Hog
margins improved further through the last half of January due to continued strength in hog prices as feed costs held relatively steady over the past 2 weeks. Hog profitability remains off the charts, literally, with Q2 margins in particular posting new all-time highs for our data series. Both Q2 and Q3 are essentially at the 100th percentile of the previous 10 years while Q4 likewise remains very strong from a historical perspective at the 94th percentile. A recent feature has been sharp depreciation in emerging market currencies relative to the U.S. dollar. There is concern that the stronger dollar will begin to impact import/export flows, with negative implications for U.S. meat exports while Argentina and Brazil become more competitive exporters of grain and oilseeds relative to the U.S. Deferred hog futures prices moved to … Get the Complete Report »

Dairy
Dairy margins continued to strengthen in the last half of January, led by an ongoing surge in nearby milk prices. Q1 represents a new all-time high for profitability in that period, while Q2 margins have not been this strong since 2004. Deferred margins in the second half of 2014 are comparatively not as strong, but remain above or near the 90th percentile of the past 10 years. The strength in milk futures continues to be paced by record high cheese prices, with spot block cheddar at the CME and results from the latest Global Dairy Trade auction for cheddar each posting all-time highs at $2.295/lb. and $2.33/lb, respectively. One potential headwind moving forward though is that U.S. prices have now caught up to world values for cheese powder and butter, and our exports may start looking … Get the Complete Report »

Beef
Beef margins were mixed since the middle of January, improving in nearby marketing periods where input costs are increasingly fixed while deferred periods reflected deterioration from rising feeder cattle prices and steady to higher corn costs. Finishing margins remain negative from the June marketing period forward, with feedlots needing to be very selective about particular margin opportunities on various classes of animals. Cattle prices moved to new highs in the second half of January before retreating over the past week. The latest USDA Cold Storage report showed total beef inventories on December 31 at 438.1 million pounds, down 2.8% from November and 5.9% lower than a year ago. The sharp reduction of beef supplies in cold storage definitely helps to explain a lot of the recent strength in prices. Meanwhile, the monthly Cattle on Feed report reflected on feed supplies at … Get the Complete Report »

Corn
Nearby corn margins were slightly higher since the middle of January while deferred corn margins were marginally lower. New information during the period has been limited as cash movement has been slow. Export sales have remained strong with exporters having committed 86% of the USDA sales forecast with seven months remaining in the crop year. Ethanol production has also kept pace with the current USDA estimate. Private forecasters have begun estimating potential seedings for the coming crop year and are expecting roughly 2 million acres less to be seeded this year due to already-depressed new crop prices. On the global front, South American weather remains … Get the Complete Report »

Soybean
Soybean margins have deteriorated slightly over the last two weeks of January as both price and basis values have fallen. NOPA recently released its member crush figures for December reporting a record crush for the month at 165.3 million bushels. Soybean meal demand remains stout both domestically as well as through the export market which has continued to support the crush pace. Exporters have currently committed 70% of the USDA forecast for sale with eight months remaining in the crop year. There has been talk in the cash market of potential Chinese cancellations of previously purchased soybeans which has proven to cap recent price recovery efforts. Further, recent sales have been made with optional origin attached which gives the buyer the right to choose where to source the product. On the surface these developments would be … Get the Complete Report »

Wheat
Wheat margins have continued to fall and have put in new lows for the year. Harsh winter weather has done little to boost prices as fears of winter kill have eased for now. Damages will only be measurable after the crop exits dormancy this spring. While U.S. wheat stocks are expected to be tighter than last year, demand prospects face headwinds. Wheat prices relative to corn still remain unattractive for the most part to switch into livestock rations. Further, exporters are facing competition from nearly every country around the globe. Record exports continue to be reported out of the Black Sea region as sales are currently up 24% from last year. The region has even more to sell the world as supplies remain ample. A record crop from India is also expected which will add pricing pressure to the region. All told, U.S. wheat remains … Get the Complete Report »

Hog
margins continued to strengthen starting off the New Year, with all of 2014 now well above the 90th percentile of the past 10 years. In fact, Q2 has recently made a new 20-year high and when you look at all four quarters together as an average, the projected margin is the strongest it has been since 2004. This is an extremely rare opportunity currently facing hog producers to lock in excellent returns for the entire year. The margin strength continues to be driven by concerns over reduced pig flow and pork supply through the first half of the year due to PEDv, while feed costs are largely expected to remain in check. While these two factors should continue to influence near-term margin direction, producers should not get complacent as potential headwinds loom. It was recently announced that a vaccine … Get the Complete Report »

