Kleist Comments


Cattle: Cash cattle last week: $146.00 south, $149-149.00 north; on 38 boxed loads cut outs dn. $.18(c) to up. $.92 (s) on light midday movement.
Comments: Sloppy trade with a bunch of indecision it seemed. The large discount confounds the bulls while if bearish simply suggests futures are telling us summer cash cattle could be rather flat and lower than from here. Showlist estimates: Neb. up 9,000hd., Ks. dn. 10,000hd. an Tx. up 8,000hd.
Hogs: Interior hogs East Not/Est., West dn. $2.70-3.20;
Pork cut outs rose $2.83, big jumps in primal.
Comments: The May contract keeps getting hit from the declining lean index. However, once more there is an exodus out of the June into the July and likely the August to ‘buy some time’ in my view due to the recent indecision over just what pork production will look like next month.


Corn: Most of the pressure seemed from ideas that the [planting progress caught up strongly last week. Also, that this week’s wet and cooler forecasts are not 100% coverage. Spillover from sharply lower wheat and beans/meal kept a lid on recoveries.

Soybeans: Strong losses and retracing Friday’s curious bulge. Plantings not the major issue here but plenty of soil moisture conducive when planted. Not much talk about more Brazilian bean imports but there is a re-mention of shipments arriving perhaps all summer.

Wheat: Nice bounce off sharply lower prices most of the session. Part of that largely oversold when today’s action combined with Friday’s. USDA report was bearish GLOBAL supplies and over the weekend some plentiful rains showed up in the southwestern plains.

In other news: 14:12 EDT – Retail sales of farm machinery in the US and Canada hit a rut in April, reflecting farmers’ growing cautiousness about capital investments in the wake of moderating crop prices. Overall tractor sales were flat vs a year ago, but sales of tractors with engines above 100-horsepower dropped 13%, while large, four-wheel-drive tractors sank 12.3%, says the Association of Equipment Manufacturers. Sales of harvesting combines fell 12.7%. Farm equipment stocks are mixed, Deere (DE) off 0.6%, CNH down a fraction. Agco (AGCO) up a touch at $55.38. DE reports F2Q results Wednesday.(robert.tita@wsj.com)

0831 GMT [Dow Jones]– Heartwood Investment Management currently has no direct commodity exposure in its multi-asset class portfolios. The reason, says Jade Fu, investment manager at the firm, lies in the growing finalization of the asset class. “This points to the fact that financial, rather than industry players have become a much more important factor in the price action of almost all commodities.” This also creates greater price volatility and greater correlation with other financial assets, therefore reducing the diversifying characteristics of the asset class.(chiara.albanese@wsj.com @chiaraalbanese)


Kleist Comments

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

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