12/13/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC
CLOSING GRAIN COMMENTS:
It was “Groundhog Day” all over on Thursday, as grains continued their
recent trend of weaker feed‐grain prices and firm to higher soy prices.
And like Wednesday’s trade, new daily lows were being seen in corn and
wheat as mid‐day weather models continue to show light precip. For the
southern plains. In addition, on Thursday the weekly drought monitor
update showed an even deeper and more entrenched drought for the entire
central portion of the lower United States.
The 1+% lower price‐action in the corn and wheat seen again Thursday
helped take the January Beans nearly 15 cents off its highs, even though
USDA announced weekly bean export sales of 48.5 Mln. Bu.—a marketing year
high. That number supported the idea of needed demand‐rationing by the
futures market and helped push the lead‐month beans up to new weekly
highs early in the trading session.
But with wheat falling below its 200‐day Moving Avg. for the 1st time
since June, the Jan. Beans fell back to only single digit gains as
Thursday’s close approached. However, another strong performance for the
bean spreads was seen on Thursday, with the Jan‐July climbing 8 cents
late in the session.
Very late in the trading day, the Buenos Aires Grains Exchange again
lowered the expected wheat crop down to 9.8 MMT; this compares with
USDA’s brand new, unchanged number of 11.5 from Tuesday’s report. This
helped bring the Chicago wheat back up toward steady on the session as we
finished Thursday’s trade.
CLOSING LIVESTOCK COMMENTS:
Even with cash markets mostly weak, hogs were able to hold onto
Wednesday’s gains to close the Thursday trade out—with some report
suggesting the continued firm bias is coming‐from expectations for
stronger near‐term exports.
But even with this, given that many areas of the country saw weakening
cash hog prices, and also in‐light of late afternoon comments by USDA
suggesting they will not comply with Russia’s demand for testing of US
pork, I think the hog futures may have more of an uphill climb as we
close out the week. As of Thursday’s close, the CME Cash Index was around
$82, in line with Dec. but well under the soon‐to‐be lead‐month February
price of $86 per hundred‐weight.
Cattle prices at the Merc were mixed on Thursday, as the feeders
continued to garner support from fresh 5‐month lows in wheat and another
new weekly low in corn; however, the live cattle remained mostly weaker
as the cash market seems to be weighing given a lack of transactions
heading into the last trading day of the week.
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