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Grain prices surged higher this past week, primarily responding to the oversold conditions noted last week, as well as some improving export prospects. December Corn futures closed Tuesday (Oct. 11) more than 57 cents higher than last week, with March and May contracts up more than 56. Early Wednesday morning, USDA released the October Supply and Demand reports, with overall bearish numbers for corn. The projected ending stocks for next fall were increased almost 200 million bushels compared to last month’s report, as a result of the increased beginning stocks forecast by the recent grain stocks report. Average yields were left unchanged, although harvested acreage was reduced slightly compared to last month’s estimate. The projected ending stocks were also 60 million bushels more than pre-report estimates by analysts. Overall effect on the markets may be minimal, given bullish results for soybeans and the limit higher moves pre-report on Tuesday that seemed to reverse the recent bearish direction of corn prices.
Soybeans were also sharply higher, as the November futures contract rose 72 cents compared to last Tuesday, while the January contract was up more than 72 and March gained 71. Traders expected Chinese demand for beans to increase in coming months, helping drive prices higher. Wednesday morning’s report was bullish for soybeans, as projected ending stocks were reduced five million bushels below last month’s report, but more importantly were 23 million less than pre-report estimates, at just 160 million bushels. Ending stocks that low, if realized, are not much better than zero, given the size of the “pipeline” that supplies soybeans to exporters and crushers.
Wheat values tagged along with corn and soybean prices. In Chicago, the December futures gained nearly 57 cents for the week, while the March contract was up 55. In Kansas City, the December gained more than 43, with March and May more than 44 higher. Projected ending stocks for wheat were increased sharply, while analysts were expecting a decrease. That could be bearish for wheat values if corn and soybean prices don’t overshadow the wheat market.
Cattle prices were mostly higher this week, with Feeder Cattle futures responding to the month-long slide in corn prices. The October Feeder contract lost 42 cents for the week, as adjustments were necessary to bring the basis into line as the contract nears expiration, but the November contract gained $2.22 for the week ended Tuesday, while January was up $1.90 and March gained $2.17. Early-week cash auctions were mostly higher, although the surge in grain prices on Tuesday may reverse that trend if the Supply and Demand reports don’t turn corn prices back down.
Live Cattle futures were also higher this week, as the October was up 35 cents and December gained seven cents. The deferred contracts were more convincingly bullish, with the February up $1.10 and April up $2.47. Last week’s cash fed cattle trade was steady at $121, while boxed beef cutout values were mixed, as the Choice gained $1.25 while Select lost 85 cents. This week’s cash trade is still seeking direction, although improvement in the stock market and an easing of the European debt crisis may provide underlying support.
Hog prices were narrowly mixed this past week. October Lean Hog futures lost $1.27, with the December contract off seven cents, but the February gained 90 cents for the week. Cash butchers in Red Oak were steady with last Tuesday at $62.
Response to the Supply and Demand reports will likely be a major factor in this week’s price direction, for both grains and livestock. The outside markets will also play a role, and with no other major reports before Cattle on Feed on Oct. 21, emotion and volatility will continue to play a huge role in the ag markets.
Grain prices surged higher this past week, primarily responding to the oversold conditions noted last week, as well as some improving export prospects. December Corn futures closed Tuesday (Oct. 11) more than 57 cents higher than last week, with March and May contracts up more than 56. Early Wednesday morning, USDA released the October Supply and Demand reports, with overall bearish numbers for corn. The projected ending stocks for next fall were increased almost 200 million bushels compared to last month’s report, as a result of the increased beginning stocks forecast by the recent grain stocks report. Average yields were left unchanged, although harvested acreage was reduced slightly compared to last month’s estimate. The projected ending stocks were also 60 million bushels more than pre-report estimates by analysts. Overall effect on the markets may be minimal, given bullish results for soybeans and the limit higher moves pre-report on Tuesday that seemed to reverse the recent bearish direction of corn prices.
Soybeans were also sharply higher, as the November futures contract rose 72 cents compared to last Tuesday, while the January contract was up more than 72 and March gained 71. Traders expected Chinese demand for beans to increase in coming months, helping drive prices higher. Wednesday morning’s report was bullish for soybeans, as projected ending stocks were reduced five million bushels below last month’s report, but more importantly were 23 million less than pre-report estimates, at just 160 million bushels. Ending stocks that low, if realized, are not much better than zero, given the size of the “pipeline” that supplies soybeans to exporters and crushers.
Wheat values tagged along with corn and soybean prices. In Chicago, the December futures gained nearly 57 cents for the week, while the March contract was up 55. In Kansas City, the December gained more than 43, with March and May more than 44 higher. Projected ending stocks for wheat were increased sharply, while analysts were expecting a decrease. That could be bearish for wheat values if corn and soybean prices don’t overshadow the wheat market.
Cattle prices were mostly higher this week, with Feeder Cattle futures responding to the month-long slide in corn prices. The October Feeder contract lost 42 cents for the week, as adjustments were necessary to bring the basis into line as the contract nears expiration, but the November contract gained $2.22 for the week ended Tuesday, while January was up $1.90 and March gained $2.17. Early-week cash auctions were mostly higher, although the surge in grain prices on Tuesday may reverse that trend if the Supply and Demand reports don’t turn corn prices back down.
Live Cattle futures were also higher this week, as the October was up 35 cents and December gained seven cents. The deferred contracts were more convincingly bullish, with the February up $1.10 and April up $2.47. Last week’s cash fed cattle trade was steady at $121, while boxed beef cutout values were mixed, as the Choice gained $1.25 while Select lost 85 cents. This week’s cash trade is still seeking direction, although improvement in the stock market and an easing of the European debt crisis may provide underlying support.
Hog prices were narrowly mixed this past week. October Lean Hog futures lost $1.27, with the December contract off seven cents, but the February gained 90 cents for the week. Cash butchers in Red Oak were steady with last Tuesday at $62.
Response to the Supply and Demand reports will likely be a major factor in this week’s price direction, for both grains and livestock. The outside markets will also play a role, and with no other major reports before Cattle on Feed on Oct. 21, emotion and volatility will continue to play a huge role in the ag markets.
