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Weekly Roberts Market Report

by 5m Editor
4 July 2012, at 7:15am

US - The corn market is reacting fiercely to the weather. It would be a good time to consider pricing another portion of the 2012 crop, writes Michael Roberts.

LEAN HOGS on the CME finished down with the exception of the nearby July 2012 contract. JULY’12LH futures closed at $96.900/cwt; up $0.275/cwt and $3.400/cwt higher than last report. AUG’12LH futures finished $0.20/cwt higher at $94.975/cwt and $6.225/cwt higher than last Monday’s close. The DEC’12LH contract closed at $80.450/cwt; up $0.150/cwt and $3.075/cwt higher than last report. Most contracts rose for the 5th straight day aided by bullish news in the Friday’s hogs and pigs report. USDA last Friday showed a smaller-than-expected-increase in the total size of the herd compared to this time last year. Hot weather seen as limiting growth was also supportive. According to HedgersEdge.com, the average packer margin was lowered $2.40/hd placed at a negative $11.00/head based on the average buy of $72.80/cwt vs. the breakeven of $68.74/cwt. The latest CME lean hog index was estimated at 102.11; down 0.54 but 0.10 higher than last Monday.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The JULY’12 contract closed at $6.924/bu; up 20.0¢/bu and 61.5¢/bu over last report. The DEC’12 contract closed at $6.556/bu; up 21.0¢/bu and 61.75¢/bu over last Monday’s close. Worries of lower yield potential continue to support prices. Funds were bullish but weakness in outside markets limited gains. Exports were neutral with USDA putting corn-exported-for-export at 22.214 mb vs. estimates for 20-24 mb and compared to the 35.4 mb needed to stay on pace with USDA projection demand estimates. See chart:

The market is reacting fiercely to the weather. It would be a good time to consider pricing another portion of the 2012 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed higher on Monday. The JULY’12 contract closed at $15.322/bu; up 19.5¢/bu and 49.75¢/bu over last Monday. NOV’12 futures closed at $14.380/bu; up 10.25¢/bu and 12.75¢/bu over last report. Weather and chart signals were supportive. Exports were neutral to bullish with USDA putting soybeans-inspected-for-export at 13.898 mb vs. estimates for 10-15 mb and the 13.3 mb needed to stay on par with USDA’s demand projections. Please see chart:

Weather will remain a factor but since soybeans are a later maturing crop than corn and there are some prospects for lower prices and profit taking.

WHEAT futures in Chicago (CBOT) closed up on Monday. JULY’12 wheat futures finished at $7.544/bu; up 15.5¢/bu and 30.25¢/bu over last report. The JULY’13 contract closed at $8.060/bu; up 8.25¢/bu and 26.75¢/bu over this time last week. Spillover from corn and soybeans and hot weather were supportive. Rumors that Russia is again lowering its grain production estimates were also supportive. Exports were neutral with USDA putting wheat-inspected-for-export at 21.466 mb vs. estimates for 18-24 mb. Technical signals for wheat futures are bullish.

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