Dairy
margins started off 2014 where they ended 2013 by strengthening further through the first half of January. Soaring milk prices are responsible for all of the margin improvement since the end of last year as feed costs have been steady to higher in the past couple weeks. Nearby milk values in particular have strengthened significantly, with the February Class III contract up $2.50/cwt. in just the past two weeks. The market has largely responded to the spot cheddar market where blocks and barrels have rallied 20 and 30 cents, respectively, since the beginning of the year to the strongest level for January since 2008. Meanwhile, export data for dairy products continues to … Get the Complete Report »

Beef
margins improved considerably since the beginning of the year, particularly against the nearby February and April fat marketing periods. The margin improvement was due mostly to surging live cattle prices as feed costs held relatively steady over the past two weeks. Deferred margins improved as well but remain negative from the June marketing period forward, as live cattle prices rose more than feeder values since the end of December. While supply issues certainly continue to support the cattle complex, beef demand also appears to be quite strong and seems to be a supporting factor as well. Based upon weekly data, December steer and heifer slaughter was down 2% from 2012; however, using USDA’s daily estimates, last week’s total of 451,000 head would actually be … Get the Complete Report »

Corn
Nearby corn margins improved over the first half of January while deferred 2014 margins were relatively flat. Corn quarterly stocks reported by NASS came in at 10.426 billion bushels, well below the pre-report estimate as well as outside the low end of pre-report estimates. The much lower stocks on hand figure suggests better feeding in livestock rations during the first quarter. NASS finalized the 2013 production figures, lowering production by 64 million bushels to 13.925 billion bushels which remains record-large. National yields were reduced 1.6 bushels per acre while harvested area was increased 500,000 acres. The additional harvested area likely represented … Get the Complete Report »

Soybean
Nearby soybean margins improved over the first two weeks of January while deferred 2014 margins lost ground. Soybean quarterly stocks reported by NASS came in at 2.148 billion bushels, below the pre-report estimate but within the range of estimates. NASS finalized the 2013 production figures, raising production 31 million bushels to 3.289 million bushels, the third largest crop on record. The increased supply resulted from increased yields and higher harvested area. National yields were increased 0.3 bushels per acre while harvested area was increased 200,000 acres. The USDA updated its ending stocks estimate for the 2013/14 crop year, leaving ending stocks unchanged from the December forecast at 150 million bushels. The increased supplies revealed in the Annual Production report are expected to be consumed through exports and crush. Exports were … Get the Complete Report »

Wheat
Wheat margins have continued to fall to start the New Year as supply concerns have been easing. Wheat quarterly stocks as reported by NASS came in at 1.463 billion bushels, above the pre-report estimate but within the range of estimates. The larger stocks on hand are being attributed to lower feed and residual usage over the first half of the crop year from June-November. The Winter Wheat Seedings report showed fewer winter wheat acres year-over-year at 41.892 million acres planted, roughly 1.7 million acres less than expected. The largest deviation from estimate came in Soft Red Winter wheat acreage as NASS reported 8.4 million acres planted compared to pre-report estimates of 9.7 million acres. The USDA updated its ending stock forecast for the 2013/14 crop year, raising the … Get the Complete Report »

Hog
margins were flat to higher over the second half of December to finish off the year, with feed prices and hogs mixed across the various marketing periods in 2014. Overall from a bigger picture perspective, hog production margins remain extremely favorable heading into the New Year, resting at or well above the 90th percentile of the previous 10 years. USDA released their quarterly Hog and Pig report last week which revealed a breeding herd of 5.757 million head as of December 1st, down 1.3% from a year ago when on average analysts were expecting a 1% increase from 2012. In addition, the growth in pigs per litter declined sharply during the Sep-Nov quarter with USDA reporting 10.16 pigs saved per litter during the period – virtually unchanged from a year ago and the lowest growth rate in litter size since 2003. Both figures seem to validate the impact from PEDv on productivity and the premium that has been built into the forward futures curve. On the feed side of the equation, the corn market has … Get the Complete Report »

Dairy
margins continued to improve over the second half of December to finish off the year on a strong note. Margins remain well above the 90th percentile of the previous 10 years through the first half of 2014, and above the 80th percentile in the second half of the year providing dairy producers great opportunities to protect profitability at historically strong levels. With feed costs relatively unchanged over the past two weeks, margins have improved primarily due to higher milk prices. Milk continues to draw support from strength in the export market as indicated by the recent USDA Cold Storage report. Butter stocks in particular had the highest monthly drawdown in 20 years, with November butter stocks of 121.4 million pounds … Get the Complete Report »

