Grain, livestock markets continue to respond to USDA reports

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article


Corn futures continued their bullish reaction to the December 11 release of USDA data. Their sharp upward revision in forecasts U.S. feed usage and a lower 2012-13 carryout probably powered the advance despite increased estimate of 2012 U.S. corn production and the substantially reduced export forecast. Bulls may also have been somewhat pleased with the weekly increase in corn export inspections. The short-term price outlook may depend upon technical considerations. That is, after topping chart resistance associated with its 10-day moving average over the weekend, March futures apparently encountered strong selling around its 40-day moving average today. March corn was trading 15 1/4 cents to $7.24 around midsession Monday, while December had edged 1/4 cent higher to $5.77 1/4.

CBOT soybean futures reacted rather poorly to the USDA data released last Friday, which probably reflected the negative nature of the domestic numbers. However, international traders seemed to be much more impressed with the 470,000 tonne reduction in the USDA forecast for ending-2013 global soybean carryout. The markets had risen strongly in Sunday night-Monday morning, then accelerated upward in reaction to news that China had bought 120,000 tonnes of beans for delivery in the current crop year. The resulting penetration of their 10-day moving averages probably sparked follow-through gains as well. March beans were trading 35 1/4 cents higher at $14.09 1/2 just before the lunch hour, while March soyoil had jumped 1.28 cents to 50.52 cents/pound and March meal was up $7.5 to $411.8/ton.

News that the USDA estimate of 2012 winter wheat plantings had fallen well short of industry forecast, as well as its cut to U.S. 2013 wheat carryout apparently boosted wheat futures last Friday and again today. The weekly export inspections result had little apparent impact upon the market. Concerns about the potential size of the winter wheat crop due to persistent drought over the Great Plains are reportedly offering support for U.S. wheat futures as well, although many traders are seemingly jumping upon the bullish bandwagon after the nearby contracts topped technical resistance over the weekend. March CBOT wheat leapt 16 1/4 cents to $7.71/bushel in Monday morning action, while March KCBT wheat jumped 17 1/4 cents to $8.24 1/4 and March MGE futures climbed 10 1/2 cents to $8.55 3/4.

Live cattle futures lost considerable ground last week due to surprising cash weakness at that time. And while some may be worried about the underlying supply/demand situation, most are probably anticipating growing tightness through the first quarter. That may partially explain the modest gains posted in Monday morning activity at the CME. Bulls may also be reacting to the concurrent jump in grain and soy complexes, since those imply commensurate increases in feed costs to the livestock industry. February cattle were actually unchanged at 130.60 cents/pound this morning, while April gained 0.20 cents to 134.75.

Anticipation of short-term strength cash and/or wholesale strength may have boosted February lean hog futures in early-week trading, although the bounce seems rather premature in the wake of last developments experienced last week. That is, we would prefer to see evidence of seasonal wholesale strength before becoming interested in sponsoring the long side of the market. Deferred futures were very likely responding to the prospect of increased feed costs implied by the grain and soybean gains being posted this morning. February hogs rose 0.60 cents to 84.80 cents/pound by mid-morning, while June futures had inched 0.12 cents higher to 96.62.


Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...


Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


NORAC UC4.5™ & UC5™ Precision Spray Height Control

NORAC offers two Spray Height Control systems that can be installed on most sprayer models. UC5™ is an ISOBUS system ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form