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Weekly Roberts Market Report

by 5m Editor
29 June 2011, at 6:48am

US - Wholesale beef and pork prices have weakened amid slowing demand. Processors look to have most of their needs already filled for the upcoming holiday.

LEAN HOGS on the CME closed down on Monday. The JULY’11LH contract closed at $94.150/cwt; down $1.850/cwt and $3.40/cwt lower than a week ago. AUG’11LH futures closed at $92.350/cwt; down $2.850/cwt and $4.325/cwt lower than last report. Profit taking and a weaker global economy pressured prices. Wholesale beef and pork prices have weakened amid slowing demand. Processors look to have most of their needs already filled for the upcoming holiday. USDA on Friday raised hogs on US farms as of June 1 0.6 per cent vs. expectations for a 0.2 per cent increase. USDA put the pork cutout at $99.06/cwt; down $0.21/cwt but $3.29/cwt higher than last report. According to HedgersEdge.com, the average packer margin was lowered $3.50/head to a negative $8.25/head based on the average buy of $74.50/cwt vs. the average breakeven of $71.43/cwt. The latest CME lean hog index was placed at $100.98; up $1.82 and $7.30 higher than this time last week.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The JULY’11 contract closed at $6.606/bu; off 9.25 ¢/bu and 39.75 ¢/bu lower than a week ago. The DEC’11 contract closed at $6.266/bu; down 5.25 ¢/bu and 33.75 ¢/bu lower than this time last week. Long liquidation on global economic worries such as the second Greek debt crisis, Chinese inflation, and slow US growth weighed on futures. Funds took money out of grain and livestock commodities cutting net bull positions in CBOT corn by 22 per cent from last week. Fundamental demand from the livestock and ethanol sectors remains strong while expensive US corn limits exports. US livestock producers are buying less expensive wheat to feed. USDA put corn-inspected-for-export at 28.9 mi bu vs. expectations for 30-35 mi bu. Analysts expect US corn stocks as of June 1 to be 3.302 bu, the smallest on record since 2004. Looks like prices most likely have topped amid continued downward pressure. Expect corn markets to remain extremely sensitive to acreage reports and weather reports.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed higher on Monday. The JULY’11 contract closed at $13.296/bu; up 9.5 ¢/bu but 6.0 ¢ /bu lower than last report. NOV’11 soybean futures closed 5.75 ¢/bu higher at $13.150/bu but 20.5 ¢/bu lower than last report. Soybean futures went up despite negative outside market influences on old-crop export sales to China. Short covering, buying on chart signals, and strong exports were supportive. USDA put soybeans-inspected-for-export at 8.732 mi bu vs. expectations for 6-8 mi bu. China was a major buyer of US soybeans. Soy prices in Rosario, Argentina ended up on stronger local demand. Soybean prices will most likely be tested by the next USDA report.

WHEAT futures in Chicago (CBOT) closed down on Monday. JULY’11 futures finished 13.0 /bu lower at $6.226/bu and 36.75 ¢/bu lower than last report. The DEC’12 contract closed at $6.956/bu; off 9.75 ¢/bu and 49.75 ¢/bu lower than this time a week ago. Global economic weakness is limiting demand and encouraging long liquidation by large funds. Additionally, European wheat prices were sharply lower on concerns about economic woes. They are withdrawing liquidity from the market. US wheat stocks are expected to be down as much as 15 per cent in the next USDA report. USDA put wheat-inspected-for-export at 20.61 mi bu vs. estimates for 20-23 mi bu. Funds increased net bear position in CBOT wheat. As expected, wheat prices have continued to weaken.