ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Weekly Roberts Report

by 5m Editor
27 January 2011, at 12:20am

US - Poultry supply is increasing. This meat protein competes for pork sales when supply is ample and retail prices are cheaper.

LEAN HOGS on the CME finished mixed on Monday. The FEB’11LH contract closed up $0.325/cwt at $80.650/cwt. The APR’11LH contract closed at $86.250/cwt; down $0.325/cwt. AUG’11LH futures closed at $96.500/cwt; up $0.125/cwt. Poultry supply is increasing. This meat protein competes for pork sales when supply is ample and retail prices are cheaper. USDA on Friday put the pork cutout at $85.64/cwt; down $0.31/cwt. According to HedgersEdge.com, the average packer margin was placed at a positive $15.95/hd based on the average buy of $55.70/cwt vs. the average breakeven of $61.50/cwt. The latest CME lean hog index was placed at 76.14 ¢ /lb; up 0.32 ¢ /lb.

CORN futures on the Chicago Board of Trade (CBOT) finished lower on Monday with deferreds from December 2011 on finishing even with last Friday’s close. The MAR’11 contract closed at $6.552; off 2.0 ¢ /bu. The DEC’11 contract closed at $5.872; even with last Friday’s close. Profit taking, wheat/corn spreading, waning ethanol profits, and lower crude oil markets pressured prices. Exports were neutral with USDA putting corn-inspected-for-export at 25.87 mi bu vs. expectations of 20-26 mi bu. News reports from Japan indicate Chubu Shiryo, a livestock feeder, will cut corn in animal feed due to high costs. Brazil reported satisfactory corn crop weather while Argentina forecasts show much needed rain mid-week. Funds sold near 5,000 lots. Ending stocks are near 15-year lows due to strong demand and lower-than-expected yields. Traders think that farmers will consider planting more corn next spring so they are taking some profits now. Corn is expected to compete for soybean and wheat acres this spring. It might be a good idea to price another 10 per cent of the 2011 crop taking you to 80 per cent covered.

SOYBEAN futures on the Chicago Board of Trade (CBOT) finished down on Monday. The MAR’11 contract closed at $14.044/bu; off 7.75 ¢ /bu. NOV’11 soybean futures closed off 11.5 ¢ /bu at $13.366/bu. Profit taking, prospects for better weather in Argentina weighed on prices as strong demand for soybeans from China supported prices. Funds sold just over 6000 lots on a market saturated with bull positions. Brazil soybean growing areas were getting plenty of rain filling out the crop. Exports were supportive with USDA putting soybeans-inspected-for-export at 42.08 mi bu vs. expectations for 35-40 mi bu. It is a great opportunity to speculate with the remaining 40 per cent of the 2011 crop.

WHEAT futures in Chicago (CBOT) closed up on Monday. The MAR’11 wheat contract closed at $8.352/bu; up 10.75 ¢ /bu. JULY’11 futures finished up 12.0 ¢ /bu at $8.786/bu. Strong export demand from North African and Arab countries, awful wheat-crop-conditions in Australia, and drought concerns in China are supportive. Funds bought 2,500 lots. USDA placed wheat-inspected-for-export at 23.07 mi bu vs. expectations for 22-28 mi bu. With weather problems in the other countries the US is seen as one of the last remaining placed to find high-quality wheat. Drought put the hurt on Russia’s crop last summer while heavy rains are hurting the quality of Australian and Canadian wheat. If you haven’t priced up to 75 per cent of the 2011 crop yet now is the time.

Sponsored content