Corn
Corn futures are called 6 to 8 cents higher on the open. They were down 44 cents last week and took back a big chunk of the 88 cent rally from mid December after USDA showed larger than expected stocks and Argentina got some needed rain. Weekend rains were not as good as expected in South America prompting overnight buying. Argentine and Brazil rainfall is forecast to be below normal from January 18 to 22 in the major corn production areas. The Rosario futures exchange cut projected production to only 21.4 MMT late last week, expecting little recovery to yield prospects on previously drought damaged corn. Globex prices opened firm on Monday night and ended the night session 8 1/4 cents higher. Weekly export inspections will be out this morning and need to come in at 31.4 million bushels to keep pace with USDA projections.
Soybeans
Soybean futures are expected to start the day double digits higher. South American rains fell below expectations creating buying interest overnight. Argentine grain exchange Rosario left the Argentine soybean production estimate at 49.5 MMT, 1 MMT lower than the USDA. The average published estimate for the NOPA December crush report this morning was 141.4 million bushels. NOPA put the figure at 145.4 million. NOPA Jan 1 soy oil stocks were put at 1.938 billion pounds. Palm oil prices on Monday hit a three week low on concerns about the potential loss of European buying interest. That was reinforced by an 11% drop in Malaysian palm exports for the F/H January although Chinese demand was reported to be good ahead of their upcoming holiday. Egypt is in the market for between 20,000 and 30,000 MT of soyoil and sunflower oil. Weekly export inspections need to come in at 19.8 million bushels to keep pace with USDA projections. The U.S. dollar is sharply lower this morning. Globex prices were 18 1/4 cents higher overnight.
Wheat
Wheat futures are called higher on all three exchanges. The dollar is down hard this morning allowing foreign buyers to take advantage of last weeks reduced wheat prices. Chicago prices were down 22.5 cents last week and off 10 cents for KC wheat. Wheat at the MGEX were up 1/4 cent. Export inspections need to be at the 16.3 million bushel level to stay in line with USDA forecasts. Grain handlers are signing forward contracts with Canadian wheat farmers for 2012/13 delivery after the Canadian Wheat Board changes their business model officially August 1, 2012. The Canadian Wheat Board plans to offer grain pools, cash contracts and marketing advice but will no longer be the monopoly seller for wheat and barley. Globex wheat was 9 1/2 higher for SRW, 7 higher for HRW and 4 3/4 higher for HRS.
Cattle
Live Cattle futures are expected to start the week at higher money. Nearby cattle futures were up $1.80 last week. Feeder cattle were up $3.77 for the week with supplies tight. About 2400 head of cash cattle sold in Nebraska at $198 on Friday with even less reported business in the Southern Plains at $123. This light reported trade has been going on for the past four weeks. For the week ending 1/15/12 cattle sold for $123 on average in the live and $198 in the beef. Boxed beef was still weak coming into this week. Choice beef was down $0.41 and Select boxes were down $0.54 Monday.
Hogs
Lean Hogs are called higher on the open. Cash hogs are also expected to be higher today. U.S. cash hog prices were $0.28 higher in IA/MN, $0.07 higher in the WCB and $1.63 lower in the ECB Monday. The Carcass cutout was up $0.60 on Monday on 45 loads. Weekly slaughter was estimated at 2,212,000 head including the Saturday estimate. That would be about 15,000 head above the same week in 2011. China swine production according the National Bureau of Statistics was 50.53 MMT.
Cotton
Cotton is trading 94 points higher this morning. Nearby March was down only 39 points last week. The dollar lost the ground gained last Friday this morning. World cotton ending stocks were estimated at 57.67 million bales in December but USDA raised them to 58.35 million bales in last week’s report. The national Bureau of Statistics said China’s cotton output for 2011 was up 10.7% from the previous year at 60.6 MMT. China is the world’s largest cotton producer, consumer and importer. The Commerce department reported on Friday that total cotton textile imports in the U.S. for Jan-Nov were down 12.8% vs. the same period in 2010.
There is substantial risk of loss to futures and options trading. Past performance is not indicative of future results.
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.
