First Thing Today (VIP) -- September 9, 2013

September 9, 2013 01:05 AM


BEANS HIGHER, CORN AND WHEAT LOWER OVERNIGHT... As of 6:30 a.m. CT, corn futures are 1 to 3 cents lower, soybeans are 7 to 10 cents higher and wheat futures are 2 to 4 cents lower. The U.S. dollar index is modestly weaker this morning.

WASHINGTON FOCUS IS ON SYRIA; TRADERS' FOCUS IS ON USDA REPORTS THURSDAY... Lawmakers return from their five-week summer recess and the main focus will be on the situation in Syria. President Obama on Tuesday is scheduled to make his case on the situation to the U.S. public, while the Senate is expected to vote on a resolution on Wednesday. Otherwise, there are no major hearings on tap but the farm bill and House nutrition bill will continue to percolate. For agriculture, Thursday is the big day as USDA will release its monthly Crop Production and Supply & Demand Reports. That will be a key update as the data gathered for the crop estimates was collected as temps heated up in dry areas of the Corn Belt.

CHINESE SOY IMPORTS DROP IN AUGUST, BUT SHARPLY ABOVE YEAR-AGO... China imported 6.37 MMT of soybeans in August, according to official customs data. While soy imports were down 11.5% from July, they were 44.1% higher than year-ago. Through the first eight months of this calendar year, China has imported 41.05 MMT of soybeans, a 4.4% increase from year-ago.

ECONOMIC DATA MORE PROOF CHINA'S ECONOMY IS STABILIZING... Chinese exports rose 7.2% from year-ago in August, while imports increased 7%, resulting in the trade surplus widening to $28.6 billion from $27.2 billion in July. Chinese exports and the trade surplus were stronger than anticipated. Meanwhile, China's consumer price index (CPI) came in 2.6% above year-ago in August, which was in line with expectations. Food prices rose 4.7% over year-ago last month while non-food prices increased 1.5%. China's producer price index (PPI) was 1.6% under year-ago in August.

CHINA TO START STOCKPILING NEW-CROP COTTON... China will start stockpiling cotton from this year's crop as part of the government reserves program, according to the China Cotton Association who cited a notice from the government. The government will reportedly buy cotton from farmers at 20,400 yuan ($3,300) per ton. There has been talk recently China would end its cotton stockpiling program in favor of a farmer-subsidy policy.

COOL UPDATE... The U.S. still has not implemented the final rule for Country of Origin Labeling (COOL) that USDA finalized in May. The matter is being challenged both domestically and internationally. Several U.S. and Canadian meat/livestock groups filed for a preliminary injunction to prevent USDA from implementing the rule on the grounds it violates first amendment speech rights and that USDA doesn't have the authority. U.S. District Court Judge Ketanji Jackson is expected to decide within the next two weeks on the injunction request. Meanwhile, a WTO panel will likely rule in early 2013 on whether the USDA rule brings the U.S. into compliance with a prior WTO ruling against the U.S. COOL law.

CASH CATTLE TRADED STEADY/WEAKER... Cattle traded at steady $123 prices in Kansas and Texas late Friday, while prices in Nebraska were slightly lower than the previous week. While tightening feedlot supplies are supportive, last week's steady to weaker cash prices will limit buying interest in cattle futures.

CASH HOGS CALLED MOSTLY STEADY... Packers are expected to open the week offering steady prices for cash hogs at most Midwest locations. While market-ready hog numbers should be building seasonally, unseasonably hot temps are limiting weight gains and slowing hog movement.

WEEKEND DEMAND NEWS... South Korea purchased 293,000 MT of corn -- 134,000 MT U.S. or South American and 189,000 MT optional origin.


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