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The commodity markets celebrated Christmas in style, as every futures contract we track rose significantly in value this past week. Soybeans were the biggest gainer, with nearby contracts up about 55 cents compared to last week and new-crop November up almost 40. Much of those gains came, Tuesday, after a long weekend of hot, dry weather in South America that is threatening the growing crop there. Export sales are also good and there are some signs of the commodity funds stepping back into the long side of the market. The lower volume of trade during the holiday period also meant any strong move by bulls or bears was likely to be magnified.
Wheat values were also stronger, particularly in Kansas City, despite good moisture falling on much of the Southern Plains crop. The K.C. March and May futures were both up about 28 cents and new-crop July gained almost 29. In Chicago, the March and May contracts picked up about 18 cents for the week ended Tuesday. Limited exports kept a lid on wheat prices, but the strength of soybeans was enough to lift wheat prices as well.
Corn futures were also sharply higher, with the March contract up more than 26 cents for the week, while the May and July gained about 25 and new-crop December of 2012 rose almost 14 cents. The weather in Brazil and Argentina, fund buying and the underlying factor of short corn supplies on a global basis, all helped pull corn prices higher.
Cattle prices were sharply higher in the week before Christmas, but gave up some of their gains on Tuesday. February Live Cattle were up $2.55 for the week ended Tuesday, with the April contract up $2.15 and June up $2.75. Some of the strength came from higher cash sales last week, but there is a downside to that as well. Very few fed cattle traded in the Southern Plains last week, although the ones that did were up four to five bucks at $123. But those limited trade numbers showed that packers as well as feeders were willing to dig in their heels and hold out for more profitable prices. Given the weakness of the cattle markets Monday, the packers may end up winning this round. Healthier numbers traded in the North last week, with the bulk of the dressed trade at $202, up as much as eight dollars compared to the previous week. The severe weather across the southern feeding areas helped feedlots hold on, knowing that slaughter weights would likely suffer if cattle were sent to market too soon after the storms, but it also means bigger showlists for the short work schedules this week and next. Boxed beef cutout values were up this week as well, with the Choice up $1.07 and Select up $2.97.
Feeder Cattle futures were also higher this week, although higher grain prices put a lid on gains. The January contract was up $2.82 compared to last Tuesday, with the March up $2.75 and April up $2.47. Cash feeder trade was at a near standstill for the holidays and won’t get going again until next week.
Lean Hog futures also rose this week, with the February contract up $1.65 and April up $1.62. Cash markets for hogs were also limited during the holiday period. The Hogs and Pigs report released on Friday by USDA was essentially ignored by the thin holiday trade, although the size of the breeding herd, which remained static, while analysts were expecting some expansion, could pave the way for better markets down the road.
The last week of the year will be even more unpredictable than usual, due to high volatility and thinly traded markets, with outside markets potentially holding even more sway than normal. Have a safe and happy New Year and see you in 2012.
The commodity markets celebrated Christmas in style, as every futures contract we track rose significantly in value this past week. Soybeans were the biggest gainer, with nearby contracts up about 55 cents compared to last week and new-crop November up almost 40. Much of those gains came, Tuesday, after a long weekend of hot, dry weather in South America that is threatening the growing crop there. Export sales are also good and there are some signs of the commodity funds stepping back into the long side of the market. The lower volume of trade during the holiday period also meant any strong move by bulls or bears was likely to be magnified.
Wheat values were also stronger, particularly in Kansas City, despite good moisture falling on much of the Southern Plains crop. The K.C. March and May futures were both up about 28 cents and new-crop July gained almost 29. In Chicago, the March and May contracts picked up about 18 cents for the week ended Tuesday. Limited exports kept a lid on wheat prices, but the strength of soybeans was enough to lift wheat prices as well.
Corn futures were also sharply higher, with the March contract up more than 26 cents for the week, while the May and July gained about 25 and new-crop December of 2012 rose almost 14 cents. The weather in Brazil and Argentina, fund buying and the underlying factor of short corn supplies on a global basis, all helped pull corn prices higher.
Cattle prices were sharply higher in the week before Christmas, but gave up some of their gains on Tuesday. February Live Cattle were up $2.55 for the week ended Tuesday, with the April contract up $2.15 and June up $2.75. Some of the strength came from higher cash sales last week, but there is a downside to that as well. Very few fed cattle traded in the Southern Plains last week, although the ones that did were up four to five bucks at $123. But those limited trade numbers showed that packers as well as feeders were willing to dig in their heels and hold out for more profitable prices. Given the weakness of the cattle markets Monday, the packers may end up winning this round. Healthier numbers traded in the North last week, with the bulk of the dressed trade at $202, up as much as eight dollars compared to the previous week. The severe weather across the southern feeding areas helped feedlots hold on, knowing that slaughter weights would likely suffer if cattle were sent to market too soon after the storms, but it also means bigger showlists for the short work schedules this week and next. Boxed beef cutout values were up this week as well, with the Choice up $1.07 and Select up $2.97.
Feeder Cattle futures were also higher this week, although higher grain prices put a lid on gains. The January contract was up $2.82 compared to last Tuesday, with the March up $2.75 and April up $2.47. Cash feeder trade was at a near standstill for the holidays and won’t get going again until next week.
Lean Hog futures also rose this week, with the February contract up $1.65 and April up $1.62. Cash markets for hogs were also limited during the holiday period. The Hogs and Pigs report released on Friday by USDA was essentially ignored by the thin holiday trade, although the size of the breeding herd, which remained static, while analysts were expecting some expansion, could pave the way for better markets down the road.
The last week of the year will be even more unpredictable than usual, due to high volatility and thinly traded markets, with outside markets potentially holding even more sway than normal. Have a safe and happy New Year and see you in 2012.
