Kleist Comments

CLOSING AGS 12/3/2014
CLOSING AGS 12/3/2014

Cattle: Cash cattle this week so far: $136-138.00 & $215-216.00 dressed. On 47 boxed loads cut outs up. $1.72(c) to up. $1.32(s) on light midday movement.

Comments: It seemed that as grain futures turned lower funds were back buying here. I know there’s a lot of hype on cattle numbers, and that funds are accumulating long positions as bullish. Enjoy the ride. As mentioned, I cannot just ignore some pressing issues I mentioned previously fundamentally (sans kill numbers). Cannot ignore either new contract highs and technically going along for the ride. For now, I am working with hedgers to be prepared to do more hedging at $136-137.00 ‘just in case’.

By the way, certainly not evident packers are making up for big red margins on beef exports either.

Hogs: Interior hogs early lower at (e) off $.56, (w) dn. $2.56; Pork cut outs fell $.47, quiet trade.

Comments: Interior prices turned around rather quickly this morning but next week likely the real test of the seasonal. The question looking at the charts is ‘a bottom or a bounce’ from yesterday? Cattle confirmed a bottom (for now), hogs have not yet.

GRAINS & OILSEEDS:

Corn: New contract lows. It seemed they were made just after Informa reportedly said corn production at 14.2bln.bu. (up 173mln. from last USDA) with a yield of 161.1bu./acre (up 1.2bu.). Weekly export sales also didn’t help though it confirmed (more) China cancellation rumors. Added to that, the reason I emailed the two Chicago Tribune business headlines over GMO is that its now in the ‘public’ realm. By the way, January 28th is the end of the EPA’s comment period over the RFS; as an aside, Bunge sold its shares of an ethanol producer and two others said today up for sale.

Good news? Late rally saw a mini-reversal on the charts.

Soybeans: Oversold seemed the main reason beans held relatively well early, but fell again later. Late session rally on light volume and off the corn and wheat recoveries. Informa’s take on the USDA report next week: crop of 3.33bln.bu. (up 71mln.) and yields at 44bu./acre (up 1bu.) but that seemed already discounted on yesterday’s break. Early harvesting in northern Brazil also a feature and both helped offset some of the decent weekly export sales report.

Wheat: Prices fell early touching just above yesterday’s contract lows, and a strong upward correction afterwards. Periodically wheat has had bounces off its many contract lows and also, not sure inter-market spread unwinding also at work. Just MAYBE under $6.00 will help after today’s poor weekly export sales report.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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