Beef
margins improved over the second half of December to finish off 2013 with higher cattle prices balanced against steady feed costs. According to YEAH! Local SEO company, the margins will remain favorable against the nearby winter and spring marketing periods, but continue to be negative from summer 2014 marketing periods forward. Cattle prices have been supported by the recent USDA Cattle on Feed report that reflected much lower placements than had been expected by analysts. Total December 1st Cattle on Feed was reported at 10.725 million head which was down 5.5% from last year and 0.9% lower than analysts had expected. More surprising however were November placements of only 1.882 million head which were down 3.1% from last year and 4% lower than market expectations. It would appear as though … Get the Complete Report »

Corn
Both nearby corn margins as well as deferred 2014 margins were flat through the last half of December as recent recovery efforts have failed. News during the period has been limited leaving the marketplace to focus on weekly demand from exports and ethanol as well as South American weather. Domestic demand continues to advance nicely for ethanol despite a potential reduction in EIA mandated levels. Currently, corn used to produce ethanol is up approximately 9.7% over last year, better than the USDA forecast for a 6.5% usage increase year-over-year. However, recent Chinese cancellations of DDG shipments from the U.S. has the marketplace on edge as ethanol margins are currently positive through March and are flat thereafter. Increased domestic supplies of DDGs would eventually pressure ethanol production margins provided the livestock industry does not replace … Get the Complete Report »

Soybean
Although still positive, soybean margins have declined significantly over the last half of December as the prospect of decreased demand has arisen. Presently, U.S. exporters have committed 1.467 billion bushels or 99.5% of the USDA forecast for sale and have shipped out 55% of the USDA forecast, well ahead of the average pace for this time in the crop year. At first glance, the figures are quite friendly and would bode well for potential adjustments upward to future USDA demand projections. The marketplace, however, is contending with the fact that much of the forward sales have been issued as ‘Optional Origin’. In other words, the foreign buyer has the option to source the supplies from different locations, not just from the U.S. This is nothing new in the export world, but has ramifications for domestic farmers as current prices are justified due to … Get the Complete Report »

Wheat
margins have continued the slow erosion that began in the middle of October and finished 2013 at the lowest level for the year. Domestically, the winter wheat crop in dormancy has no threatening weather in current forecasts. The winter crop entered dormancy in much better condition than the last few years, but the critical period is early spring where moisture is crucial. Export sales have been limited and are expected to remain slow throughout January. Export sales have been slowing since October when China and Brazil were on a buying frenzy which has since cooled off as competition on the global market is stiff as many countries are set to produce record crops. On the global front, Russia recently updated its forecasted production to be 52.1 million metric tons, roughly 500,000 metric tons above the current USDA forecast. The government went on to say final … Get the Complete Report »

Hog
Hog finishing margins were mixed since the end of November, weakening in nearby Q1 while holding relatively steady in both Q2 and Q3. Now that we are in the month of December, we dropped tracking the current Q4 and started monitoring the fourth quarter of 2014 which is just off the 90th percentile of the previous 10 years. The other 3 quarters of next year remain well above the 95th percentile and continue to offer outstanding opportunities for hog producers to protect margins and secure profitability in 2014. Most of the weakness in nearby margins over the past couple weeks has resulted from a setback in the hog market. Despite the impact from … Get the Complete Report »

Dairy
Dairy margins strengthened significantly since the end of November due to a sharp rally in milk prices over the past couple weeks. Now that we are in the month of December, we stopped tracking the current Q4 period and added the fourth quarter of 2014 which is just over the 80th percentile of the previous 10 years. Both Class III and Class IV milk futures have surged recently in response to strong prices for both cheese and non-fat dry milk powder. Spot NDM prices on the CME are trading at their highest level since October 2007 while CME block cheddar prices on the spot market have been flirting over $1.90/lb. which is unusual for December and represents price strength that similarly has not been witnessed since 2007. It appears that dairy product markets remain … Get the Complete Report »

Beef
Beef margins deteriorated since the end of November, as live cattle prices declined while feeder cattle prices increased and corn held relatively steady. Although nearby placements continue to reflect positive margin opportunities through the marketing period against April live cattle, deferred margins remain negative beyond that. Nearby fat cattle prices have been under pressure due to an increase in slaughter weights which has led to higher beef production. The average dressed cattle weight for the week ending December 14 was 807 pounds, up 0.9% from last year as weights continue trending higher despite the removal of Zilmax earlier this fall. Part of the reason for the increased weights also stems from the fact that there are fewer cows in the slaughter mix as more heifers have been retained for increased dairy production. Competition for feeders meanwhile has helped to … Get the Complete Report »

