Market Closes - March 19, 2013

Posted on Mar 19, 2013
Corn and wheat futures closed strongly higher lead by the tight old-crop corn supply situation. Penetration of overhead chart resistance around $7.21 may have also encouraged technical buying. The MAY CORN contract now has room to run to $7.44-7.47. Funds have been buying old-crop corn futures, adding to their long position. Wheat futures are tagging along on corn’s coattails, aided by short-covering.

Soybean futures closed weak. Traders sold soybeans against corn and wheat purchases. Talk of significant cancellations by China of previous Brazilian purchases is a negative factor. It’s only a matter of time before a significant volume of soybeans gets loaded on the 50+ day supply of vessels waiting in port. We need to be alert for one more round of Chinese buying of US soybeans to fill immediate needs.

Today’s NWS 2-week forecast shows the eastern U.S. having below to much below temperatures – this won’t encourage early corn planting in the Corn Belt and Ohio Valley. The Southeast will also have above normal rainfall so that could slow fieldwork. Interestingly, Texas and Louisiana are well ahead of normal in planting corn.

The next key USDA reports come March 28 – Quarterly Grain Stocks and Prospective Plantings.

Cattle futures closed lower given declining boxed beef values, a strong US dollar, sliding commodity prices and less confidence that feedlots will get more money than last week’s $127/cwt trade. Corn futures’ recent strength adds to the bearishness in feeder cattle futures. Choice down 1.66 at 194.18; Select down 0.06 at 193.65.

The monthly Cattle on Feed Report comes out Friday afternoon. Traders expect March 1st inventory at 93.5 percent of a year earlier and February placements at 91 percent.

The uncertainty for beef and pork demand as the US dollar strengthens and financial markets move to “risk off” pushed Lean Hog futures to new lows. The April may find support at $76.65 from the weekly chart. The Pork Cutout value dropped 1.14 to $78.44/cwt.

The Cyprus government rejected the proposed bailout deal that would have taken 6-9 percent of bank account balances. Negotiations will resume. This uncertainty has weighed on global markets but strengthened the US dollar and Treasury prices (yields lowered).

Corn May +8.5 728.5; Jly +9 712; Dec unch 562 Bean May -3 1407; Jly -6.5 1388; Nov -3 1255.5 Meal May -2 412; Oct +1 356   Oil -20 4948 Wheat May +9 722; Jly +8 721; Dec +6 738.5KC +8 752 ; MGE +10 799

LC Apr -75 12530; Jun -40 12097; Oct -40 12665 FC Mar -70 13600; Apr -102 13837; Aug -97 14725 LH Apr -117 7822; Jun -67 8827; Oct -85 7945 Milk Apr +12 1750; May +20 1806

Oats unch 396 Rice +18 1472 

US$ +.4% 82.99 Dow +4 14456 SP -4 1548 NAS -8 3229 Tran -12 6240  VIX +1.03 14.39 7.7%

WTI -173 9238 Brent -203 10748 Gas -8.4 304.5 NG +8 396 HO -6.4 286 Eth -2.6 260.5

Gold +7 1612 Slvr steady 2887

2-yr unch 0.24% 5-yr -.03 0.78% 10yr -.05 1.91% 30yr -.06 3.13%

Blue Grass Stockyards                                        Cattle Report for 03/19/2013 Receipts:        763   Last Tuesday:  1,363 Year Ago:      1,750     Compared to Monday, steer calves sold mixed with 400-500 lbs 5.00 higher with active farmer participation and moderate demand, 500-600 lbs 5.00 lower with very light demand in a light test.   Yearling steers sold about steady in a limited comparison with yesterday’s light test.  Heifer calves sold about steady with light demand.  Yearling heifers lightly tested.  Slaughter cows sold 2.00 higher with good demand.  Slaughter bulls lightly tested.

   Total supply included 07% slaughter cows, less than 01% slaughter bulls, less than 01% replacements and 92% feeders.  Feeder supply 68% steers, 12% bulls, 20% heifers with 72% of feeders weighing over 600 lbs. 

February Milk Production down 3.4 Percent (due to Leap Year)    Milk production in the 23 major States during February totaled 14.6 billion pounds, down 3.4 percent from February 2012. However, production was 0.1 percent above last year after adjusting for the leap year. January revised production at 15.9 billion pounds, was up 0.6 percent from January 2012.    Production per cow in the 23 major States averaged 1,722 pounds for February, 58 pounds below February 2012.        The number of milk cows on farms in the 23 major States was 8.50 million head, 13,000 head less than February 2012, but 2,000 head more than January 2013.     (due to sequestration, USDA has suspended this report through September 30, 2013) 

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