move and pushed back against some lawmaker claims that the plan required the government to print more money. All but one voting Fed official supported the new stimulus, which has the central bank buying up $40 billion of mortgage bonds each month until it sees substantial improvement in the labor market.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Sept. 29, traders expect: corn sales between 200,000 and 400,000 MT; wheat sales between 450,000 and 575,000 MT; soybean sales between 800,000 and 900,000 MT; soymeal sales between 200,000 and 300,000 MT; and soyoil sales between 15,000 and 35,000 MT.

CANADIAN CROP ESTIMATES ALSO OUT THIS MORNING... Based on the average pre-report guesses from a Reuters poll, Statistics Canada is expected to report all wheat production at 27.1 MMT, the canola crop at 14.6 MMT and barley production at 9.2 MMT. In August, StatsCan estimated all wheat production at 27.0 MMT, the canola crop at 15.4 MMT and the barley crop at 9.5 MMT.

FAO CUTS GLOBAL CEREAL GRAINS FORECAST... The United Nations Food and Agriculture Organization (FAO) cut its 2012 global cereal grains production forecast by 9 MMT from last month to 2.286 billion MT due primarily to smaller corn production in central and southeastern Europe. FAO cut its 2012-13 global cereal grains ending stocks forecast by 4 MMT to 499 MMT. Meanwhile, the FAO food price index rose 3 points in September to 216 due mostly to gains in meat and dairy prices and to a lesser extent higher grain prices.

MEXICO CONSIDERING ARGENTINE CORN IMPORTS... Mexico is doing a risk analysis on imports of Argentine corn, according to an official with the country's food safety agency, amid tight supplies in the United States. Last month, Mexico approved imports of Brazilian corn.

GRAIN UNION RAISES WHEAT EXPORT FORECAST... The head of the Russian Grain Union now sees 2012-13 wheat exports of 14 MMT to 15 MMT out of an exportable surplus of 16 MMT to 17 MMT. That's higher than most other forecasts of up to 14 MMT of wheat exports in 2012-13. Despite the higher forecast, the official still expects the pace of Russian wheat exports to decline significantly starting in November.

CASH CATTLE TRADE UP IN THE AIR... While boxed beef prices have strengthened this week, showlist numbers are up from week-ago and packers are working with negative cutting margins. As a result, this week's cash cattle trade is still very much uncertain. With bids and asking prices still $3 to $4 apart, most cash sources aren't expecting active cash cattle trade until late today or more likely Friday.

PORK CUTOUT SLIPS... The pork cutout value was 79 cents lower Wednesday to end a string of eight straight days of gains in which the cutout rose $6.47. Despite the drop in the pork cutout value yesterday, there should be enough packer demand to keep cash hog bids steady to firmer across the Midwest today as cutting margins are still in the black.

OVERNIGHT DEMAND NEWS... Taiwan purchased 60,000 MT of Brazilian soybeans. Japan bought 120,778 MT of wheat, including 64,442 MT of U.S. supplies. India tendered to export 35,000 MT of wheat.


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