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Weekly Roberts Report

by 5m Editor
5 October 2010, at 12:04am

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

LEAN HOGS on the CME finished down on Monday. OCT’10LH futures finished at $75.675/cwt; off $0.700cwt and $3.475/cwt lower than last Monday. The FEB’11LH contract closed down $1.225/cwt at $74.900/cwt and $5.08/cwt lower than last report. A stronger dollar, expectations for firm supplies, and lower cash prices weighed on prices. A stronger dollar makes US exports more expensive so importers look for other supply. Seasonally speaking hog supplies increase this time of year on good growing weather. US cash hogs were weaker to $1/cwt lower on slack buying interest. USDA put the average cash pork cutout price at $86.96/cwt, down $1.89/cwt and $3.19/cwt lower than this time last week. The latest CME lean hog index was placed at 82.66/lb, down 0.55/lb and1.01/lb lower than last report. According to HedgersEdge.com, the average packer margin was raised $3.35/head to a positive $15.05/hd based on the average buy of $56.95cwt vs. the average breakeven of $62.48/cwt.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. DEC’10 corn futures closed up 5.75¢/bu at $4.714/bu but 41.25¢/bu lower than last report. The MAR’11 contract closed at $4.830/bu; up 4.75¢/bu but 42.25¢/bu lower than last Monday. The DEC’11 contract closed at $4.662/bu; up 5.5¢/bu but 18.0¢/bu under than last Monday. Hedge fund and end user buying after recent declines were supportive while USDA in the last World Agriculture Supply Demand Estimate (WASDE) report raised corn ending stocks by about 3 bi bu keeping prices from becoming exuberant. Late Monday in the USDA crop report the US corn crop in good-to-excellent condition remained unchanged at 66 per cent while the US corn crop harvest progress was placed at 37 per cent vs. 21 per cent harvested this time last year. Drier weather in the US Midwest is aiding harvest progress. Exports were neutral with USDA placing corn-inspected-for-export at 35.487 mi bu vs. expectations for 33-40 mi bu. Cash corn bids were weak amid quiet farmer selling after the sell-off. Funds bought nearly 4,000 lots. Hopefully 90 per cent of the 2010 crop and 60 per cent of the 2011 were priced on the run up.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were mixed on Monday with contracts before July 2011 going bearish and those after bullish. NOV’10 futures closed at $10.540bu, down 3.0¢/bu and 74.5¢/bu lower than last report. The MAR’11 contract closed at $10.724/bu; off 2.5¢/bu and 73.25¢/bu lower than a week ago. NOV’11 soybean futures closed up 3.75¢/bu at $10.472/bu but 51.25¢/bu lower than last week at this time. Expectations for a large US crop, harvest pressure, a stronger US dollar, and good weather pressured 2010 soybean futures. Support came from end-user buying. Late Monday USDA put the US soybean crop at 37 per cent harvested vs. 28 per cent this time last year. News that Brazil’s 2010/11 soybean crop is estimated to be a record 69.1 mi tonnes (2.54 bi bu) pressured prices. USDA put soybeans-inspected-for-export at 16.360 mi bu vs. expectations for 15-19 mi bu. Cash soybeans were flat-to-weak amid sluggish farmer selling. Funds sold over 4,000 lots. Hopefully 90 per cent of the 2010 crop and 30 per cent of the 2011 crop have been sold.

WHEAT futures in Chicago (CBOT) finished down 23 per cent from recent highs on Monday. The DEC’10 wheat contract closed at $6.472/bu; down 7.25¢/bu and 59.25¢/bu lower than last Monday. JULY’11 futures finished off 5.5¢/bu at $6.964/bu and 38.25¢/bu lower than a week ago. Technical signals and countries buying non-US wheat continue to pressure prices. While pessimistic Canadian wheat crop estimates were supportive the news was offset by reports that Argentine wheat is thriving due to ample moisture. Floor sources said that buying corn and selling wheat in spread trades was the action of the day. Hopefully sales of 2011 wheat were advanced to 85 per cent last week. If not, there is still this week.