Weekly Roberts Market Report

by 5m Editor
29 September 2011, at 8:09am

US - While corn, wheat, feeder and live cattle closed up on Monday, dairy class futures closed down, writes Michael T. Roberts.

LEAN HOGS on the CME closed mixed on Monday. OCT’11LH futures closed at $88.500/cwt; down $0.30/cwt but $0.65/cwt over last report. The DEC’11LH contract closed at $83.000/cwt; off $0.725/cwt but $1.175/cwt over last report.

MAY’12LH futures closed at $95.500/cwt; up $0.500/cwt but $0.40/cwt lower than a week ago. Slowing momentum of near-term demand amid supportive signs encouraged volatility.

Seasonally hog prices should begin falling in October and November as producers expand production in the cooler weather. Supplies will begin to outpace demand from meat packers until fundamentals equalize.

Increased prices in beef could push consumers back to pork however. Late Monday USDA put the pork cutout at $97.8/cwt, down $0.03/cwt but $2.44/cwt over last report.

According to, the average packer margin was raised $4.65/hd from last report to a positive $15.15/head based on the average buy of $64.89/cwt vs. the average breakeven of $70.53/cwt. The latest CME lean hog index was placed at $90.92; up $0.03 and $3.23 higher than this time last week.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The DEC’11 contract closed at $6.480/bu; up 9.5 ¢ /bu but 44.25 ¢ /bu lower than a week ago.

MAR’12 futures closed at $6.612/bu; up 9.25 ¢ /bu but 43.75 ¢ /bu lower than this time last week. The DEC’12 contract closed up 11.0 ¢ /bu at $5.894/bu but 28.25 ¢ /bu lower than a week ago.

Exports, oversold technicals, and higher cash corn prices were supportive. USDA put corn-inspected-for-export at 34.282 mi bu vs. expectations for 27- 31 mi bu.

Large speculators are leaving corn positions on a sinking economy and indications that farmers will plant more than 94 mi acres of corn next year, the most since World War II.

There may be some support near the end of the week as speculators buy back previously sold positions. Corn producers should probably hold off pricing any more corn at this time.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were mixed on Monday with deferreds beyond September 2012 down and nearbys up. NOV’11 soybean futures closed 19.5 ¢ /bu lower at $12.596/bu; 1.75 ¢ /bu up but 76.5 ¢ /bu over last report.

The MAR’12 contract closed at $12.780/bu; up 1.5 ¢ /bu but 67.0 ¢ /bu lower than a week ago. Exports were not supported with USDA putting soybeansinspected-for-export at 7.418 mi bu vs estimates of 10-12 mi bu.

Losses were pared after the market fell to 10-month lows on technical selling. Trading was brisk in volume of 180,000 contracts; 12 per cent over the previous 30-day average. It still looks like soybeans may become cheaper sooner rather than later.

WHEAT futures in Chicago (CBOT) finished up on Monday. The DEC’11 contract closed at $6.482/bu; up 7.5 ¢ /bu and 10.75 ¢ /bu higher than last report.

JULY’12 wheat futures finished at $7.042/bu; up 6.25 ¢ /bu but 35.0 ¢ /bu lower this time last week.

Exports were neutral with USDA putting wheatinspected-for-export at 21.605 mi bu vs estimates for 20-25 mi bu.

Short covering, oversold conditions, and dry conditions in the southern US plains were supportive. Wheat prices edged higher on sluggish buying. Pit sources said concerns over economic recession are held prices up. Global supplies show some signs of tightening. End users should consider pricing near-term needs.