First Thing Today (VIP) -- September 27, 2012

September 27, 2012 01:06 AM


MILD FOLLOWTHROUGH SELLING OVERNIGHT... Grain and soy futures followed up Wednesday's sharp losses with mild declines overnight. As of 6:30 a.m. CT, corn futures are trading 1 to 3 cents lower, soybeans 6 to 9 cents lower, Chicago and Kansas City wheat 2 to 5 cents lower, and Minneapolis wheat 1 to 2 cents lower. The U.S. dollar index is under mild pressure as investors wait on Spain to unveil a new budget today, including austerity measures which are causing rioting in the country.

CHINA MOVES TO BOOST ECONOMY... The People's Bank of China injected a record 365 billion yuan ($57.92 billion) into money markets this week in a move aimed at preventing a short-term liquidity crunch at commercial banks. Some traders say this reduces then odds China will cut bank reserve requirements short-term and others say it paves the way for a potential interest rate cut. Meanwhile, China's Ministry of Finance and the National Development and Reform Commission announced in a joint statement China will waive inspection/quarantine fees and customs supervision charges for importers and exporters from Oct. 1 through year-end to help them weather the tough global economic conditions. Chinese media is reporting this will save importers and exporters 3.5 billion yuan ($555 million).

WHEAT TO MAKE UP MOST OF 2011 ACRE PAYMENTS... Payments for 2011-crop Average Crop Revenue Election (ACRE) are expected to around $50 million, although final levels have not yet been determined for several crops. So far, only payment levels for wheat, barley and oats have been determined as those crops’ marketing years ended May 31. For remaining crops, many of the determinations will be made this week after the release of the monthly Ag Prices Report from the National Ag Statistics Service (NASS). That report will contain the average marketing year prices for crops other than wheat barley and oats. Expectations are that wheat ACRE payments will total $40 million with $5.5 million for sorghum and just under $5 million for soybeans.

WEEKLY EXPORT SALES REPORT OUT THIS MORNING... For the week ended Sept. 20, traders expect: corn sales between 150,000 and 250,000 MT; wheat sales between 400,000 and 550,000 MT; soybean sales between 650,000 and 800,000 MT; soymeal sales between 175,000 and 250,000 MT; and soyoil sales between 20,000 and 40,000 MT.

SOME CASH CATTLE SALES AT $123, OTHERS WANT MORE... Some feedlots in Texas and Kansas moved cattle at $123 Thursday -- $3 below last week's trade -- but many feedlots are still holding out in hopes of slightly better bids. If live cattle futures face additional pressure today, it would likely increase the urgency of feedlots to move cattle, although that may also prompt packers to lower cash cattle bids even further.

ANOTHER SOLID DAY FOR THE PORK PRODUCT MARKET... The pork cutout value firmed a modest 32 cents Wednesday, but that marked the fifth consecutive day of price gains and packers moved a strong 101 loads of product on the day. With cutting margins still solidly in the black, packers have incentive to keep kill lines as full as possible, which should keep cash hog bids steady to firmer across the Midwest.

OVERNIGHT DEMAND NEWS... South Korea purchased 69,000 MT of U.S. or South American corn and another feedmaker tendered for another 70,000 MT of corn.


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