First Thing Today (VIP) -- September 21, 2012

September 21, 2012 01:23 AM


MILD PRICE RECOVERY OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 2 to 5 cents higher, soybeans mostly 5 to 11 cents higher, Chicago wheat mostly 9 to 11 cents higher, Kansas City wheat mostly 5 to 6 cents higher and Minneapolis wheat mostly 6 to 8 cents higher. The U.S. dollar index is weaker, although well off its overnight lows.

RUSSIA SENDING MIXED SIGNALS ON POSSIBLE GRAIN EXPORT RESTRICTIONS... Russia's Economy Minister Andrei Belousov says grain export restrictions are "entirely possible" if domestic prices continue to rise. That's a reversal of what other Russian officials have previously stated. In fact, Russia's Deputy Prime Minister Arkady Dvorkovich almost immediately reiterated grain export restrictions are not being considered.

INFORMA TO ISSUE 2012 WHEAT ESTIMATE, 2013 ACREAGE NUMBERS THIS MORNING... At 10:30 a.m. CT, Informa Economics will update its estimate of U.S. wheat production in advance of USDA's Sept. 28 Small Grains Summary. Informa will also issue its initial acreage estimates for 2013, including revised 2012 acreage and U.S. production implications for the 2013 crop year.

BEST NEW FARM BILL TIMELINE ADVICE: WAIT TO SEE ELECTION RESULTS... The ups and mostly downs of the new farm bill debate have been painful to watch and report on. With lawmakers about to leave the nation's capital, the best advice on whether or not lawmakers returning after the Nov. 6 elections for a lame-duck session can finalize something they haven't been able to for a year depends in large part on those election results. If Barack Obama wins reelection and the Democrats retain control of the Senate, and the GOP retains control of the House, we would up the odds of a lame-duck farm bill compromise, however murky it appears at this stage. Should Mitt Romney win the presidency and/or Republicans wrest "control" of the Senate, the odds increase for the farm bill to be booted into 2013.

WTO: SLOW GLOBAL GROWTH TO IMPACT TRADE IN 2012, 2013... Slowing global output growth has led WTO economists to downgrade their 2012 forecast for world trade expansion to 2.5% from 3.7% and to scale back their 2013 estimate to 4.5% from 5.6%. "In an increasingly interdependent world, economic shocks in one region can quickly spread to others. Recently announced measures to reinforce the euro and boost growth in the United States are therefore extremely welcome," said WTO Director-General Pascal Lamy.

JAPAN REVISES UP FEED WHEAT IMPORT FORECAST... Japan plans to import 1.21 MMT of feed wheat in 2012-13, up from its March forecast of 764,000 MT and 183.4% higher than the 427,000 MT imported in 2011-12. As we reported yesterday, Japan's use of wheat in feed rations continues to grow amid rising corn prices.

SOUTH KOREA TEMPORARILY HALTS IMPORTS, DOMESTIC SALES OF U.S. RICE... South Korea has temporarily halted imports and domestic sales of U.S. rice amid potential concerns over arsenic contamination, according to the ag ministry. The suspension comes after Consumer Reports found traces of the carcinogen in a test of 200 rice samples. The ag ministry says it will perform its own tests and decide as quickly as possible whether to resume imports and sales of U.S. rice.

CATTLE ON FEED, COLD STORAGE REPORTS OUT THIS AFTERNOON... USDA's Cattle on Feed Report is expected to show On Feed at 99.9%, Placements at 92.7% and Marketings at 98.5% of year-ago levels. In the Cold Storage Report, the average, pre-report guess puts total pork stocks at 547.3 million lbs., which would be a record for the end of August. Total beef stocks are guessed at 453 million pounds.

CASH CATTLE TRADE STEADY/LOWER... Some feedlots started moving cattle around $126 in the Plains Thursday -- at the low end of last week's cash range in Texas and Kansas, and $1 below last week's trade in Nebraska. But with feedlots current on marketings, many passed on those bids in hopes that packers would eventually come with firmer cash prices.

PORK CUTOUT FIRMS... The pork cutout value firmed $1.89 Thursday on strength in all cuts. With packers raising cash hog bids amid a modest tightening of supplies and strong cutting margins, the pork product market must continue to show strength or margins will erode.

OVERNIGHT DEMAND NEWS... South Korea purchased up to 133,000 MT of optional origin corn, and tendered for up to 140,000 MT of U.S., South American or eastern European corn, up to 70,000 MT of optional origin feed wheat and 55,000 MT of soymeal.


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