ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Weekly Roberts Report

by 5m Editor
14 September 2010, at 12:00am

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

LEAN HOGS on the CME closed down on Monday. OCT’10LH futures finished at $76.300/cwt; down $0.950/cwt. The FEB’11LH contract closed off $0.50/cwt at $77.575/cwt. Hogs followed live cattle and the DOW early in trading but succumbed to selling pressure when those markets slipped after noon. Index fund rolling added pressure. USDA put the average cash pork price at $89.85/cwt; down $0.40/cwt. The latest lean hog index was placed at 82.47/lb; off 0.61/lb. Cash hog prices were weaker; down $2/cwt. According to HedgersEdge.com, the average packer margin was lowered $9.90/head to a positive $11.60/hd based on the average buy of $60.28cwt vs. the average breakeven of $64.51/cwt.

CORN futures on the Chicago Board of Trade (CBOT) finished mixed Monday with deferreds past July 2011 down and nearbys to that contract gaining. The SEPT’10 contract closed at $4.692/bu; up 5.25¢/bu. DEC’10 corn futures closed up 5.25¢/bu at $4.834/bu. The DEC’11 contract closed at $4.560/bu; down 3.25¢/bu. Tightening US corn stocks, lower yields forecast by USDA, good exports, and wet weather seen as slowing the US harvest were supportive. USDA last week lowered the expected US corn yield by 2.5 bu to 165.0 bu/ac. If realized, this would result in the lowest ending-stocks-to-use ratio in 15 years. In addition, USDA put corn-inspected-for-export at 36.314 mi bu vs. 38-42 mi bu. Large funds climbed to record-large net bull positions at 333,214 contracts after buying 13,000 lots. Cash corn basis was flat amid slow farmer selling. While this may not be the top of the corn market it would be a good idea to price up to 80 per cent of the 2010 crop while holding at 60 per cent sold in the 2011 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. SEP’10 soybean futures finished up 1.75¢/bu at $10.252/bu. NOV’10 futures closed at $10.344/bu, up 3.5¢/bu. NOV’11 soybean futures closed up 5.0¢/bu at $10.270/bu. Soybeans were supported by higher corn and wheat, higher outside markets in crude oil, a weaker dollar, and short-covering. The rally was limited by seasonal pressure ahead of a harvest that USDA says will be larger than thought last month. Exports were disappointing with USDA placing soybeans-inspected-for-export at 6.971 mi bu vs. 13-16 mi bu. Large funds increased net bull positions with funds buying 2,000 lots. It would be a good idea to price up to 40 per cent of the 2011 crop.

WHEAT futures in Chicago (CBOT) closed up on Monday. The SEPT’10 wheat contract closed at $7.136/bu; up 9.0¢/bu. JULY’11 futures finished up 2.2¢/bu at $7.440/bu. Wheat climbed to highs on active exports amid declining US global production even though Australia is expecting a record crop. A weaker US dollar was supportive. USDA put wheat-inspected-for-export at 30.009 mi bu vs. expectations for 22-25 mi bu. Funds shifted from net-bear to net-bull positions buying 3,000 lots. It would be a very good idea to get to 85 per cent sold in the 2011 crop if not done so already.