Corn
Corn margins have been flat since the beginning of December as prices have given up early-month appreciation. The USDA updated its projection for ending stocks to be 95 million bushels lower than November’s expectation at 1.792 billion bushels. The reduction came as a result of increased demand from exports as well as corn for ethanol. Lower supplies due to increased demand tend to be positive for prices; however, the market continues to contend with large ending stocks domestically as well as prospects for larger global production. The USDA also updated its forecast for global stocks, reducing the … Get the Complete Report »

Soybean
Soybean margins have risen only slightly since the beginning of December. The USDA recently updated its expectation for domestic ending stocks to be 20 million bushels lower than November’s estimate to 150 million bushels. Increases in demand particularly for exports and domestic crush were the reason for the increase. Currently, exporters have sold nearly 97% of the USDA’s updated forecast with 8 full months remaining in the crop year. Global demand for soybean meal continues unabated as well forcing the crush rate higher. On the global balance sheet, the USDA made few changes, but did increase its forecast for Argentine production 1 million metric tons to 54.5 MMT due to … Get the Complete Report »

Wheat
Wheat margins have lost ground since the beginning of December as global supplies have exceeded expectations. The USDA recently updated its expectation for domestic ending stocks and increased the estimate 10 million bushels to 575 million bushels. The increase resulted from larger expected imports from Canada. While the current ending stock estimate remains below last year’s figures, the marketplace sees competition for exports and usage for feed as headwinds. Wheat is currently priced out of most Midwest livestock rations but does still pencil in other regions. On the global front, the USDA … Get the Complete Report »

Hog
With the exception of spot Q4 which is quickly winding down, margins improved slightly since the middle of the month, due mainly to increasing hog prices while steady to lower corn and higher soybean meal provided little benefit from feed costs. Continued concern about how the ongoing PEDv outbreak will impact U.S. swine herds and pork output into 2014 has supported the deferred hog market with ideas that it may take up to a year from now for most systems to develop immunity through exposure to the disease. Meanwhile, larger hog runs at heavier weights the past few weeks have put pressure on the cutout and nearby futures in kind. At the same time, crop producers have held tight to newly harvested corn supplies due to the decline in prices which is supporting record … Get the Complete Report »

Dairy
Dairy margins strengthened since the middle of the month due primarily to higher milk prices with feed costs holding steady. Forward dairy margins remain historically strong through the first half of 2014, above the 90th percentile of the previous 10 years, while margins in the second half of the year although not as strong are still above the 80th percentile of the past decade. Milk prices continue drawing support from the strength in powder and butter, with recent Cold Storage data showing a sharp 25.5% drawdown in butter stocks during the month of October. The reduction represented the largest monthly … Get the Complete Report »

Beef
Beef margins improved slightly since the middle of the month, with movements in feeder and fat cattle contracts largely offsetting while corn was steady to slightly weaker. As has been the case for some time, margins remain negative beyond the spring marketing period, although opportunities continue to exist on fall and winter placements for cattle to be marketed in the spring against the April contract. Feed costs continue to stabilize as corn producers have been tight-fisted with newly harvested supplies. With ample on-farm storage space and depressed price levels, many farmers have been discouraged from selling any grain beyond what had previously been contracted for delivery. This has supported basis at record levels for this time of year in some areas. While recent news of the EPA’s proposal for … Get the Complete Report »

Corn
Corn margins are again slightly lower since the middle of November as fresh news is generally absent. Demand has been the feature as depressed prices have allowed end users to extend coverage. Corn use for ethanol continues to rise relative to last year as ethanol production margins have soared of late. With record low ethanol stocks and depressed corn prices, the trend of greater ethanol production remains on firm ground for the time being despite a potential reduction of EPA standards for renewable fuels. Usage of corn for ethanol is up 9% year-over-year versus the USDA expectation of a 5.4% increase by the end of the crop year. Livestock operators, too, continue to show significant … Get the Complete Report »

Soybean
Nearby soybean margins have continued to increase since the middle of November while deferred soybean margins have been flat-to-lower. The soybean market continues to be a tale of two crop years, as nearby needs remain quite strong while the potential for record new-crop supplies next year has capped deferred prices. Export sales have been the main feature, as exporters have committed 1.355 billion bushels for future delivery representing 93% of the USDA expectation. The elevated sales pace could warrant upward revisions to the USDA export forecast in coming months. Soybean meal export sales have also been quite strong. Forward sales for soybean meal currently … Get the Complete Report »

Wheat
Wheat margins have been flat since the middle of November as futures’ prices have gained while basis values have weakened. The pace of export sales has cooled a bit from October but remains on track to meet the USDA’s expectation. On paper, soft red wheat out of the Gulf is the cheapest supply on the global market which should lead to increased sales in the coming weeks. Temperatures have dropped sharply over the past two weeks creating a real threat to winter wheat as deep freezes could damage any uncovered crops. Snow cover is needed as the crop enters dormancy. U.S. crop conditions are quite … Get the Complete Report »

