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The grain markets responded to last week’s Supply and Demand reports just about as predicted, which is unusual in the volatile markets experienced in the past couple of years. The S & D report showed a greater than expected decrease in soybean ending stocks and Soybean futures closed higher for the week ended Tuesday. The November contract was up more than 15 cents, with January up a dime and March up more than seven. Perhaps just as important was the decrease in carries from month to month. For example, the spread from November to January is now less than six cents, versus almost 11 cents last week. Those kind of changes are often seen as bullish, as commercial interests, that is soybean crushers and exporters, are having to pay higher prices to acquire stocks in the short-term, which could indicate even greater strength down the road. And the apparent difficulty in purchasing adequate stocks of beans doesn’t seem to be related to a slow harvest. On Monday, USDA reported that 69 percent of soybeans were already in the bin, which was well ahead of historical averages. On the negative side, slower than expected economic growth in China could limit that nation’s appetite for soybeans and other agricultural products.
Corn prices dipped slightly this past week, responding to a slight increase in ending stocks predicted by last week’s USDA reports. Like soybeans, the corn spreads also tightened, indicating that commercials wanted to buy more corn than was readily available. For the week ended Tuesday, December Corn futures lost a penny, while the March contract was down almost a nickel and May lost nearly seven cents. Corn harvest is also progressing at a faster than average pace, with almost half of the nation’s corn crop in the bin as of Sunday.
Last week’s S & D reports were bearish for wheat and traders took the information to heart. Compared to last Tuesday, Chicago December Wheat futures lost more than 35 cents, with March down nearly 39. In Kansas City, the December contract was down more than 18 cents, with March off more than 19 and May down more than 20 cents. Again, note the narrowing spreads, even as the market moved lower. Planting progress for winter wheat was a mixed bag, primarily as a result of farmer’s reactions to the Southern Plains drought. Texans seemed to be waiting for moisture before putting seed in the ground, while in Kansas farmers “dusted it in” in the hope of adequate moisture to get the crop up and going before winter sets in.
Livestock markets were mixed this past week, with hogs taking the market lead. December Lean Hog futures gained $4.17 for the week ended Tuesday, with the February up $2.50. Tight supplies of hogs and still strong export demand supported the futures markets this week, but that strength did not carry over into the cash market, with Red Oak cash butchers trading Tuesday at $61.50, down a half-dollar compared to last week.
Cash fed cattle were also softer last week, with the bulk of the feedlot trade at $119, down two dollars compared to the previous week. That coincided with soft boxed beef cutout values, as the Choice cutout gained just seven cents for the week and Select was down $3.09. The Choice/Select spread is now almost 19 dollars, unusually wide, especially for this time of year. Live Cattle futures were stronger than the cash trade, with the October contract down 65 cents for the week, while the December was up $1.70 and February gained $2.02. Tight packer margins are keeping nearby prices down, but traders are looking for better prices down the road. Early indications are for this week’s cash feedlot trade to be steady to stronger.
Feeder cattle prices were mostly higher this week, in both the cash and futures markets. The October futures contract finished Tuesday up $1.27 compared to last week, with the November contract up 27 cents and January up $1.95. Cash auction prices were also stronger, with yearlings up as much as five dollars at some auctions and the calf market stronger as well. Tight numbers of calves and yearlings, combined with softer corn prices and higher deferred Live Cattle futures all combined to pull feeder prices higher.
This Friday, USDA releases the Oct. 1 Cattle on Feed report. Once again, placements will likely be the most-watched number. In addition, cash movement of grains, as reflected by the futures price spreads will be important, and of course the “outside markets,” including the stock market, the European debt crisis and Chinese economic growth could completely overshadow the fundamentals of the ag markets at any time.
The grain markets responded to last week’s Supply and Demand reports just about as predicted, which is unusual in the volatile markets experienced in the past couple of years. The S & D report showed a greater than expected decrease in soybean ending stocks and Soybean futures closed higher for the week ended Tuesday. The November contract was up more than 15 cents, with January up a dime and March up more than seven. Perhaps just as important was the decrease in carries from month to month. For example, the spread from November to January is now less than six cents, versus almost 11 cents last week. Those kind of changes are often seen as bullish, as commercial interests, that is soybean crushers and exporters, are having to pay higher prices to acquire stocks in the short-term, which could indicate even greater strength down the road. And the apparent difficulty in purchasing adequate stocks of beans doesn’t seem to be related to a slow harvest. On Monday, USDA reported that 69 percent of soybeans were already in the bin, which was well ahead of historical averages. On the negative side, slower than expected economic growth in China could limit that nation’s appetite for soybeans and other agricultural products.
Corn prices dipped slightly this past week, responding to a slight increase in ending stocks predicted by last week’s USDA reports. Like soybeans, the corn spreads also tightened, indicating that commercials wanted to buy more corn than was readily available. For the week ended Tuesday, December Corn futures lost a penny, while the March contract was down almost a nickel and May lost nearly seven cents. Corn harvest is also progressing at a faster than average pace, with almost half of the nation’s corn crop in the bin as of Sunday.
Last week’s S & D reports were bearish for wheat and traders took the information to heart. Compared to last Tuesday, Chicago December Wheat futures lost more than 35 cents, with March down nearly 39. In Kansas City, the December contract was down more than 18 cents, with March off more than 19 and May down more than 20 cents. Again, note the narrowing spreads, even as the market moved lower. Planting progress for winter wheat was a mixed bag, primarily as a result of farmer’s reactions to the Southern Plains drought. Texans seemed to be waiting for moisture before putting seed in the ground, while in Kansas farmers “dusted it in” in the hope of adequate moisture to get the crop up and going before winter sets in.
Livestock markets were mixed this past week, with hogs taking the market lead. December Lean Hog futures gained $4.17 for the week ended Tuesday, with the February up $2.50. Tight supplies of hogs and still strong export demand supported the futures markets this week, but that strength did not carry over into the cash market, with Red Oak cash butchers trading Tuesday at $61.50, down a half-dollar compared to last week.
Cash fed cattle were also softer last week, with the bulk of the feedlot trade at $119, down two dollars compared to the previous week. That coincided with soft boxed beef cutout values, as the Choice cutout gained just seven cents for the week and Select was down $3.09. The Choice/Select spread is now almost 19 dollars, unusually wide, especially for this time of year. Live Cattle futures were stronger than the cash trade, with the October contract down 65 cents for the week, while the December was up $1.70 and February gained $2.02. Tight packer margins are keeping nearby prices down, but traders are looking for better prices down the road. Early indications are for this week’s cash feedlot trade to be steady to stronger.
Feeder cattle prices were mostly higher this week, in both the cash and futures markets. The October futures contract finished Tuesday up $1.27 compared to last week, with the November contract up 27 cents and January up $1.95. Cash auction prices were also stronger, with yearlings up as much as five dollars at some auctions and the calf market stronger as well. Tight numbers of calves and yearlings, combined with softer corn prices and higher deferred Live Cattle futures all combined to pull feeder prices higher.
This Friday, USDA releases the Oct. 1 Cattle on Feed report. Once again, placements will likely be the most-watched number. In addition, cash movement of grains, as reflected by the futures price spreads will be important, and of course the “outside markets,” including the stock market, the European debt crisis and Chinese economic growth could completely overshadow the fundamentals of the ag markets at any time.
