3 November 2011

3 minute read

North America

DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed down on Monday. OCT’11DA futures finished at $18.04/cwt; even with Friday’s close.

The JAN’12DA contract closed at $16.79/cwt; off $0.14/cwt.

Spot markets were quiet amid light activity. Cheese futures were lower in the 2012 months. Whey futures were mixed.

The All-milk price declined $1.20/cwt from last month. Current average futures prices for Class III milk are: three months out = $18.00/cwt; six months out = $17.35/cwt; nine months out = $17.10/cwt; and 12 months out = $17.08/cwt.

The below graph put together by Katy Krupa of Rice Dairy reflects current Milk-Feed Margin.

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) finished down on Monday. The OCT’11LC contract closed at $119.800/cwt; down $1.150/cwt. JUNE’12LC futures closed at $124.100/cwt; down $0.400/cwt.

End-of-month positioning and a higher US dollar seen as hurting exports kept prices in check.

A slumping US stock market after Japan curbed its currency appreciation also proved negative. Fundamentals are bullish but market momentum is bearish. Packer margins are still hurting.

Late Friday USDA put choice beef prices at $188.10; up $0.14. According to HedgersEdge.com, the average packer margin was lowered $3.05/head from last report to a negative $62.65/head based on the average buy of $120.85cwt vs. the average breakeven of $116.06/cwt.

FEEDER CATTLE at the CME closed down on Monday. The NOV’11FC contract settled at $140.050/cwt; off $1.050/cwt. APR’12FC futures finished at $146.600/cwt; down $0.750/cwt.

Feeders followed live cattle lower. Feedlot volume was good.

The Oklahoma City National Stockyards estimated receipts at 10,500 hd. vs. 9,478 last Monday and 12,079 hd. a year ago.

Compared to last week feeders were steady with good demand for fleshy calves. The CME feeder cattle index was placed at $140.10; off $0.02 from the previous and $0.92 over this time last week.

CORN futures on the Chicago Board of Trade (CBOT) finished down on Monday. The DEC’11 contract closed at $6.470/bu; off 8.0¢/bu.

MAR’12 futures closed at $6.590/bu; down 8.0¢/bu. The DEC’12 contract closed down 8.5¢/bu at $6.074/bu.

A strengthening US dollar, falling equities, and trading jitters tied to the bankruptcy of global futures giant MF Global weighed on prices. Funds sold 9000 lots.

Exports were bearish with USDA putting corn-inspected-for-export at 27.736 mi bu vs. estimates for 28-33 mi bu. Corn prices still appear weak in the short run (see chart below).

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. NOV’11 soybean futures closed 9.5¢/bu lower at $12.074/bu.

The MAR’12 contract closed at $12.270/bu; off 8.75¢/bu. The same outside forces pulled at soybeans as they did for corn. Volume was light.

Additionally, larger-than-expected deliveries on first notice day were high.

Traders were expected between 200-400 lots. Traders expected continued high export competition from Brazil and built that into price bids.

However, USDA put soybeans-inspected-for-export at 48.518 mi bu vs. estimates for 39-42 mi bu. Good harvest numbers from the US and heavy Brazilian exports will continue to suppress soybean prices.

WHEAT futures in Chicago (CBOT) closed down on Monday. The DEC’11 contract closed at $6.282/bu; off 16.25¢/bu. JULY’12 wheat futures finished at $7.042/bu; down 14.75¢/bu.

A firm dollar and equity trouble in outside markets weighed on wheat prices. Volume was very light.

Rains in Ohio’s wheat belt hindering planting there could prove supportive.

Exports were neutral with USDA putting wheat-inspected-for-export at 20.820 mi bu vs. estimates for 15-21 mi bu. Looks like the short-run upside potential I pointed out two weeks ago has run its course.