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Weekly Roberts Market Report

by 5m Editor
2 November 2011, at 8:27am

US - Corn, soybean and wheat futures closed down on Monday, writes Michael T. Roberts.

LEAN HOGS on the CME closed up on Monday with the exception of the December 2012 contract. The DEC’11LH contract closed at $97.475/cwt; up $0.800/cwt. MAY’12LH futures closed at $98.300/cwt; up $0.050/cwt.

Friday’s cash price boost was supportive amid soft wholesale demand. Exports are supportive.

USDA put the lean hog carcass price at $97.00; off $0.02.

According to HedgersEdge.com, the average packer margin was raised $5.00/head to a positive $11.45/head based on the average buy of $65.71/cwt vs. the average breakeven of $69.91/cwt.

CORN futures on the Chicago Board of Trade (CBOT) finished down on Monday. The DEC’11 contract closed at $6.470/bu; off 8.0¢/bu.

MAR’12 futures closed at $6.590/bu; down 8.0¢/bu. The DEC’12 contract closed down 8.5¢/bu at $6.074/bu.

A strengthening US dollar, falling equities, and trading jitters tied to the bankruptcy of global futures giant MF Global weighed on prices. Funds sold 9000 lots.

Exports were bearish with USDA putting corn-inspected-for-export at 27.736 mi bu vs. estimates for 28-33 mi bu. Corn prices still appear weak in the short run (see chart below).

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. NOV’11 soybean futures closed 9.5¢/bu lower at $12.074/bu.

The MAR’12 contract closed at $12.270/bu; off 8.75¢/bu. The same outside forces pulled at soybeans as they did for corn. Volume was light.

Additionally, larger-than-expected deliveries on first notice day were high.

Traders were expected between 200-400 lots. Traders expected continued high export competition from Brazil and built that into price bids.

However, USDA put soybeans-inspected-for-export at 48.518 mi bu vs. estimates for 39-42 mi bu. Good harvest numbers from the US and heavy Brazilian exports will continue to suppress soybean prices.

WHEAT futures in Chicago (CBOT) closed down on Monday. The DEC’11 contract closed at $6.282/bu; off 16.25¢/bu. JULY’12 wheat futures finished at $7.042/bu; down 14.75¢/bu.

A firm dollar and equity trouble in outside markets weighed on wheat prices. Volume was very light.

Rains in Ohio’s wheat belt hindering planting there could prove supportive.

Exports were neutral with USDA putting wheat-inspected-for-export at 20.820 mi bu vs. estimates for 15-21 mi bu. Looks like the short-run upside potential I pointed out two weeks ago has run its course.

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