Hog
Margins eased since the end of October, following weakness in hog prices and some strength in soybean meal while corn was steady to lower through the first half of the month. From a historical perspective, hog finishing margins remain extraordinarily strong just shy of the 100th percentile of the previous 10 years. The market still appears to be grappling with questions concerning hog supply given the PEDv outbreak and its potential impact on marketings heading into 2014. While hog slaughter continues to run behind the year-ago pace, it has been noted that the pace of marketing surged last year in response to soaring feed costs as some smaller producers liquidated herds. Meanwhile, weights continue increasing due to cheaper and more plentiful … Get the Complete Report »

Dairy
Dairy margins advanced further over the second half of October, particularly in nearby periods as milk prices strengthened while feed costs declined. Margins are around the 90th percentile of the past 10 years in spot Q4 as well as the first quarter of 2014, while deferred margins are just over the 80th percentile in Q2 and Q3. Milk prices are obviously responding to strong demand signals, with August export figures reflecting significant year-over-year growth. Nonfat dry milk exports totaled 50,542 metric tons, up 19% from August 2012, while U.S. cheese exports hit a monthly record of 28,133 metric tons which was up 40% from last year. At the same time, the monthly Cold Storage report showed a sharp … Get the Complete Report »

Beef
Beef margins were mixed over the last half of October, steady to higher in nearby marketing periods, weaker in the April marketing period, and stronger in summer marketing periods where negative profitability is still indicated for cattle placed on feed during winter months. The focus continues to be on the nearby autumn placement period, where profitability can still be secured above the 90th percentile of the previous 10 years against fat cattle to be marketed against April futures. The past two weeks were marked by steady to declining cattle prices while corn was likewise weaker. With the government now open again, the market is anticipating the release of the … Get the Complete Report »

Corn
Corn margins have weakened slightly since the beginning of November as the marketplace continues to price in a record crop. The USDA is back and recently reported corn ending stocks to be 32 million bushels higher than the August estimate at 1.887 billion bushels. The increased stocks forecast resulted from an expectation of a larger crop that would be offset by increased demand. Total production was increased 146 million bushels to a record 13.989 billion bushels as national yields were increased 5.1 bushels per acre to 160.4 bpa and harvested area reduced 1.9 million acres to 87.2 million. With 84% of the domestic crop harvested, significant changes to the supply side will not be expected as the USDA finalizes 2013/14 production figures in January. On the demand side, the export shipment forecast was … Get the Complete Report »

Soybean
Nearby soybean margins have gained ground since the beginning of November while deferred soybean margins have been flat-to-lower. The USDA recently updated its forecasts for the 2013/14 crop year, increasing expected ending stocks by 20 million bushels to 170 million bushels. The increase in expected supplies came mainly as a result of better-than-expected production results and larger beginning stocks. National yields are forecast to be 43 bushels per acre, up 1.8 bpa from the August estimate, with harvested area down 700,000 acres to 75.7 million acres. All told, production is forecast to be 109 million bushels higher at 3.258 billion bushels. With 91% of the domestic crop harvested, the marketplace will begin to … Get the Complete Report »

Wheat
Wheat margins have set back further since the beginning of November as domestic harvest rolled on. The USDA recently updated supply and demand figures showing an increase in supplies due to better yields and increased imports. Production is estimated 16 million bushels higher to 2.13 billion bushels as national yields have come in better than expected. The winter wheat crop is currently rated at 65% in good-to-excellent condition as the crop enters dormancy, one of the best ratings in some time. On the demand side, feed and residual is expected to be up 30 million bushels with food use lowered 8 million bushels. All told, ending stocks are expected to be … Get the Complete Report » Read additional info at https://www.purenootropics.net.

Hog
Margins soared over the second half of October, particularly in deferred periods where summer hogs picked up significant strength. Profitability was also boosted by a continued weakening in feed costs, with both corn and soybean meal retreating over the past two weeks. Profit margins for hog finishers are now at 10-year highs, resting at the strongest levels since 2004 and offering tremendous opportunities for producers to secure favorable returns throughout 2014. USDA returned to work following the passage of a continuing resolution to extend the budget and debt limit impasse into early next year. Hog slaughter data continues to show totals well below … Get the Complete Report »

