Corn
Corn futures are called 30 cents lower. The USDA Grain Stocks report was bearish with corn stocks at 3.67 billion bushels for the third quarter compared to the 3.324 billion bushel trade estimate. Planted Acres were 92.3 an upward revision from the June report of 90.7 and compared to the average trade estimate of 90.767 million acres. This total obviously included flooded acres along the Mississippi and Missouri Rivers and in the Dakotas. South Korean feed-makers bought 220,000 MT of optional origin feed wheat on an overnight tender shifting some of the demand from corn feed. USDA weekly export sales were good this week with old crop sales at 691,729 MT and new crop sales at 242,627 MT, above the average trade estimate. Taiwan also purchased 23,000 MT of corn in today's tender. The firm cash market makes delivery of corn vs. July futures unattractive. Corn was down 4 cents on the Dalian exchange and up 2 to down 3/4 cents on Globex.
Soybeans
Soybean futures are called 20 to 25 cents lower. Prices were neutral overnight in anticipation of today's reports. Soybeans on Globex closed up 1 1/2 to down 3/4. Soybean stocks as of June 1 were .619 billion bushels above the average trade estimate of 592 million bushels. The Acreage Report showed 75.208 million acres planted compared to trade estimates of 76.476 million acres, a bit friendly compared to estimates. Harvested acres are projected at 74.258 million. Weekly export sales were a minus 335,636 MT for the 2010/11 marketing year with much of that transferred to 2011/12 sales of 458,058 MT for the week of June 23rd with the net being below trade. Soybeans on the Dalian exchange were up 3 cents.
Wheat
Wheat futures are called 15 to 20 cents lower. The Quarterly Grain Stocks as of June 1 were .861 compared to the average trade estimate of .826 billion bushels, down from last year's 976. That stocks number will also be the year end carryover figure for wheat in the July WASDE report. Spring wheat and durum wheat acreage were down from the March Intentions. Spring wheat planting was 13.627 million acres and Durum 1.698 million acres. Weekly export sales as of June 23rd were 545,123 MT below trade estimates of 550,000 to 750,000 MT.
Cattle
Cattle futures are called lower on the open. Cash trade has been minimal this week with not enough business to establish a market yet. There were about 750 head sold in NE in the dressed for $174 according to USDA. Bids and offers are still wide apart with bids at $109 and offers at $114. Feeder cattle at the St. Joseph, MO auction sold higher. Last week's auction did not have enough business for a test but compared to two weeks ago, steers and heifers traded $8 to $12 higher in active trading. Choice boxed beef was $0.36 lower at $178.43 and Select boxed beef was $0.09 lower at $173.38 yesterday afternoon. July 4th grocer orders should have been filled and so we will be waiting for cash business to see how driven the packer is. Weekly beef export sales were 15,651 MT and year to date shipments are 366,617 MT.
Hogs
Lean hogs are called 15 to 20 cents lower but with the overall bearishness in the grains that call could change before the open. Cash hogs closed mixed yesterday. IA/MN hogs were up $1.16 at $100.98, WCB hogs were up $0.73 at $100.25 and ECB hogs were down $0.43 at $96.04. The Lean Hog Index was at $102.11, up $1.13 for June 27th above the cash price with 11 trading days left before spot contract expiration. The pork carcass cutout value dropped $0.33 from yesterday with Ribs taking the hit. Ribs were down a very steep $10.04 in one day. Pork trading was slow to moderate with light to moderate demand and mostly moderate offerings. The chicken expansion is slowing as they start to outrun their feed hedge coverage. Egg sets were -6% year/year this week, and broiler placements were down 4%.
Cotton
Cotton futures are trading 400 to 500 points lower. Traders on average were looking for USDA to show 13.26 million cotton acres planted in today's Planted Acreage report and were surprised with the 13.73 million acre USDA number. Texas planted 7,100.0 million acres and Georgia planted 1,450 acres, the same as the March intentions for Georgia and 1,100 million more acres for Texas. Texas wheat and corn acres were planted to cotton due to the worst drought over 50 years in Texas. USDA is has no projections yet as to how many of those acres will be harvested. YTD rainfall is 2 inches or less for nearly half of Texas with above normal heat and below normal rainfall predicted for the next 6 to 10 days.
By Donna Hughes
Lone Star Portfolio Advisors, Inc. was founded by Donna Hughes. Donna began her career in the industry in 1978 after graduating High School as a member of the Chicago Mercantile Exchange’s Inspection and Delivery Department where she was responsible for scheduling and facilitating the USDA grading and delivery for various Exchange Commodities. After 1 ½ years, she was offered a position working with George Segal, a prominent hedger in the Pork Belly market. It was through this relationship that she was mentored and taught the hedging process by working with Mr. Segal as well as other leaders of the Pork Industry. In 2004, Donna moved to Texas where her skills in the industry were utilized to help individual and corporate producers with their Risk Management Goals. Her Daily Market Commentaries are heard on the AllAgNews.com Radio Network broadcasting throughout Texas. She also contributes to magazines and periodicals including PetroEvents and Ag Monthly.
Donna created Lone Star and implemented strategic relationships with Daniels Trading and R.J. O’Brien leveraging their services to enable Lone Star to Build Lasting Relationships Thru Information, Execution and Research.
