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Weekly Roberts Market Report

by 5m Editor
5 October 2011, at 7:11am

US - Corn futures on the Chicago Board of Trade (CBOT) finished mixed on Monday (3 October), while dairy class futures on the Chicago Mercantile Exchange (CME) closed down, writes Michael T. Roberts.

CORN futures on the Chicago Board of Trade (CBOT) finished mixed on Monday. The DEC’11 contract closed at $5.924/bu; even with last Friday’s close but 56.75 ¢ /bu lower than a week ago. MAR’12 futures closed at $6.060/bu; up 0.25 ¢ /bu but 55.25 ¢ /bu lower than this time last week.

The DEC’12 contract closed down 3.25 ¢ /bu at $5.624/bu and 27.0 ¢ /bu lower than a week ago. The contract limit expanded to 60.0 ¢ /bu on Monday after the limit down trading last Friday.

News that China is expected to triple corn purchases offset bearish exports numbers. USDA put corn-inspected-for-export at 28.443 mi bu vs. estimates for 30-35 mi bu.

Even though large funds reduced long holdings in CBOT corn on Monday it should be noted that they have held long positions for the last four consecutive weeks.

This should prove price supportive later on. Put options would make a good price floor mechanism. However, upside potential may be in the offing.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed mostly down on Monday with the exception of the May 2012 and the July 2012 contracts. NOV’11 soybean futures closed 1.5 ¢ /bu lower at $11.774/bu; and 82.25 ¢ /bu under last report.

The MAR’12 contract closed at $11.980/bu; down 0.25 ¢ /bu and 80.0 ¢ /bu lower than a week ago. Friday’s extended sell-off was encouraged by a firm US dollar. More large funds sold contracts but are still net bullish.

Selling was triggered by forecasts for good harvest weather. In addition, Brazil’s 2011/12 soybean crop is forecast to be a record 75.2 mi tonnes (2.763 bi bu).

USDA late Monday put soybeans-inspected- for-export at 10.599 mi bu vs. estimates of nine to 14 mi bu. Price floors implemented by Put options might be a very good consideration at this time.

WHEAT futures in Chicago (CBOT) finished up on Monday. The DEC’11 contract closed at $6.194/bu; up 10.25 ¢ /bu but 28.75 ¢ /bu lower than last report.

JULY’12 wheat futures finis hed at $7.6.926/bu; up 16.0 ¢ /bu but 11.75 ¢ /bu lower this time last week. Fund buying was supportive.

Late Monday USDA put wheat-inspected- for-export at 22.079 mi bu vs. estimates for 22-27 mi bu. Global wheat supplies are ample and look to be that way for a while.

LEAN HOGS on the CME closed down on Monday with the exception of the October 2012 futures contract. OCT’11LH futures closed at $93.125/cwt; down $0.25/cwt but $4.625/cwt over last report.

The DEC’11LH contract closed at $86.800/cwt; off $0.725/cwt but $3.800/cwt over last report. MAY’12LH futures closed at $96.50/cwt; down $0.750/cwt but $1.00/cwt higher than a week ago.

Recent gains may be offset later this week by profit taking on weak cash hog prices. USDA on Monday put the cash pork price at $98.32/cwt; up $0.26/cwt but $0.52/cwt over last report.

Traders took profits as stronger-thanexpected pork exports rallied hog futures through a time of year when seasonal prices are normally in a period of decline. A broad sell-off in stocks also weighed on prices.

According to HedgersEdge.com, the average packer margin was lowered $3.75/hd from last report to a positive $11.35/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 $91.30; up $0.22 and $0.38 higher than this time last week.