Dairy
Dairy margins advanced further over the second half of October, particularly in nearby periods as milk prices strengthened while feed costs declined. Margins are around the 90th percentile of the past 10 years in spot Q4 as well as the first quarter of 2014, while deferred margins are just over the 80th percentile in Q2 and Q3. Milk prices are obviously responding to strong demand signals, with August export figures reflecting significant year-over-year growth. Nonfat dry milk exports totaled 50,542 metric tons, up 19% from August 2012, while U.S. cheese exports hit a monthly record of 28,133 metric tons which was up 40% from last year. At the same time, the monthly Cold Storage report showed a sharp … Get the Complete Report »

Beef
Beef margins were mixed over the last half of October, steady to higher in nearby marketing periods, weaker in the April marketing period, and stronger in summer marketing periods where negative profitability is still indicated for cattle placed on feed during winter months. The focus continues to be on the nearby autumn placement period, where profitability can still be secured above the 90th percentile of the previous 10 years against fat cattle to be marketed against April futures. The past two weeks were marked by steady to declining cattle prices while corn was likewise weaker. With the government now open again, the market is anticipating the release of the … Get the Complete Report »

Corn
Corn margins have moved lower, continuing the perpetual slide that began at the end of June. The U.S. government is back online and back to reporting key data points for market participants. NASS recently reported domestic harvest progress at 59% complete, slightly below the 5-year average of 62% for this time of year. As farmers continue to harvest, new crop will likely find its way to the grain bin given the carrying charge built into forward prices. On the domestic demand side, FAS recently updated export sales data showing cumulative forward sales at 802 million bushels which represents 65% of the USDA export shipment expectation. The sales pace is … Get the Complete Report »

Soybean
Soybean margins have weakened slightly since the middle of October as domestic harvest progress advances. NASS is back from furlough and recently reported harvest progress at 77% complete, on par with the 5-year average for this time of year. Reports from the fields have stated better-than-expected yields. Given the inverted profile of forward prices, the cash market is currently rewarding producers who sell immediately out of the field rather than store the oilseed as the market will pay more today than it will in deferred periods. On the demand front, FAS recently updated export sales data which revealed strong demand bringing cumulative sales to 1.184 billion bushels representing 86% of the USDA shipment expectation. The current pace of sales is … Get the Complete Report »

Wheat
Wheat margins have set back since the middle of October as crop conditions have improved. NASS recently reported crop conditions for all winter wheat at 61% in good-to-excellent condition, near the highest level of the past decade and best since 2010. Export demand has been quite strong with exporters already committing to 753 million bushels for sale which represents 68% of the USDA shipment forecast compared to 57% on average for this period of the marketing year. On the global side, timely rains have fallen across Argentina which has helped to stabilize the deteriorating crop. Most private forecasters expect production to come in … Get the Complete Report »

Hog
Margins maintained their strength and advanced further through the first half of October following the same combination of higher hog prices and lower feed costs. Profitability is at or approaching 10-year highs in spot Q4 as well as through the first half of 2014, and well above the 80th percentile in Q3 also. As such, opportunities abound to protect favorable forward margins in the current environment that many producers are taking advantage of. Unfortunately, the budget impasse in Congress leaves the government shut down as of this writing, and USDA has yet to release the October WASDE report scheduled last Friday. Harvest progress appears to be advancing quicker than anticipated though, with current estimates that nearly half the soybeans and at least one third of the corn crop has already been gathered. Yield reports are also coming in much … Get the Complete Report »

Dairy
Dairy margins have continued to improve through the first half of October as feed costs remain under pressure while milk has strengthened. The spot Q4 margin is near the 90th percentile of the past 10 years while margins through the first half of 2014 are well above the 80th percentile, and Q3 is over the 70th percentile. Unfortunately due to the budget impasse in Congress, the resulting government shutdown has removed much of the transparency from the market with USDA reports not getting released. The October WASDE scheduled for last Friday has been postponed, with market participants eagerly awaiting updates to … Get the Complete Report »

Beef
Beef margins were mixed since the end of September, improving in nearby periods while weakening in deferred marketing slots. The first half of October has featured steady to weaker corn prices while cattle prices have been stronger. Feeders in particular have been on fire, explaining the margin deterioration in deferred marketing periods as the cost of feeders has exceeded the value of fat cattle despite cheaper projected feed costs. For cattle already on feed however, or for animals to be placed this fall, forward margins remain quite favorable – above the 90th percentile of the past ten years. Deferred margins by contrast are negative in the June, August and October 2014 marketing periods. As of this writing, the government is still … Get the Complete Report »

Corn
Corn margins have remained relatively flat since the beginning of October. News during the period has been nearly non-existent as the U.S. Department of Agriculture has been unable to report on exports, weekly harvest progress or its monthly supply and demand report due to the government shutdown. Though not an official stat, some private forecasters have estimated corn harvest around 30% complete as of Sunday, nearly 10% behind the five-year average for this time of year. Although progress continues to lag averages, no threatening weather is forecast over the next ten days which should allow producers to continue harvesting this year’s potentially record crop. The RFS biofuel mandate has been discussed during the period and while the EIA has not officially announced … Get the Complete Report »

