Corn
Corn futures are called mostly 2 to 5 cents lower with old crop the possible exception. May corn was up 9 cents last week while December corn was down 14 1/2 cents. That pattern continued overnight. The weekly CFTC report showed Managed Money had increased their net corn long by 9,249 contracts to 112,328 from the previous week. Analysts on average are projecting even tighter old crop corn stocks in the Thursday USDA report with average guesses at 761 million bushels. Analysts are also projecting a record corn crop for 2012/13 with average estimates at 14.395 billion bushels. China's Ministry of Commerce is asking DDG importers to report shipments so the country can better monitor imports of ag commodities. Chinese corn futures were fractionally higher on Monday at Dalian. Globex futures were 7 1/2 lower to 3 1/4 higher overnight, with May continuing strong due to a strong basis.
Soybeans
Soybeans are called 5 to 10 cents weaker this morning based on overnight action. Soybeans were down 22 cents for the week on old crop and up 4 3/4 cents last week in November beans. The CFTC weekly disag report showed Managed Money had added 10,500 contracts to their net long position bringing it to 253,889 contracts from the previous week. USDA reported sales of more than 100,000 MT under the daily reporting system every day last week. This Thursday the USDA will release their latest estimates for 2011/12 carryout and 2012/13 production. Analysts on average are expecting the 2011/12 soybean ending stocks will come in at 215 million bushels and look for 2012/13 soybean production to be 3.214 billion bushels on average. An early wheat harvest could produce more double crop soybeans this year, but double crop beans also tend to lower the national average yield. Chinese futures were 11 cents lower on the Dalian exchange today. Globex futures were 6 1/4 to 11 1/4 lower overnight.
Wheat
Wheat futures are expected to start the day steady to 2 cents lower. SRW wheat was down 39 cents last week, HRW down 33 cents and HRS wheat down 34 cents. The weekly CFTC report showed Managed Money had decreased their net short in CBT SRW wheat by 17,089 contracts, leaving them with a net short of 25,027 contracts through last Tuesday. The USDA will release their first winter wheat and all wheat production estimates of the season on Thursday morning. Analyst's average production estimates for all wheat are 2.196 billion bushels. The 2011 USDA figure was 1.999 billion bushels. The trade average guess for winter wheat production is 1.658 billion bushels. Globex futures were down 3/4 to 2 cents in the 2012 contracts.
Cattle
Live Cattle are called steady to 25 cents higher this morning. Nearby futures were up $2.53 last week. Beef demand has been good in the export market with shipments YTD running ahead of the past 10 years for this time of year. Accumulated shipments were at 260,882 MT as of the last week of April. Cash cattle trade on Friday saw KS and TX at $120, a dollar higher than last week and NE at $120 to $122, basically steady with last week. Those sales are nearly $5 over the board price for June. Wholesale beef was lower Friday. Choice was down $0.67 and Select was down $0.79. Week to date estimated slaughter was 623,000 head versus 659,000 head last year. Beef production was week was down 2.8% from the same week in 2011, and YTD production is estimated to be 3.3% smaller.
Hogs
Lean Hog futures are expected to start the day steady to 20 lower due to weakness in the cash hogs. Nearby May was friendless and lost $5.70 for the week last week. May Lean Hogs expire May 14th with the June contract about $4.00 higher than the May. The weekly CFTC report showed Managed Money increased their net Lean Hog shorts to 5,442 contracts in the week ending May 1. The CME Index was $81.70 as of May 2nd and is estimated at $80.92 for today. Cash hogs in IA/MN were down $0.29, down $0.28 in the WCB and down $0.70 in the ECB on Friday. Pork trading was slow Friday with light demand and light to moderate offerings on 42.5 loads. The Carcass Cutout was higher at 78.88.
Cotton
Cotton futures are trading 5 to 45 lower this morning, with May the weakest. May lost 316 points last week. Cotton prices are nearing the December 2011 lows with the nearby May contract expiring Tuesday. There were no delivery notices vs. May over the weekend. The total since the beginning of the process has been only 89 contracts. July Cotton is about 200 points over the May. The weekly CFTC report showed Managed Money had increased their net short position in Cotton in the week ending May 1. Cotton Certificated stocks were at 139,182 bales with 4,612 bales awaiting review. A Memphis based firm is projecting US cotton plantings in 2012 will be only 12.83 million acres, down 12.9% from last year.
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.
