First Thing Today (VIP) -- September 10, 2012

September 10, 2012 01:37 AM


CORN AND BEANS MOSTLY FIRMER, WHEAT MIXED... Corn and soybean futures have fought back from earlier weakness to mildly favor the upside. As of 6:30 a.m. CT, corn futures are trading mostly 1 to 3 cents higher, soybeans mostly 2 to 3 cents higher and wheat futures are narrowly mixed at all three exchanges. The U.S. dollar index is mildly firmer.

THE WEEK AHEAD: USDA REPORTS, FOMC MEETING AND LAWMAKERS' RETURN TO WASHINGTON... Grain traders' primary focus this week is USDA's Crop Production and Supply & Demand Reports Wednesday morning. The conclusion of the Federal Open Market Committee meeting Thursday will also be a key event for the week with a focus on expectations for Fed action to further bolster the U.S. economy. Plus, lawmakers return this week from their extended summer break but the efforts to get a new farm bill approved by both chambers appear to be slim given the limited number of days remaining before they head out again to hit the campaign trail. But farm group lobbyists are going to try their best to change that as they hold various press events in the coming week.

CHINESE ECONOMIC DATA DISAPPOINTS... China's trade surplus widened to $26.7 billion in August from $25.1 billion in July as exports rose 2.7% last month, while imports declined 2.6%. Meanwhile, China's consumer price index (CPI) rose to 2% over year-ago last month from 1.8% in July. Food prices increased to 3.4% over year-ago, while non-food prices were 1.4% higher than last year. The producer price index (PPI) came in at 3.5% below year-ago. The disappointing trade data along with a pickup in consumer prices increases the odds the Chinese government will take additional measures soon to boost economic activity.

CHINESE SOY IMPORTS SLOW IN AUGUST... China imported 4.42 MMT of soybeans last month, which was down 24.7% from July and 2% lower than year-ago, according to official customs data. For the first eight moths of this year, however, soybean imports are up 17.4% at 39.34 MMT. State-run China National Grain and Oils Information Center forecasts soybeans imports to be 4.15 MMT for September.

INDIA'S WHEAT CROP PROSPECTS IMPROVE, MORE EXPORTS LIKELY... India is likely to produce "more than 90 MMT" of wheat this year, according to the head of the main government body overseeing wheat production. But while crop prospects have improved, it will be difficult to surpass last year's record 93.9 MMT crop. Meanwhile, private Indian firms have exported around 3 MMT of wheat since the export ban was lifted last September. Export sources feel around another 2 MMT of wheat will be exported by the end of this year.

WAITING ON FINAL CASH CATTLE NUMBERS... Cash cattle negotiations went deep into Friday. As a result, traders will need to wait until this morning to get final sales prices and the volume of cattle traded in the Plains. The final sales figures, along with boxed beef trade will have a major say in this week's cash cattle expectations.

CASH HOGS CALLED WEAKER... Packer demand for cash hogs is expected to be limited again this week as plants are bought ahead on slaughter needs and market-ready supplies are abundant. As a result, cash hog bids are expected to be remain under pressure.

WEEKEND DEMAND NEWS... South Korea bought 55,000 MT of U.S. or South American corn.


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