Soybean
Soybean margins have been mixed over the past two weeks as nearby margins have been pressured while deferred margins have increased somewhat. The USDA’s doors remain closed as the government shutdown continues—leaving market participants without data on harvest progress, export sales or the always crucial monthly supply and demand report. Some private forecasters have reported harvest progress to be roughly 45% complete as of Sunday compared to 58% on a five-year average for this time of year. Although harvest progress remains behind, weather forecasts do not call for any threatening temperatures over the next ten days. Further, normal precipitation is expected which should allow for continued harvest progress. NOPA recently reported … Get the Complete Report »

Wheat
Wheat margins have improved since the beginning of October as continued demand from Brazil and China has been the theme. Export sales commitments continue to exceed the pace required to meet the USDA expectation amid heavy global competition. Domestic prices in China remain at a record high currently which will continue to incentivize their government to make purchases in an effort to maintain an adequate supply. The U.S. faces export competition from Europe, the Black Sea region and could soon see India re-enter the export market. India has kept a minimum price on what they would accept for their domestic wheat supplies since the summer when prices began to slip below cost of production. With the recent move higher in the … Get the Complete Report »

Hog
Margins continued to strengthen significantly through the end of September, with a further rise in hog prices complimented by lower feed costs providing improvement on both the cost and revenue sides of the equation for hog finishers. USDA released both the Quarterly Hog and Pig report as well as the Quarterly grain stocks this past week, reporting all hogs and pigs as of Sep 1 at 100% of a year ago, 1.4% above the average trade guess. Countering this to some degree, the breeding herd was also pegged at 100% of last year vs. the average trade guess at 101.5% of a year ago. Perhaps more surprising were the June-Aug pig crop and pigs per litter figures at 2% above last year when the market was anticipating a figure equal to a year ago. Also, with the exception of hogs weighing over 180 pounds at 96% of last year, the other weight classes were all … Get the Complete Report »

Dairy
Dairy margins continued to strengthen through the end of September, due primarily to lower feed costs with milk prices generally steady over the second half of the month. From a historical perspective, margins are relatively strong, existing above the 80th percentile of the previous 10 years through the first half of 2014, and at the 75th percentile in Q3. USDA released their Quarterly Grain Stocks report on Monday which was considered quite bearish for both the corn and soybean meal markets. The figures become official ending stocks for the 2012-13 crop year, and in each case were reported above … Get the Complete Report »

Beef
Beef margins improved significantly over the second half of September, as lower feed costs and higher fat cattle prices more than made up for strengthening feeder cattle values. Projected forward margins remain well above the 90th percentile of the previous 10 years through the April 2014 marketing period, with negative margins still indicated in the summer of 2014 against the June and August marketing periods. USDA released their Quarterly Grain Stocks report Monday, pegging Sep 1 corn stocks at 824 million bushels. The figure was up 163 million bushels from the September WASDE report and 136 million higher than the average trade estimate, becoming the official ending stocks of the 2012-13 crop year. The report adds a bearish dimension to the harvest pressure that has already begun setting in, with growing expectations that USDA may raise the yield projection in the October WASDE based on early results being reported. Cattle prices meanwhile have … Get the Complete Report »

Corn
Corn margins have weakened further since the middle of September as excess domestic supplies are beginning to be realized. Harvest progress is in full swing with 12% of the U.S. corn crop harvested and better-than-expected yields out of the Eastern belt being reported. Current weather models do not forecast any adverse weather that would disrupt harvest for the next 10 days and will likely add to price pressure. NASS recently reported final ending stocks for old crop corn to be 824 million bushels, 163 million bushels above where the latest USDA supply and demand report had estimated stocks to be. The larger stocks are attributed to poor livestock feeding rates for the fourth quarter as prices remained high relative to other energy sources. Demand for new crop will now … Get the Complete Report »

Soybean
Soybean margins have weakened moderately since the middle of September as harvest pressure and larger old crop stocks have been realized. NASS recently pegged old crop ending stocks at 141 million bushels, up 16 million bushels from the expectation in last month’s supply and demand report. The USDA has estimated old crop ending stocks at 125 million bushels since February, giving the cash market plenty of time to ration demand. Adding to a slightly negative stocks report has been harvest pressure. Currently, U.S. farmers have reaped 11% of this year’s crop compared to 20% on average. As harvest progresses, the market will shift its focus on demand and South American production. Demand prospects are currently … Get the Complete Report »

