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Grain prices blasted higher again this past week, as traders and analysts become ever more convinced that the fall harvest of corn and soybeans is going to be a major disappointment. Expanding areas of drought, the true impact of flooding on harvestable acres and yield, and other weather factors are becoming clearer to futures traders, and that clearing vision looks like record prices to many of them. December Corn futures closed Tuesday, Aug. 30, at more than $7.75 and eight dollar new-crop corn is now on the minds of many, if not most grain merchandisers. The September corn contract gained more than 33 cents for the week ended Tuesday, with the December up nearly 32 and March up more than 32 cents. One of the biggest questions now on the minds of market-watchers is whether the struggling economy can afford these price levels, or if a slackening of demand could result in a price retrenchment later.
Soybean values were up on the same factors as corn, as the September futures contract gained nearly 60 cents for the week, with new-crop November up nearly 58 cents and January up 60. Export demand now seems to be gaining steam for soybeans and there is now speculation that South American farmers could reduce soybean plantings and increase their corn acreage due to the price spreads between the commodities.
Wheat was the weak sister this week, as Chicago markets lost seven cents in the September contract and gained about six in the December. In Kansas City, the Southern Plains drought drove values higher compared to Chicago, as the September contract gained more than 26 cents, while the December gained nearly 27. Good global supplies of wheat helped keep prices from skyrocketing, but corn/wheat price spreads could soon have many livestock producers substituting more wheat into their rations, which could return spreads to more normal levels.
Livestock prices were mixed to lower in the past week, with a weak economy and high grain prices putting on most of the pressure. Hog prices took the biggest hit, as October Lean Hog futures dropped $2.52 compared to last Tuesday, while the December lost $1.17. Cash butchers in Red Oak were down four bucks in the past week, trading at $65 on Tuesday.
Feeder Cattle futures were also lower, almost entirely on the higher costs of gain expected from high feed prices. The September contract lost an even dollar in the past week, while the October was off $1.35 and November lost $1.42. But fears of short numbers of fall yearlings and calves had cash auctions mixed, with Oklahoma City on Monday calling the feeder calf market higher. Feedlots seem to fear empty pens more than the likelihood of losing money on every head that leaves the feedyard, supporting cash prices and making feeder basis levels much stronger than normal.
Fed cattle prices were mostly lower for the week ended Tuesday, but the expiring August Live Cattle futures were the exception, gaining 15 cents for the week. The October contract lost 52 cents and December was down 17. Poor demand from the domestic economy was offset by the continued increase in exports of beef and by worries about futures supplies of fed cattle. Last week’s cash fed cattle trade was down about a dollar, at mostly $113, while boxed beef cutout values also fell. The Choice cutout dropped $2.54 for the week, with the Select down $5.35.
Ag markets will have Monday off, celebrating the end of summer along with the rest of the nation. But the economy, and of course weather, will likely be the main factors affecting prices for the remainder of this week, as well as next.
Grain prices blasted higher again this past week, as traders and analysts become ever more convinced that the fall harvest of corn and soybeans is going to be a major disappointment. Expanding areas of drought, the true impact of flooding on harvestable acres and yield, and other weather factors are becoming clearer to futures traders, and that clearing vision looks like record prices to many of them. December Corn futures closed Tuesday, Aug. 30, at more than $7.75 and eight dollar new-crop corn is now on the minds of many, if not most grain merchandisers. The September corn contract gained more than 33 cents for the week ended Tuesday, with the December up nearly 32 and March up more than 32 cents. One of the biggest questions now on the minds of market-watchers is whether the struggling economy can afford these price levels, or if a slackening of demand could result in a price retrenchment later.
Soybean values were up on the same factors as corn, as the September futures contract gained nearly 60 cents for the week, with new-crop November up nearly 58 cents and January up 60. Export demand now seems to be gaining steam for soybeans and there is now speculation that South American farmers could reduce soybean plantings and increase their corn acreage due to the price spreads between the commodities.
Wheat was the weak sister this week, as Chicago markets lost seven cents in the September contract and gained about six in the December. In Kansas City, the Southern Plains drought drove values higher compared to Chicago, as the September contract gained more than 26 cents, while the December gained nearly 27. Good global supplies of wheat helped keep prices from skyrocketing, but corn/wheat price spreads could soon have many livestock producers substituting more wheat into their rations, which could return spreads to more normal levels.
Livestock prices were mixed to lower in the past week, with a weak economy and high grain prices putting on most of the pressure. Hog prices took the biggest hit, as October Lean Hog futures dropped $2.52 compared to last Tuesday, while the December lost $1.17. Cash butchers in Red Oak were down four bucks in the past week, trading at $65 on Tuesday.
Feeder Cattle futures were also lower, almost entirely on the higher costs of gain expected from high feed prices. The September contract lost an even dollar in the past week, while the October was off $1.35 and November lost $1.42. But fears of short numbers of fall yearlings and calves had cash auctions mixed, with Oklahoma City on Monday calling the feeder calf market higher. Feedlots seem to fear empty pens more than the likelihood of losing money on every head that leaves the feedyard, supporting cash prices and making feeder basis levels much stronger than normal.
Fed cattle prices were mostly lower for the week ended Tuesday, but the expiring August Live Cattle futures were the exception, gaining 15 cents for the week. The October contract lost 52 cents and December was down 17. Poor demand from the domestic economy was offset by the continued increase in exports of beef and by worries about futures supplies of fed cattle. Last week’s cash fed cattle trade was down about a dollar, at mostly $113, while boxed beef cutout values also fell. The Choice cutout dropped $2.54 for the week, with the Select down $5.35.
Ag markets will have Monday off, celebrating the end of summer along with the rest of the nation. But the economy, and of course weather, will likely be the main factors affecting prices for the remainder of this week, as well as next.
