Weekly Roberts Market Report11 October 2012
Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University
US - CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The DEC’12 contract closed at $7.410/bu; down 7.0 ¢ /bu. MAR’13 corn futures closed at $7.404/bu; down 8.0 ¢ /bu. The DEC’13 contract closed at $6.246/bu; up 0.5 ¢ /bu.
Corn futures traded lower pressured by negative technical signals and positioning ahead of USDA’s World Agriculture Supply Demand Estimate (WASDE) report due out Thursday at 8:30 am. Follow-through non-commercial long-liquidation from last week’s bearish close continued to drive investors away. Fundamentally the commercial side continues to grow more bullish toward the longer-term supply and demand situation as indicated by the strengthening trend in a series of futures spreads. However, inactivity of investors will allow the market to continue to struggle as shown by the Relative Strength Indexes and both moving average measures in contracts through December 2014 turning down as traders minimize risk ahead of the report. The national average basis is -18 ¢ /bu under CBOT December futures. Basis in the Mid-Atlantic ranged from +68 ¢ /bu in Virginia to +$1.13/bu in the middle of North Carolina. Producers should be priced at 60% of anticipated production and 25% with PUT Options holding the remainder of un-priced corn until harvest to sell. Storing un-priced corn without a floor price may not be such a good idea.
SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. NOV’12 futures closed at $15.500/bu; off 1.5 ¢ /bu. The MAR’13 contract closed at $15.060/bu; down 7.0 cents ¢ /bu. NOV’13 futures closed at $13.214/bu; off 12.75 ¢ /bu. Soybean futures were pressured by spillover from corn and apprehension over what might be in the Thursday WASDE report. Hedgers took profits and funds liquidated positions to minimize risk ahead of the report. The national average basis for soybeans is -50.0 ¢ /bu under CBOT November futures. Basis in the Mid-Atlantic ranged from -70 ¢ /bu in Virginia to +$1.23/bu in the middle of North Carolina.
WHEAT futures in Chicago (CBOT) closed up on Monday. DEC’12 wheat futures finished at $8.610/bu; up 3.5 ¢ /bu. The JULY’13 contract closed at $8.406/bu; up 0.5 ¢ /bu. Wheat futures settled slightly higher on worries about threats from dry weather to world production offsetting risk associated with the USDA WASDE report. Wheat has been the strongest market in part due to lower production forecasts in Australia and lower-than-expected yields and quality in the European Union. The French soft wheat crop was reduced to 35.9 mi tonnes (1.319 bi bu) from 36.5 mi tonnes (1.34 bi bu) by the country’s farm ministry. However, this new estimate is still 5.6% greater than the 2011 harvest. However, significant production reductions in other countries have contributed to lower global stocks. Spillover from corn and soybeans countered what might have been substantial gains in CBOT wheat. Soft Red Winter Wheat’s national average basis was unchanged at -38 ¢ /bu under CBOT December futures. Hard Red Winter Wheat was placed at -61 ¢ /bu under Kansas City December futures. Hard Red Spring Wheat national average basis was placed at -78 ¢ /bu under the Minneapolis December futures contract.
Further ReadingYou can view the full report and graphs/tables by clicking here.