Wheat
Wheat margins have surged since the middle of September as demand has come for domestic exports and livestock feeding. Export sales have surged of late as both China and Brazil have been large buyers in recent weeks. Exporters have shipped roughly 48% of the USDA forecast compared to 37% on average for this time of year and has lent support to market prices. NASS recently reported wheat quarterly stocks at 1.855 billion bushels, 83 million bushels below the pre-report expectations. The smaller-than-expected stocks are attributed to better livestock feeding for the first quarter. USDA also reported on small grains production, estimating Hard Spring wheat production at … Get the Complete Report »

Hog
Forward profit margins strengthened significantly since the end of August on a combination of surging hog futures and steady to weaker corn and soybean meal prices. Profit margins are now well above the 90th percentile of the previous 10 years through the 3rd quarter of 2014, which is unusual given that such historically strong margins are typically difficult to achieve that far forward in time. USDA’s latest WASDE report increased the corn yield projection to 155.3 bushels per acre from 154.4 in August, with production forecast up 80 million bushels as a result to 13.843 billion. Ending stocks were raised 18 million bushels from last month to 1.855 billion, with the report indicating there is going to be plenty … Get the Complete Report »

Dairy
Dairy margins improved during the first half of September, as lower projected feed costs following the recent USDA report against a backdrop of steady milk prices helped to strengthen projected forward profitability. On both an absolute and relative basis, margin projections are currently strongest in nearby Q4 where they are above the 80th percentile of the previous 10 years, with margin projections through the first half of 2014 above the 70th percentile as you can see here. USDA released their September WASDE report last week which raised the … Get the Complete Report »

Beef
Beef margin projections were mixed over the past two weeks, deteriorating in nearby positions where cattle are already on feed and feed either entirely or in part priced. Forward margins improved slightly since the end of August as lower feed costs are helping to offset the impact of higher feeder prices, and/or steady to lower fat cattle prices. From a historical perspective, margins through the April marketing period still remain relatively strong above the 90th percentile of the previous 10 years, while negative margins are indicated after that in the June and August 2014 marketing periods. The main feature of the past two weeks was USDA’s September WASDE report which raised the … Get the Complete Report »

Corn
Corn margins have weakened moderately since the beginning of September as supply prospects for domestic farmers came into better focus. The USDA recently updated its supply and demand forecasts for this crop year, raising projected ending stocks 18 million bushels to 1.855 billion bushels due to larger national yields, nearly three times the current stocks on hand. The increase in projected stocks came as a bearish surprise as market participants expected a reduction in stocks. The national average for yields was increased 0.9 bushels per acre from the August estimate to 155.3 bushels per acre which if realized would result in a record … Get the Complete Report »

Soybean
Soybean margins have been largely volatile since the beginning of September as the market began to digest a potentially smaller harvest than previously expected. The USDA recently updated its expectation for supplies in the coming crop year, lowering ending stocks 70 million bushels to 150 million bushels, 25 million above the current stockpiles. The reduction in expected stocks came as the average national yield estimate was lowered by 1.4 bushels per acre to 41.2 bushels due to poor weather particularly in the western Corn Belt. Late season heat along with a lack of moisture during the critical reproductive phase … Get the Complete Report »

Wheat
Wheat margins have lost ground since the beginning of September and are now at the lowest level for the history of the December contract month. The USDA recently updated its balance sheet forecast for the new crop, raising ending stocks 10 million bushels to 561 million bushels. The increase was a result of larger import expectations due to the large Canadian crop. The USDA chose to leave all demand estimates alone but did adjust exports and food use between crop qualities. Food use for Hard Red Spring wheat was raised 10 million bushels, while food use for Hard Red Winter wheat was lowered 10 million bushels. Hard Red Spring wheat exports were … Get the Complete Report »

Return Top

There is a risk of loss in futures trading. Past performance is not indicative of future results. The information contained in this publication is taken from sources believed to be reliable, but is not guaranteed by Commodity & Ingredient Hedging, LLC, nor any other affiliates, subsidiary, or employee, collectively referred to as CIH, as to accuracy or completeness, and is intended for purposes of information and education only. Nothing therein should be considered as a trading recommendation by CIH. The rules and regulations of the individual exchanges should be consulted as the authoritative source on all contract specifications and regulations. Information provided herein is not a substitute for periodic account statements delivered in accordance with CFTC Regulation 1.33. CIH is an equal opportunity provider and employer.

Testimonials are not indicative of future success. Individuals providing testimonials were not compensated. The information contained in this publication was created by Commodity & Ingredient Hedging, LLC and should not be copied or redistributed without its consent.

Copyright © 2021 Commodity & Ingredient Hedging, LLC. All rights reserved.