First Thing Today (VIP) -- September 6, 2012

September 6, 2012 01:33 AM


CORN AND WHEAT FIRMER, BEANS WEAKER... As of 6:30 a.m. CT, corn futures are trading mostly 4 to 6 cents higher, soybeans 3 to 7 cents lower, Chicago wheat 3 to 12 cents higher, Kansas City wheat 6 to 9 cents higher and Minneapolis wheat 4 to 9 cents higher. The U.S. dollar index is mildly favoring the downside in quiet trade ahead of the European Central Bank's announcement on monetary policy at 6:45 a.m. CT.

FC STONE LOWERS CORN PEG, RAISES SOY FORECAST... Brokerage firm FC Stone revised its corn and soybean crop estimates, taking into account a survey of the firm's customers and other factors. FC Stone now forecasts U.S. corn production at 10.607 billion bu. (121.4 bu. per acre yield) and the soybean crop at 2.739 billion bu. (36.7 bu. yield). In August, the firmed pegged the corn crop at 11.043 billion bu. (124.3 bu. yield) and the soybean crop at 2.730 billion bu. (36.2 bu. yield).

BLACK SEA REGION UPDATE... On Wednesday, Ukraine's government and grain exporters agreed to limit grain exports to 19.4 MMT, including 4 MMT of wheat. But that level of wheat exports is likely to be reached by November, which has some traders expecting Ukraine to announce soon wheat export restrictions for 2013 to prevent a surge in domestic prices. Meanwhile, Russia's deputy ag minister reiterated there are no plans to restrict grain exports, as supplies will be enough to meet domestic and export needs.

FAO REVISES WORLD PRODUCTION FORECASTS, FOOD PRICE INDEX UNCHANGED... The United Nations Food and Agriculture Organization (FAO) revised down its world cereal grain forecast by 4.2% to 2.295 billion MT. FAO cut its world wheat forecast by 2.2% to 663 MMT. The FAO world food price index averaged 213 in August, unchanged from July. Meanwhile, G20 leaders will meet in October to discuss the global grain supply situation and price outlook. While no emergency measures are planned at the meeting, the leaders will discuss whether joint actions are needed.

CASH CATTLE NEGOTIATIONS SLOW TO DEVELOP... Packers and feedlots have been slow to establish bids and asking prices, although it's clear packers would like to get cattle bought at cheaper prices, while feedlots want higher prices for this week's supplies. With the boxed beef market showing strength, feedlots seem to have the upper hand in cash negotiations, but active trade is not expected until Friday.

PORK CUTOUT PLUNGES... The pork cutout value plunged $2.57 Wednesday as all cuts expect ribs were moderately to sharply lower. While packers moved a strong 144 loads of product on the day and cutting margins are deep in the black, abundant market-ready hog supplies will keep the cash hog market under pressure.

WEEKLY EXPORT SALES REPORT DELAYED... Due to Monday's holiday, weekly export sales data for the week ended Aug. 28 is delayed until Friday morning.

OVERNIGHT DEMAND NEWS... Japan purchased 124,951 MT of U.S., Canadian and Australian wheat in its weekly tender. Japan also bought 44,690 MT of feed wheat and 93,500 MT of feed barley. Egypt tendered for optional origin wheat.


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