|
|
|
USDA once again exceeded the expectations of market watchers by finally acknowledging what many have suspected for months. Last Thursday’s Crop Production and Supply and Demand reports were uniformly bullish for grains, as USDA lowered the average national corn yield to 153 bushels per acre, about even with last year, but nearly six bushels less than last month’s report and nine below trendline. That reduced the anticipated fall harvest to 12.91 billion bushels, well under pre-report estimates, though still bigger than last year. However, many analysts now believe that further downward adjustments are likely in future reports from USDA. For the week ended Tuesday, September Corn futures were up nearly 36 cents, with the new-crop December up 39. Ending stocks were also cut for the coming market year, reflecting the reduction in yields. Tempering the bullish aspects of the USDA reports was the continued weakness of the economy, energy markets and stock market.
Soybean values were also higher this week, with September up nearly 47 cents, while the November gained almost 50 and January was up more than 51 cents. USDA also slashed anticipated soybean yields for this fall, dropping the size of the estimated crop to 3.05 billion bushels, down 273 million bushels from last year and bringing 2012 endings stocks to an incredibly tight 155 million bushels.
Wheat prices also soared this week, but mostly in sympathetic response to corn and soybeans. Numbers in the USDA reports were on the bullish side, but within expectations, so most of the boost came from support by corn and soybeans. For the week ended Tuesday, September Wheat futures in Chicago were up more than 61 cents, with December up almost 57. In Kansas City, the September and December contracts were up more than 62 cents, with March up almost 52. The continued drought in the Southern Plains is now starting to affect plans for wheat sowing this fall, with many areas of Texas, Oklahoma and Kansas simply without any hope of raising a winter wheat crop unless moisture starts to fall in significant amounts very soon.
Cattle markets responded positively to the stronger grain markets. That made sense for Live Cattle futures, as higher cost of production will likely increase prices for fed cattle down the road, but the strength of Feeder Cattle was a surprise. For the week ended Tuesday, August Live Cattle futures were up $3.17, with October up $2.35 and December up $1.27. Cash fed cattle traded last week at $116-117, up three to four bucks compared to the previous week and early indications are for another gain this week. Tempering the support from the grain markets was the anticipation of increased numbers of fed cattle in the fall and winter, as stocker cattle came off drought-riddled pastures early and went on feed. Boxed beef cutout values were sharply higher this week, as the Choice gained $9.38 and Select was up $9.91.
Feeder Cattle futures were much stronger than expected, given the price of grain, but tight numbers of feeder cattle are still driving expectations of higher prices. August futures were up $2.35 for the week, with the September up $2.62 and October up $3.12. Cash feeder cattle are also higher, with early week auctions up $2 to $6 depending on weight and class.
Hog prices are near steady but starting to weaken as increased supplies and weakening demand take hold. October Lean Hog futures gained 27 cents compared to last Tuesday, with the December down 17 cents. Cash butchers in Red Oak traded on Tuesday at $71.
This Friday, USDA releases the Aug. 1 Cattle on Feed report, but it will likely take a big deviation from expectations to have much of an effect on cattle prices, given the extreme swings seen in the grain and financial markets lately.
USDA once again exceeded the expectations of market watchers by finally acknowledging what many have suspected for months. Last Thursday’s Crop Production and Supply and Demand reports were uniformly bullish for grains, as USDA lowered the average national corn yield to 153 bushels per acre, about even with last year, but nearly six bushels less than last month’s report and nine below trendline. That reduced the anticipated fall harvest to 12.91 billion bushels, well under pre-report estimates, though still bigger than last year. However, many analysts now believe that further downward adjustments are likely in future reports from USDA. For the week ended Tuesday, September Corn futures were up nearly 36 cents, with the new-crop December up 39. Ending stocks were also cut for the coming market year, reflecting the reduction in yields. Tempering the bullish aspects of the USDA reports was the continued weakness of the economy, energy markets and stock market.
Soybean values were also higher this week, with September up nearly 47 cents, while the November gained almost 50 and January was up more than 51 cents. USDA also slashed anticipated soybean yields for this fall, dropping the size of the estimated crop to 3.05 billion bushels, down 273 million bushels from last year and bringing 2012 endings stocks to an incredibly tight 155 million bushels.
Wheat prices also soared this week, but mostly in sympathetic response to corn and soybeans. Numbers in the USDA reports were on the bullish side, but within expectations, so most of the boost came from support by corn and soybeans. For the week ended Tuesday, September Wheat futures in Chicago were up more than 61 cents, with December up almost 57. In Kansas City, the September and December contracts were up more than 62 cents, with March up almost 52. The continued drought in the Southern Plains is now starting to affect plans for wheat sowing this fall, with many areas of Texas, Oklahoma and Kansas simply without any hope of raising a winter wheat crop unless moisture starts to fall in significant amounts very soon.
Cattle markets responded positively to the stronger grain markets. That made sense for Live Cattle futures, as higher cost of production will likely increase prices for fed cattle down the road, but the strength of Feeder Cattle was a surprise. For the week ended Tuesday, August Live Cattle futures were up $3.17, with October up $2.35 and December up $1.27. Cash fed cattle traded last week at $116-117, up three to four bucks compared to the previous week and early indications are for another gain this week. Tempering the support from the grain markets was the anticipation of increased numbers of fed cattle in the fall and winter, as stocker cattle came off drought-riddled pastures early and went on feed. Boxed beef cutout values were sharply higher this week, as the Choice gained $9.38 and Select was up $9.91.
Feeder Cattle futures were much stronger than expected, given the price of grain, but tight numbers of feeder cattle are still driving expectations of higher prices. August futures were up $2.35 for the week, with the September up $2.62 and October up $3.12. Cash feeder cattle are also higher, with early week auctions up $2 to $6 depending on weight and class.
Hog prices are near steady but starting to weaken as increased supplies and weakening demand take hold. October Lean Hog futures gained 27 cents compared to last Tuesday, with the December down 17 cents. Cash butchers in Red Oak traded on Tuesday at $71.
This Friday, USDA releases the Aug. 1 Cattle on Feed report, but it will likely take a big deviation from expectations to have much of an effect on cattle prices, given the extreme swings seen in the grain and financial markets lately.
