Kleist Comments

CLOSING AGS 5/10/13
CLOSING AGS 5/10/13

CLOSING AGS 5/10/13

LIVESTOCK

Cattle: Cash cattle this week $126.00; dressed Neb. $204.00; boxed beef modestly higher on light midday volume; futures choppy and narrowed ranged as the grain pits took most of the traders focus. The USDA reports for livestock had not much immediate value but said going into 2014 pork, poultry and beef production will expand due to lower feed costs. And exports to dip in May vs. April. Otherwise, cash cattle anywhere from $2-5.00 lower depending on location and dressed trade.

Hogs: Interior hogs early not well established; pork? Higher midday cut outs; futures, like the cattle pit, saw a choppy, thin trade amid light volume and no interior pricing really. USDA also lowered pork exports for May vs. April.

 

GRAINS & OILSEEDS:

Corn: Old crop carryover 759mln.bu. up 2mln., in usage ethanol was posted up 50mln. while exports were pegged down 50mln….not exactly running out of corn; new crop carry 2.004bln.bu. on a 14.14blnbu. crop with planted acres 97.3mlln. and a 158/bu. yld. World carryover 125.4mln .m/t’s, little lower vs. April; new crop154.6mln.m/t’s.

Comments: one can argue the planted acres too high with the planting delays but it is still early in the game. But that’s really all the bulls have going for them…planting delays. That’s OK, but the crop potential looms large and a wake up call perhaps on the USDA’s avg. farm price: $4.30-5.10. Do not put ones hedges away just yet. Long way to go before the crops in the bins, but if plantings catch up in a week or two prices need a new leg down.

Soybeans: A tale of two cities: I mentioned before the last two reports DID NOT increase demand and lower carryover as the trade looked for; this time the same as crush and exports left unchanged. Why then May beans rallied back higher on the day? I say: still that shorts are squeezed as deliverable supplies in tight hands, and by default July getting some of the same support. For new crop, carryover at 265mln.bu., 25mln. over estimates on a 12% increase in the crop to 3.390bln.bu.; avg. price $9.50-11.50. World carry old crop about unchanged at 62.5mln.m/t’s, new crop 75.0 mln.

Comments: Old crop in a different planet; new crop I give it this: it’s too early in the plantings (and too early to assume less corn, more beans) to put November beans much under $12.00-11.75.

Wheat: All-Wheat production est. 2.057bln.bu., in line with estimates and off 222mn.bu. on year (HRW reductions mostly); carryover (new crop) 670mln.bu., well above trade estimates; even with a lower crop, feed use was lowered 70mlnbu. vs.old crop (due to corn) and exports lowered 100mln. bu.; world carryover old off 1.3mln.m’ts at 180.2mln with new crop at 186.4mln.m/t’s.

Comments: Considering the upcoming prospects for Indians crop, for the European crop, for the Black Sea crop etc., It still suggests front wheat prices do not deserve to be over $7.00; exception would be if corn prices were too take off to the upside.

 

This is an overview and maintains my overall bearish viewpoint for each; hence then we deal with the day-to-day analysis inside that framework. Things change? Of course. I’ll try to be on top of it.

Kleist Comments

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

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