First Thing Today (VIP) -- September 18, 2012

September 18, 2012 01:08 AM



FOLLOWTHROUGH SELLING IN BEANS... Soybean futures followed up Monday's sharply lower to mostly limit-down price performance with additional price pressure overnight. As of 6:30 a.m. CT, soybean futures are trading 8 to 31 cents lower, corn 1 to 4 cents lower, Chicago wheat narrowly mixed, Kansas City wheat mostly 1 to 3 cents higher and Minneapolis wheat mostly 3 to 5 cents higher. The U.S. dollar index is mildly firmer this morning.

CFTC LOOKING INTO CRUDE 'FLASH CRASH'... The Commodity Futures Trading Commission (CFTC) is in contact with CME Group and the IntercontinentalExchange regarding the sudden, sharp price plunge in crude oil futures Monday afternoon to make sure there were no irregularities, according to CFTC Commissioner Scott O'Malia. Bart Chilton, another CFTC commissioner emailed Reuters, "When we see prices and volumes move this fast and this dramatically, the job of CFTC surveillance staff becomes even more important."

WORLD LEADERS SHOWING RESTRAINT IN RESPONDING TO FOOD PRICE SITUATION: USDA'S GLAUBER... World leaders so far have "exercised prudence in policy-making and avoided actions such as export bans that escalated the situation in 2008," according to USDA Chief Economist Joe Glauber. Glauber will become chairman next month of a G20 clearinghouse on farm production and global food needs.

EUROPEAN COMMISSION CONFIRMS PROPOSAL TO SHIFT BIOFUELS POLICY... European Commission officials in charge of climate and energy policies have confirmed what was reported last week -- they are proposing legislation that would limit the use of food crops for biofuels and limiting such fuels to 5% of total energy consumption until 2020. In the U.S., proposals to limit biofuel production when grain supplies run tight have foundered in Congress as biofuels industry efforts have so far kept those policies from moving forward.

CHINA NOT LOOKING AT MORE COTTON IMPORTS... China won't issue more cotton import quotas for this calendar year and is not considering more imports, according to an official with the National Development and Reform Commission. The official says imported cotton prices are currently cheaper than Chinese prices and the government doesn't want to depress the domestic market. Meanwhile, the Chinese government will start buying 500,000 MT of sugar from local farmers Sept. 20 in an effort to stabilize domestic prices.

STRONG START IN BOXED BEEF MARKET... Boxed beef prices were $1.51 (Choice) to $1.78 (Select) higher Monday and packers moved a solid 171 loads of product, especially give current price levels. While the boxed beef market remains supported, feedlots will have a tough time getting packers to raise cash cattle bids again this week if cattle futures extend Monday's sharp price declines.

NO SIGNS OF A LOW YET IN PORK PRODUCT MARKET... The pork cutout value was 16 cents lower Monday and packers moved only 46.88 loads of product on the day. Traders are hopeful the product market is near a short-term low, but prices and movement need to show consistent strength before they will actively cover short futures positions.

OVERNIGHT DEMAND NEWS... Taiwan purchased several parcels (unspecified tonnage) of U.S. soybeans. Japan is seeking 101,158 MT of U.S. and Canadian wheat in its weekly tender.

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