8 July 2013

12 minute read

North America

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The JULY’13 contract closed at $6.554/bu; down 23.75¢/bu but 2.5¢/bu over last report. SEP’13 corn futures closed at $5.314/bu; down 15.75¢/bu and 47.75¢/bu lower than last Monday. The DEC’13 contract closed at $5.012/bu; down 9.75¢/bu and 45.25¢/bu lower than a week ago. CME corn futures were pressured lower by follow-through-selling, good crop growing weather, and last Friday’s acreage report showing corn planted area for all purposes in 2013 up slightly from last year at 97.4 mi acres. This represents the highest planted acreage in the US since 1936 when planted corn acres were estimated at 102 mi acres. USDA estimated harvest acres at 89.1 mi acres for grain, up 2 per cent from last year. Short-covering and loss-reductions were noted by commercial traders and fund respectively. USDA put corn-inspected-for-export at 14.818 mb vs. estimates for 4-9 mb. This should be viewed as bullish for corn exports as it was more than the 13.3 mb needed to keep USDA’s export-demand forecast of 700 mb. Please see chart:

The national average basis for corn was steady at +$1.15/bu over CBOT September futures. It would be a good consideration to price another 10 per cent of the 2013 corn crop at this time. That would price up to 30 per cent on previous suggestions and cover 2013 cost of production.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed mixed on Monday with the two nearby contracts closing up and the rest closing down. The JULY’13 contract closed at $15.704/bu; up 6.0¢/bu and 57.75¢/bu higher than a week ago. NOV’13 futures closed at $12.432/bu; off 8.75¢/bu and 30.5¢/bu lower than last report. Even though soybean planted acres were estimated by USDA last Friday at a record high 77.7 mi acres this is only up 1 per cent. Pit sources said before the USDA report was released traders expected soybean acres to increase by up to 2.5 per cent due to wet weather. USDA increased expected harvest area to 76.9 mi acres; up 1 per cent from 2012 and would be a record high if realized. Record high acreage is estimated in New York, Pennsylvania, and South Dakota. A bearish fundamental outlook is the result. USDA put soybeans-inspected-for-export at 4.518 mb vs. estimates for 207 mb. This should be viewed as bullish as it was slightly below the 4.8 mb needed this week to stay on pace with USDA’s demand projection of 1.330 bb. Please see chart:

Cash soybeans firmed +90.0¢/bu over CBOT August futures. Consideration should be given to pricing another 10 per cent of the 2013 crop. If priced at 25 per cent of the 2013 crop to date planting costs should be covered.

WHEAT futures in Chicago (CBOT) closed mixed on Monday with 2014 deferreds gainers beginning with JUL’14 wheat futures. The JULY’13 contract closed at $6.456/bu; down 2.75¢/bu and 33.5¢/bu lower than last report. DEC’13 wheat futures closed at $7.6.692 /bu; down 2.25¢/bu and 32.75¢/bu lower than a week ago. The JULY’14 contract closed at $6.994/bu; up 1.5¢/bu. Wheat futures were pressured by a 1 per cent increase in 2013 all wheat acres planted over 2012. Futures were pressured by the USDA report, harvest, short-covering, and profit-taking. Exports are viewed as bullish with USDA putting wheat-inspected-for-export at 26.420 mb vs. estimates for 14-20 mb. This was above the 18.7 mb needed this week to stay on pace with USDA’s export demand projection of 975 mb. Wheat basis for Soft Red Winter wheat basis was placed at -35.0¢/bu under CBOT September futures. Hard Red Winter Wheat basis was placed at -23.0¢/bu under Kansas City September futures. Hard Red Spring Wheat was placed at -29.0¢/bu under Minneapolis September futures. It would be a good consideration to price the 2013 crop. It doesn’t appear as if storage would pay at this time.

DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed up on Monday. JUNE’13DA futures closed at $18.04/cwt; even with Friday’s close but $0.01/cwt higher than a week ago. The JULY’13DA contract closed at $17.37/cwt; up $0.49/cwt and $0.03/cwt over last report. NOV’13 futures closed at $18.30/cwt; up $0.15/cwt but $0.09/cwt lower than this time last week. Milk futures were supported by hotter weather expected to reduce milk production, lower feed price expectations, and gains in the cash cheese markets. Short-covering and some profit taking was noted. Interest in cheese improved last Friday and carried through to Monday. Butter price increases were unexpected but welcome. Class III futures are: 3 months out = $17.91/cwt ($0.12/cwt higher than last report); 6 months out = $18.23/cwt ($0.12/cwt over a week ago); 9 months out = $18.01/cwt ($0.06/cwt over this time last week); and 12 months out = $17.80/cwt ($0.05/cwt over last report). Grain buyers should consider buying hand-to-mouth supplies for a couple more weeks to see where grains are going.

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) closed up on Monday. The AUG’13LC contract closed at $122.175/cwt; up $0.150/cwt and $1.000/cwt over last report. The FEB’14LC contract closed at $129.200/cwt; up $0.425/cwt and $1.600/cwt higher than this time last week. Rebounds from Friday’s declines on a supportive cash market holding generally steady from last week and good gains in feeders were supportive. Pit sources said this was an indicator of steady-to-firm demand and were optimistic it would lead to higher wholesale orders. Just hear a TV ad, “Tonight, we’re eating steak!” USDA put boxed beef prices at $196.64/cwt; down $0.86/cwt from Friday and $2.61/cwt lower than a week ago. USDA put the 5-area average price on Monday at $120.57/cwt; $0.15/cwt under last report. Please see chart:

The latest HedgersEdge packer margin was lowered $7.25/head from last report to a positive $70.55/head based on a $120.58/cwt buy vs. a breakeven of $125.51/cwt. Grain buyers should consider buying hand-to-mouth supplies for a couple more weeks to see where grains are going.

FEEDER CATTLE at the CME finished up on Monday. The AUG’13FC contract closed at $151.225/cwt; up $1.775/cwt and $3.550/cwt over last report. NOV’13FC futures closed at $156.025/cwt; up $1.525/cwt and $3.175/cwt over this time last week. Feeders spiked sharply higher Monday supported by further losses in feed grains and commercial buying interest. Feeders hit nine-week highs in the fall and winter contracts. For Monday 07/01/13 estimated receipts at the Oklahoma City market were put at 7,000 head vs. 10,088 head last week and 1,687 head this time last year. Feeder steers and heifers treaded $3-$5/cwt higher. Demand was very good for feeder cattle. Steer and heifer calves were not well tested. Quality was plain-to-average. The latest CME index was estimated at 139.22 lb; up 1.490/lb and 2.47/lb over last report. Please see chart:

This table shows the maximum price a producer could pay for feeder cattle and still break even, assuming the costs and conversion/performance factors listed above. Producers should remain aware that calculations are based on averages. Courtesy DTN.

LEAN HOGS on the CME finished down on Monday. The JUL’13LH contract closed at $101.075/cwt; down $0.200/cwt but $0.125/cwt over last report. OCT’13LH futures closed at $85.800/cwt; even with last Friday’s close but $0.050/cwt lower than this time last week. Lean hogs were modestly lower as traders turned bearish on supply-growth concerns for 2013-14. Profit taking also weighed on prices following recent sharp gains. Lower grain prices were supportive. Cash hogs were steady-to-weaker with packers reporting amply supply for the holiday. Following a normal seasonal trend slaughter weights were on the decline. This is viewed as supportive. The latest CME two-day lean hog index was placed at 103.38/lb; off 0.01/lb and 0.61 lower than this time last week. The latest HedgersEdge packer margin was raised $3.90/head to a positive $13.90/head based on a $73.61/cwt buy vs. a breakeven of $78.66/cwt.

