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Weekly Roberts Market Report

by 5m Editor
26 April 2012, at 6:16am

US - Lower soybean exports from South America and rumors that Brazil will halt exports this week were supportive, writes Michael T. Roberts.

LEAN HOGS on the CME finished up on Monday. MAY’12LH futures closed at $88.525/cwt; up $0.575/cwt but $0.025/cwt lower than this time last week. AUG’12LH futures finished $0.450/cwt higher at $88.950/cwt but $1.200/cwt lower than last report. Futures gained on an increase in wholesale prices and a somewhat supportive supply report. Slowing export growth in China is giving indications that pork prices will continue to languish. Spring grilling is expected to pick up soon. Last Friday, USDA’s Cold Storage report put freezer stocks down slightly but 7 per cent more than this time last year. USDA put the pork carcass cutout at $77.41/cwt, off $0.68/cwt and $0.43/cwt lower than a week ago. Monday, April 23 USDA placed hogs processing at 413,000 head vs. 413,000 last week and 273,000 a year ago. Cash hogs were steady-to-unchanged with some locations reporting weaker prices. Packer buying remains cautious due to poor packer margins. According to HedgersEdge.com, the average packer margin was raised $2.05/hd to a negative $11.25/head based on the average buy of $59.99/cwt vs. the breakeven of $55.91/cwt. The latest CME lean hog index was estimated at 79.01; down 0.56; and 3.63 under last report.



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.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The JULY’12 contract closed at $6.224/bu; up 10.0¢/bu and 9.25¢/bu higher than last Monday’s close. The DEC’12 contract closed at $5.454/bu; up 8.75¢/bu and 19.025¢/bu higher than last report. Exports, speculative buying new crop corn, and continued commercial buying of old crop contracts were supportive. Funds decreased net-bull positions to 210,431 lot down 28,838 contracts. Corn basis was steady-to-firm with end users raising bids trying to keep grain flowing. Farmer selling is slow due to early corn crop plantings. Exports were bullish with USDA putting corn-inspected-for-export at 29.386 mi bu vs. estimates for 28-34 mi bu. Weekly exports needed 3this week 3.8 mi bu to stay on pace with USDA export demand expectations. See chart.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The MAY’12 contract closed at $14.372/bu; down 9.5¢/bu but 17.25¢/bu higher than last report. NOV’12 futures closed at $13.414/bu; down 14.5¢/bu and 8.75¢/bu lower than a week ago. Lower exports from South America and rumors that Brazil will halt exports this week were supportive. US exports were weak with USDA announcing soybeans-inspected-for-export at 12.005 mi bu vs. estimates for 19-25 mi bu. Weekly inspections needed to be 11.5 mi bu to stay on pace with USDA’s 1.29 bi bu demand projection. See chart.

WHEAT futures in Chicago (CBOT) closed up on Monday. The MAY’12 contract closed at $6.250/bu; up 9.25¢/bu and 8.75¢/bu higher than this time last Monday. JULY’12 wheat futures finished at $6.324/bu; up 9.25¢/bu and 11.25¢/bu higher than a week ago. Exports, risk of frost damage to US crops and increasing Chinese demand for US wheat were supportive. Compared to this time last year US exports to China for the first quarter of 2012 exports increased more than fifty times over. USDA put wheat-inspected-for-export at 24.391 mi bu vs. estimates for 16-22 mi bu. The weekly export pace needed to stay on pace with USDA’s 1.0 bi bu demand projection is 18.5 mi bu.

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