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Weekly Roberts Report

by 5m Editor
24 February 2010, at 5:04am

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

LEAN HOGS on the CME finished up on Monday. APR’10LH futures finished at $70.300/cwt; up $0.650/cwt and $1.525/cwt higher than two weeks ago. The MAY’10LH contract closed up $0.800/cwt at $76.900/cwt and $2.200/cwt over last report. June finished a one-month high. Consumers continue to drive strong retail pork demand as the US economy continues to struggle and people continue in their unemployment. Fund buying was somewhat supportive. USDA on Friday put the average pork price at $70.92/cwt; up $1.46/cwt and $1.80/cwt over last report. The latest CME lean hog index was placed at $67.16/lb; up $0.03/lb and $1.20/lb over week before last. According to HedgersEdge.com, the average pork plant margin was lowered $1.70/hd from last report to a positive $3.20/hd. This was based on the average buy of $49.40/cwt vs. the average breakeven price of $50.61/cwt. It would be a good idea to check on buying feed at this time as corn and soybeans are seen preening for a spring-time run up.

CORN futures on the Chicago Board of Trade (CBOT) ended up on Monday. The MAY’10 contract closed at $3.826; up 11.0¢/bu and 15.25¢/bu higher than last report. DEC’10 corn futures closed up 9.25¢/bu at $4.080/bu and 1.75¢/bu higher than two weeks ago. Pushing through highs, technical momentum and trader’s expectations for good demand were supportive. Weather forecasts for heavy rains hurting the South American crop and the potential for heavy flooding after winter snows in the US corn-belt provided additional support in Chicago. Several floor traders said today that they think this corn market might be finished with the downtrend and may be turning for the spring run-up. Funds were optimistic also buying 20,000 lots taking them to near even in short vs. long positions. USDA put corn-inspected-for-export at 43.189 mi bu, exceeding export expectations of 27-31 mi bu. Cash corn was steady in both the US Midwest and the Mid-Atlantic states. It might be wise to hold off on any more 2010 corn crop sales at this time.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The MAR’10 soybean contract closed at $9.614/bu; up 16.5¢/bu; and 3.25¢/bu higher than last report. NOV’10 futures were up 9.75¢/bu at $9.356/bu and 24.25¢/bu higher than week before last. Short covering on profit taking and fundamental worries over harvest delays in South America supported prices. Flooding expected from a record snow pack in the US Midwest also drove traders to buy soybean futures. Exports were neutral as USDA put soybeans-inspected-for-export at 34.990 mi bu vs. expectations for 30-35 mi bu. Outside market weakness in crude oil and gold limited gains. Funds bought 6,000 contracts cutting net short positions to 17,988 lots, down 252 contracts. Cash beans in the US Midwest were steady to firm on slow farmer selling. It would be a good idea to hold off on any more sales at this time.

WHEAT futures in Chicago (CBOT) finished up on Monday. MAR’10 futures closed at $5.012/bu; up 11.5¢/bu and 17.25¢/bu over last report. The JULY’10 wheat contract closed at $5.276/bu; up 11.0¢/bu and 16.25¢/bu higher than two weeks ago. Higher corn and soybean markets, as well as technical buying on short covering were supportive. However, several floor sources today told me they didn’t think that the gains could be sustained amid continued burdensome global stocks and massive short positions held by speculative funds. Funds were net short 65,303 lots as of Feb. 16; down from a record 74,767 contracts. Exports were neutral with USDA placing wheat-inspected-for-export at 17.708 mi bu vs. expectation for 14-18 mi bu. It definitely would be a good idea to get another 10 per cent of the 2010 crop sold at this time bringing the total amount sold to 60 per cent.