ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Weekly Roberts Report

by 5m Editor
21 October 2009, at 6:09am

US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.

LEAN HOGS on the CME were mixed on Monday. The DEC’09LH contract closed off $0.050/cwt at $54.050/cwt but $0.225/cwt higher than a week ago. FEB’10LH futures finished at $60.850/cwt; up $0.025/cwt. Steady cash hogs are expected to be steady to firm this week. On Thursday USDA placed the average pork cutout at $56.20/cwt; up $0.08/cwt and $3.25/cwt over last report. The latest CME lean hog index was placed at $50.95/cwt; up $0.33/cwt but $0.20/cwt lower than this time last week. Bear spreads were tied to pre-weekend position squaring and market uncertainty into next week. According to HedgersEdge.com the average pork plant margin was raised $4.85/head from last week to a positive $8.55/head. This was based on the average buy of $36.74/cwt vs. the average breakeven price of $39.94/cwt.

CORN futures on the Chicago Board of Trade (CBOT) finished higher on Monday. DEC’09 corn futures finished at $3.862/bu; up 14.25¢/bu and 5.0¢/bu higher than last Monday. The MAY’10 contract closed at $4.070; up 14.5¢/bu and 6.0¢/bu higher than last Monday. Corn futures were supported by a weaker dollar and prospects for colder, wet weather in the US Corn Belt. A cheap US dollar makes US exports like corn cheaper to overseas buyers and attracts investment buying in commodities as a hedge against inflation. The rally ran out of steam near the close as recent weather forecasts improved to more farm friendly conditions. Late Monday USDA published its crop progress report. Corn was placed at 83 per cent vs. 92 per cent this time last year and the five year average of 97 per cent. USDA put the US corn harvest at 17 per cent complete vs. 28 per cent this time last year and the five year average of 48 per cent. Exports were bearish with USDA reporting corn-inspected-for-export at 24.569 mi bu vs. estimates between 30-35 mi bu. Cash corn bids were up amid slow farmer sales. Farmers are waiting on better prices. Cash corn bids in the US Mid-Atlantic states ranged of 14.0¢/bu – 23.0¢/bu higher. Funds sold almost 7,000 contracts with large speculators increasing net bull positions by 33,400 lots. It might be a good idea to sell another 10 per cent of the ’09 crop taking you to 80 per cent sold.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed higher on Monday. NOV’09 soybean futures closed at $9.962/bu; up 18.75¢/bu but 2.75+¢/bu lower than last report. The MAR’10 soybean contract closed at $10.030/bu; up 17.75¢/bu and 2.75¢/bu over last report. Exports and weather concerns were supportive. USDA placed soybeans-inspected-for-export at 39.092 mi bu vs. expectations for 18-25 mi bu. China purchased 30.885 mi bu of total US exports. Late on Monday USDA placed the US soybean harvest at 30 per cent. According to many floor traders this was expected. The five-year average for the US harvest is 72 per cent for this time of year. Cash soybean prices were steady to firm amid slow farmer selling. Funds bought just over 4,000 contracts while large speculators switched to net bull positions by 38,052 lots. Consider getting the ’09 crop 80 per cent sold.

WHEAT futures in Chicago (CBOT) were up on Monday. DEC’09 futures closed at $5.176/bu; up 19.0¢/bu and 32.0¢/bu higher than last report. The JULY’10 wheat contract closed at $5.400/bu; up 23.75¢/bu and 23.75¢/bu cents higher than last Monday. Corn/wheat spreading was noted. USDA put wheat-inspected-for-export at 18.672 mi bu vs. expectations for 17-20 mi bu. Egypt tendered for over 50,000 tonnes (1.8 mi bu) while Bangladesh tendered for 100,000 tonnes (3.6 mi bu). Drought is becoming extreme in Australia while US weather has turned good for new crop development and storage. Weather conditions are just right for US farmers. Funds bought about 4,000 contracts while large speculators cut bear positions by 12,600 lots. It is a very good idea to get another 10 per cent of the ’10 crop priced taking you to 80 per cent priced at this time.