First Thing Today (VIP) -- September 3, 2013

September 3, 2013 01:06 AM


SOYBEANS SURGE, CORN AND WHEAT FOLLOW... Soybean futures rallied sharply coming out of the holiday weekend amid forecasts calling for hot and dry conditions across the Corn Belt. As of 6:30 a.m. CT, soybean futures are trading 32 to 45 cents higher through the July 2014 contract, corn futures are mostly 7 to 8 cents higher, SRW wheat futures are 3 to 5 cents higher, HRW wheat futures are fractionally to 4 cents higher and HRS wheat futures are around 1 cent higher. The U.S. dollar index is firmer this morning.

HOT, DRY WEEK AHEAD... Some areas of the Corn Belt got needed precip over the holiday weekend, but the rains weren't nearly widespread enough. This week's forecast calls for a return of above-normal temps after today and virtually no precip aside from light rain chances across the Upper Midwest. The hot and dry conditions will continue to stress corn and soybean crops as they try to fill kernels and pods.

CONGRESSIONAL VOTE ON SYRIA MEASURE COULD IMPACT FOOD AND FARM BILLS... President Obama's decision to seek congressional authorization force against Syria could impact a host of other issues when lawmakers return Sept. 9, including debate on a separate food stamp funding bill in the House and the announcement of House farm bill conferees. Obama today will meet with the congressional leaders from both chambers, and chairs and ranking members from national-security committees -- Senate Armed Services, Senate Foreign Relations, Senate Intelligence, House Foreign Affairs, House Intelligence and House Armed Services -- regarding the coming vote on getting congressional authorization for force against Syria. The president faces hurdles in both the House (especially) and the Senate to get the coming Syria measure approved.

BESIDES SYRIA, EMPLOYMENT REPORT AND BEIGE BOOK ARE THE FOCUS IN WASHINGTON THIS WEEK... The big focus economic-wise will come Friday via the August Employment Report. That will be the key for the holiday-shortened week. Wednesday will see the release of the Beige Book, the snapshot of economic conditions in the 12 Federal Reserve banks issued two weeks ahead of the FOMC meeting. Several Fed officials are also on tap and their views on the prospects for starting the tapering of the Fed’s asset purchases could be market factors. And as we saw ahead of the holiday, the Syrian situation remains one that crude oil in particular will monitor. For agriculture, the Monday holiday shifts some of the regular data from USDA --Crop Progress will be out this afternoon and Weekly Export Sales will be released on Friday. Also due out from USDA are updates on food security and ag trade, with both of those coming on Wednesday.

CHINA TO 'GRADUALLY INCREASE' CORN IMPORTS... China's Agriculture Minister Han Changfu says the country will "gradually increase" corn imports despite rising domestic production as growing protein demand within the country and an expanding corn processing industry is increasing the need for the feedgrain. His comments are in contrast to past strong statements that China will continue to strive for self-sufficiency in corn production. He gave no indication of how much corn China plans to import in 2013-14 or upcoming years.

CHINA'S MANUFACTURING SECTOR SHOWS GROWTH... China's official purchasing managers' index (PMI) came in at a 16-month high of 51.0 in August versus 50.3 in July. China's final HSBC PMI also showed expansion in the vast manufacturing sector, coming in at 50.1 versus 47.7 in July. The upbeat factory data suggests the world's second largest economy is strengthening after a downturn earlier this year.

CASH CATTLE TRADED MOSTLY STEADY... Cash cattle traded at $123 in the Plains late last Friday, which was steady with the bulk of trade the previous week. Traders will need to wait until later this morning to get final sales totals, however, and there are some indications that showlists weren't completely cleaned up, especially in Texas.

CASH HOGS CALLED STEADY/WEAKER... Packers are expected to open the week offering steady to weaker bids for cash hogs across the Midwest as market-ready hog supplies are building seasonally. But if some plants are short-bought on slaughter needs coming out of the holiday weekend, they have incentive to raise bids as cutting margins are highly profitable.

WEEKEND DEMAND NEWS... Egypt purchased 355,000 MT of Russian, Ukrainian and Romanian wheat. Japan is seeking to buy 116,350 MT of U.S. and Canadian wheat in its weekly tender.


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