This table shows the maximum price a producer could pay for feeder pigs and still break even, assuming the costs and conversion/performance factors listed above. Producers should remain aware that calculations are based on averages. Courtesy DTN.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The JULY’13 contract closed at $6.554/bu; down 23.75¢/bu but 2.5¢/bu over last report. SEP’13 corn futures closed at $5.314/bu; down 15.75¢/bu and 47.75¢/bu lower than last Monday. The DEC’13 contract closed at $5.012/bu; down 9.75¢/bu and 45.25¢/bu lower than a week ago. CME corn futures were pressured lower by follow-through-selling, good crop growing weather, and last Friday’s acreage report showing corn planted area for all purposes in 2013 up slightly from last year at 97.4 mi acres. This represents the highest planted acreage in the US since 1936 when planted corn acres were estimated at 102 mi acres. USDA estimated harvest acres at 89.1 mi acres for grain, up 2 per cent from last year. Short-covering and loss-reductions were noted by commercial traders and fund respectively. USDA put corn-inspected-for-export at 14.818 mb vs. estimates for 4-9 mb. This should be viewed as bullish for corn exports as it was more than the 13.3 mb needed to keep USDA’s export-demand forecast of 700 mb. Please see chart:

The national average basis for corn was steady at +$1.15/bu over CBOT September futures. It would be a good consideration to price another 10 per cent of the 2013 corn crop at this time. That would price up to 30 per cent on previous suggestions and cover 2013 cost of production.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed mixed on Monday with the two nearby contracts closing up and the rest closing down. The JULY’13 contract closed at $15.704/bu; up 6.0¢/bu and 57.75¢/bu higher than a week ago. NOV’13 futures closed at $12.432/bu; off 8.75¢/bu and 30.5¢/bu lower than last report. Even though soybean planted acres were estimated by USDA last Friday at a record high 77.7 mi acres this is only up 1 per cent. Pit sources said before the USDA report was released traders expected soybean acres to increase by up to 2.5 per cent due to wet weather. USDA increased expected harvest area to 76.9 mi acres; up 1 per cent from 2012 and would be a record high if realized. Record high acreage is estimated in New York, Pennsylvania, and South Dakota. A bearish fundamental outlook is the result. USDA put soybeans-inspected-for-export at 4.518 mb vs. estimates for 207 mb. This should be viewed as bullish as it was slightly below the 4.8 mb needed this week to stay on pace with USDA’s demand projection of 1.330 bb. Please see chart:

Cash soybeans firmed +90.0¢/bu over CBOT August futures. Consideration should be given to pricing another 10 per cent of the 2013 crop. If priced at 25 per cent of the 2013 crop to date planting costs should be covered.

WHEAT futures in Chicago (CBOT) closed mixed on Monday with 2014 deferreds gainers beginning with JUL’14 wheat futures. The JULY’13 contract closed at $6.456/bu; down 2.75¢/bu and 33.5¢/bu lower than last report. DEC’13 wheat futures closed at $7.6.692 /bu; down 2.25¢/bu and 32.75¢/bu lower than a week ago. The JULY’14 contract closed at $6.994/bu; up 1.5¢/bu. Wheat futures were pressured by a 1 per cent increase in 2013 all wheat acres planted over 2012. Futures were pressured by the USDA report, harvest, short-covering, and profit-taking. Exports are viewed as bullish with USDA putting wheat-inspected-for-export at 26.420 mb vs. estimates for 14-20 mb. This was above the 18.7 mb needed this week to stay on pace with USDA’s export demand projection of 975 mb. Wheat basis for Soft Red Winter wheat basis was placed at -35.0¢/bu under CBOT September futures. Hard Red Winter Wheat basis was placed at -23.0¢/bu under Kansas City September futures. Hard Red Spring Wheat was placed at -29.0¢/bu under Minneapolis September futures. It would be a good consideration to price the 2013 crop. It doesn’t appear as if storage would pay at this time.

DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed up on Monday. JUNE’13DA futures closed at $18.04/cwt; even with Friday’s close but $0.01/cwt higher than a week ago. The JULY’13DA contract closed at $17.37/cwt; up $0.49/cwt and $0.03/cwt over last report. NOV’13 futures closed at $18.30/cwt; up $0.15/cwt but $0.09/cwt lower than this time last week. Milk futures were supported by hotter weather expected to reduce milk production, lower feed price expectations, and gains in the cash cheese markets. Short-covering and some profit taking was noted. Interest in cheese improved last Friday and carried through to Monday. Butter price increases were unexpected but welcome. Class III futures are: 3 months out = $17.91/cwt ($0.12/cwt higher than last report); 6 months out = $18.23/cwt ($0.12/cwt over a week ago); 9 months out = $18.01/cwt ($0.06/cwt over this time last week); and 12 months out = $17.80/cwt ($0.05/cwt over last report). Grain buyers should consider buying hand-to-mouth supplies for a couple more weeks to see where grains are going.

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) closed up on Monday. The AUG’13LC contract closed at $122.175/cwt; up $0.150/cwt and $1.000/cwt over last report. The FEB’14LC contract closed at $129.200/cwt; up $0.425/cwt and $1.600/cwt higher than this time last week. Rebounds from Friday’s declines on a supportive cash market holding generally steady from last week and good gains in feeders were supportive. Pit sources said this was an indicator of steady-to-firm demand and were optimistic it would lead to higher wholesale orders. Just hear a TV ad, “Tonight, we’re eating steak!” USDA put boxed beef prices at $196.64/cwt; down $0.86/cwt from Friday and $2.61/cwt lower than a week ago. USDA put the 5-area average price on Monday at $120.57/cwt; $0.15/cwt under last report. Please see chart:

The latest HedgersEdge packer margin was lowered $7.25/head from last report to a positive $70.55/head based on a $120.58/cwt buy vs. a breakeven of $125.51/cwt. Grain buyers should consider buying hand-to-mouth supplies for a couple more weeks to see where grains are going.

FEEDER CATTLE at the CME finished up on Monday. The AUG’13FC contract closed at $151.225/cwt; up $1.775/cwt and $3.550/cwt over last report. NOV’13FC futures closed at $156.025/cwt; up $1.525/cwt and $3.175/cwt over this time last week. Feeders spiked sharply higher Monday supported by further losses in feed grains and commercial buying interest. Feeders hit nine-week highs in the fall and winter contracts. For Monday 07/01/13 estimated receipts at the Oklahoma City market were put at 7,000 head vs. 10,088 head last week and 1,687 head this time last year. Feeder steers and heifers treaded $3-$5/cwt higher. Demand was very good for feeder cattle. Steer and heifer calves were not well tested. Quality was plain-to-average. The latest CME index was estimated at 139.22 lb; up 1.490/lb and 2.47/lb over last report. Please see chart:

This table shows the maximum price a producer could pay for feeder cattle and still break even, assuming the costs and conversion/performance factors listed above. Producers should remain aware that calculations are based on averages. Courtesy DTN.

LEAN HOGS on the CME finished down on Monday. The JUL’13LH contract closed at $101.075/cwt; down $0.200/cwt but $0.125/cwt over last report. OCT’13LH futures closed at $85.800/cwt; even with last Friday’s close but $0.050/cwt lower than this time last week. Lean hogs were modestly lower as traders turned bearish on supply-growth concerns for 2013-14. Profit taking also weighed on prices following recent sharp gains. Lower grain prices were supportive. Cash hogs were steady-to-weaker with packers reporting amply supply for the holiday. Following a normal seasonal trend slaughter weights were on the decline. This is viewed as supportive. The latest CME two-day lean hog index was placed at 103.38/lb; off 0.01/lb and 0.61 lower than this time last week. The latest HedgersEdge packer margin was raised $3.90/head to a positive $13.90/head based on a $73.61/cwt buy vs. a breakeven of $78.66/cwt.

This table shows the maximum price a producer could pay for feeder pigs and still break even, assuming the costs and conversion/performance factors listed above. Producers should remain aware that calculations are based on averages. Courtesy DTN.