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First Thing Today (VIP) -- October 5, 2012

06:32AM Oct 05, 2012


QUIET TRADE OVERNIGHT... Trading volume was light in many markets overnight, including grains, ahead of this morning's U.S. jobs data. As of 6:30 a.m. CT, corn futures are trading fractionally to 3 cents lower, soybeans mostly 1 to 2 cents lower and wheat futures mostly 1 to 4 cents lower at all three exchanges. The U.S. dollar index is anchored near unchanged this morning.

ANOTHER SLUGGISH EMPLOYMENT REPORT EXPECTED... Economists polled by Reuters expect the September jobs data to show the economy added 113,000 non-farm payrolls last month. However, some are looking for the number to be slightly higher than that after ADP data earlier this week showed the private sector added more jobs than expected. The unemployment rate is expected to tick up to 8.2% from 8.1% in last month's report.

INFORMA OCTOBER CROP ESTIMATES OUT THIS MORNING... Informa Economics will issue its October crop estimates at 10:30 a.m. CT. The focal point will be Informa's updated corn and soybean production forecasts.

FAPRI ANALYSIS SEES LIMITED IMPACT TO CORN PRICES FROM RFS ETHANOL WAIVER... The impact to U.S. corn prices from a waiver of ethanol mandates under the Renewable Fuels Standard (RFS) could be greater in 2013-14 than in 2012-13, according to analysis done by the Food and Agricultural Policy Research Institute (FAPRI). However, FAPRI says their analysis indicated none of the impacts are overwhelmingly negative, and in some cases result in higher projected prices compared to the baseline. An outright waiver of the ethanol mandates would reduce 2012-13 corn prices by 4 cents per bu. and 2013-14 corn prices by 17 cents per bu., FAPRI says.

RUSSIA DOUBLES INTERVENTION SALES FORECAST... Russia now plans to sell around 1 MMT of grain from government intervention stocks by year-end in an attempt to cool domestic prices, according to the country's Deputy Agriculture Minister Ilya Shestakov. Russia is likely to sell up to 100,000 MT of grain domestically per week from Oct. 23 until the end of the year Shestakov told Interfax news agency. Previously, Russian officials had indicated the country would sell around 500,000 MT of government grain stocks by year-end.

G20 CALLS OFF EMERGENCY FOOD MEETING, SAYS 'MARKETS ARE FUNCTIONING'... A previously scheduled emergency ministerial meeting of G20 officials to discuss rising agricultural commodity prices has been called off just weeks after France and the most senior food official at the UN formally convened the gathering. Washington, which this year chairs a new G20 body focused on agriculture, says leading countries have decided food commodity markets are "functioning," and an emergency meeting of the Rapid Response Forum is "not necessary at this time." UN officials say some agriculture ministers might still meet in Rome under a different forum.

CATTLE TRADERS FOCUSED ON JOBS DATA... Higher cash cattle trade in the Plains failed to trigger buying interest in cattle futures Thursday. That's a clear signal cattle traders have more than fundamentals on their minds. In this case, it's the economy, specifically this morning's jobs data. If the jobs report isn't negative, cattle futures have enough fundamental support to rally into the weekend.

PORK CUTOUT SURGES... After a decline Wednesday that broke a string of eight consecutive days of gains, the pork cutout market rebounded with strong price gains yesterday. The cutout value surged $1.84 with all cuts higher except bellies, which were unchanged. Rising pork prices maintain positive packer margins and should keep cash hog bids steady to firmer.

KCBT SEEKS LATER START FOR PIT TRADE ON USDA REPORT DAYS... The Kansas City Board of Trade (KCBT) has submitted paperwork to the Commodity Futures Trading Commission seeking approval to start open-outcry trade at 9:30 a.m. CT for its HRW wheat futures and options on USDA report days effective Jan. 1, 2013. KCBT currently starts open-outcry trading at 7:20 a.m. CT on USDA report days, but with USDA moving its report release time to 11 a.m. CT starting in January, there's no need for an earlier-than-normal start.

MALAYSIA DELAYS DECISION ON CRUDE PALM OIL EXPORT TAX... Malaysia has delayed making a decision on a proposal to cut crude palm oil export taxes to 8%-10% from 23%, according to a government official. The official told Reuters a decision on the issue will be made "soon."

OVERNIGHT DEMAND NEWS... South Korea purchased 43,900 MT of Australian wheat and 10,000 MT of Russian corn.