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Weekly Roberts Market Report

by 5m Editor
22 June 2011, at 5:03am

US - Last week’s higher cash hog and pork markets were supportive and pushed futures to a seven- week high.

LEAN HOGS on the CME closed up on Monday. The JULY’11LH contract closed at $97.550/cwt; up $1.900/cwt. AUG’11LH futures closed at $96.675/cwt; up $1.825/cwt and $4.300/cwt higher than last report. Last week’s higher cash hog and pork markets were supportive and pushed futures to a seven- week high. Cash hogs were $0.50/cwt-$1/cwt higher. A seasonal reduction in supply is seen as limiting marketings. Additionally, the average weights on hog slaughter are tapering off. USDA put the pork cutout at $95.77/cwt; up $2.8396/cwt and $5.06/cwt higher than last report. According to HedgersEdge.com, the average packer margin was raised $3.60/head to a negative $4.75/head based on the average buy of $70.73/cwt vs. the average breakeven of $68.99/cwt. The latest CME lean hog index was placed at $93.68; up $1.17 and $3.11 higher than this time last week.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The JULY’11 contract closed at $7.004/bu; up 0.25 ¢/bu but 82.0 ¢/bu lower than a week ago. The DEC’11 contract closed at $6.604/bu; down 0.5 ¢/bu and 44.0 ¢/bu lower than this time last week. Short covering and support from rising crude oil prices broke a five-session losing streak in CBOT corn. Exports were supportive with USDA putting corn-inspected-for-export at 42.978 mi bu vs. trade estimates for 29.0-33.0 bu. USDA late Monday rated the US corn crop in good-to-excellent condition at 70 per cent, up 1 per cent from last Monday and in line with trader’s expectations. Soils are saturated with good moisture but rain in the forecast in the major US corn growing states has given traders cause for flooding concern. After interviewing several ethanol industry players today I have come to the conclusion that the US ethanol seems to be shrugging of the US subsidy loss recently nixed by Congress. Makes one think they had it good too long. Some ethanol producers are making plans to shut down production in order to cut supply and boost prices. Cash corn prices have leveled off due to slower demand. Falling futures and users scaling back on poor margins are keeping basis in check. The tightest corn supplies in 15 years have corn prices near $8/bu.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed higher on Monday. The JULY’11 contract closed at $13.356/bu; up 2.75 ¢/bu but 476.0 ¢/bu lower than last report. NOV’11 soybean futures closed 5.25 ¢/bu higher at $13.354/bu but 41.25 ¢/bu lower than last report. A short-covering bounce by speculators lifted the market on Monday. Firm cash markets in Brazil on recent Brazilian exports to China were supportive. USDA increased the good-to-excellent condition for the US crop to 68 per cent. China canceled a buy of 120,000 tonnes (4.41 mi bu) for 2010/11 delivery due to high delivery costs. Meanwhile USDA put soybeans-inspected for-export at 4.182 mi bu vs. expectations for 9-10 mi bu. Rain forecasts are expected to help develop the US crop … if not too much falls. Floods in the Missouri River valley are still causing delivery interruptions. Signs of price weakness continue to show.

WHEAT futures in Chicago (CBOT) closed down on Monday. JULY’11 futures finished 13.0/bu lower at $6.592/bu and 83.75 ¢/bu lower than last report. The DEC’12 contract closed at $7.452/bu; off 8.0 ¢/bu and 71.25 ¢/bu lower than this time a week ago. Technical selling, good crop development weather and harvest pressured prices. USDA put wheat inspected-for-export at 20.918 mi bu vs. trade estimates for 19-23 mi bu. Libya rebels reportedly bought 100,000 tonnes (3.67 mi bu) of US wheat. Jordan bought the same amount, while Saudi Arabia said Monday it would buy 360,000 tonnes (13.2 mi bu). US crops are turning out to be better than expected on recent harvest reports. Wheat prices are lower as U.S crops look to be in better shape than expected. Lastly poor economic conditions in Europe are slowing global demand for wheat. Wheat prices should continue to weaken if harvest numbers stay good and good crop prospects continue the status quo in Europe.