Corn
Corn futures are called slightly lower on old crop and 2 lower on new crop this morning. Nearby May was down 27 cents for the week. Analysts have been anticipating U.S. corn acres will be at modern era record levels for the 2012/13 marketing year (highest since the 1940's or late 1930s depending on whose Intentions number you are using). Thus, some of those expectations are likely built into the current market price. U.S. planting intentions will be reported by USDA on Friday morning. USDA withdrew the proposed rule for reporting weekly DDG export sales due to a failure to get OMB approval before putting it in the Federal Register. This will delay the implementation. Chinese futures at Dalian were down 6 cents and were down 1/2 cent on Globex.
Soybeans
Soybean futures are expected to begin the day session 9 to 11 cents higher. May futures were down 8 cents for the week last week. The Argentine truck strike is over with both sides coming to agreeable terms. Brazil soybean harvest is at about 70% completed. The U.S. soy/corn ratio has been moving in favor of soybeans in an effort to encourage producers to allocate more of the acres to soybeans versus corn. The bean/corn ratio for new crop finished the week at 2.37:1, just above the traditional tipping point for acreage shifts. Managed Money added 25,123 contracts to their net long position from the previous week. In fact, they held the largest net long on March 20 that they have had since the switch to the Disaggregated reporting system in June 2006. Chinese futures were up a sharp 25 cents and Globex futures were up 11 3/4 cents on old crop and 9 1/4 cents on new crop.
Wheat
Wheat futures are expected to open mixed on the three exchanges. All three exchanges were lower last week. Corn is still the favored crop for most US producers unless farmers can double crop soybeans behind the wheat. Crop rotation and risk distribution are also taken into consideration. In the southern plains, winter wheat growers have to decide whether to graze out the wheat or if they want to allow the wheat to mature. Demand for 12.2 to 12.8 proteins for HRW and SRW wheat has kept basis premiums firm. U.S. temperatures this past winter were above normal and agronomists believe that could lead to more insect problems for the wheat crop. Globex SRW was up 1/2 cent, HRW was donw 1 1/2 cents and HRS was down 1 1/4 cents.
Cattle
Live Cattle futures are expected to start the week at lower money. Trade estimates averaged 102.3% for March 1 on feed and the USDA came in at 102.6%. Placements were 103%, slightly above the trade average estimate of 102.7% for February. February marketings were at 98% and below trade estimates of 99.5%. So the report was negative to the front months although the market was also technically oversold going into the report. Wholesale beef prices were lower again on Friday. Choice was down $1.51 and Select was down $1.10.
Hogs
Lean Hogs are called 20 to 30 points lower. Prices have been in a basic free fall since the beginning of the month dropping $8 since the high March 2nd to Friday's low. Hogs were down 85 cents for the week. The CME Index is $87.35 for March 21st. The Cold Storage report listed total pork in cold storage at 624.718 million pounds, up 9% from a year ago and up 7% from January. Selling on Friday was pegged to that report. Pork trading was slow to moderate with light to moderate demand and moderate to heavy offerings. The cutout was 15 cents lower on 73.75 loads.
Cotton
Cotton futures are trading 17 points higher after being up 215 points last week. The USDA may increase projected cotton exports in the April report with total export commitments now 109% of year ago. It will take an average of about 235,000 RB per week from now until July 31 to meet the USDA forecast for the year. In 2010 ginnings were 17.58 million 480 pound bales net weight equivalent compared 14.7 million in 2011 so far this year. There were 682 active gins in 2011 compared to 700 in 2010. Certificated stocks as of March 22nd were 94,578 bales. The Cotlook A Index is up .10 at 98.05 cents/pound. The weekly CFTC report showed Managed Money increased their net cotton short position by 1,292 contracts.
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.
