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Conway, Ark.(AgriMarket Buzz)-- This week's USDA cattle on feed report is viewed as neutral to next week’s live cattle futures market, with the lowest on feed totals since 2004. Numbers were near average of pre-report estimates and should not provide much of an impact to the board.
Early next year, the market is still expected to see slaughter supplies running close to levels seen more than a year ago, which could keep pressure on prices in the near term, but the placement pattern continues to point toward tighter slaughter supplies by late first quarter and early second quarter--helping to support back month futures.
As we have seen in the past few months though, this may all depend on actions in the financial markets, as the cattle market has not divorced itself from the swings in these outside markets.
Jim Daven
Commercial Grain Inc
1-501-505-8000
CONWAY, Ark.-(AgriMarketBuzz)--The January-March spread regained its inverse this week, as futures paused following the rapid upside correction that began in early December. With the current lack of deliverable receipts, the January contract may continue to go its own way as first notice day approaches at the end of the month.
USDA is scheduled to release its December 1 stocks estimate and its final 2008/09 production estimate on January 12. Many in the rice industry expect a substantial downward revision in USDA’s production estimate, making the report a potential market mover.
The rice trade appears to be waiting for the calendar to turn to see how the delivery situation against the January futures plays out and to see whether the January 12 reports redefine the U.S. supply situation to any great degree.
We also are awaiting new input and have made no new changes to our supply/demand balance sheets or our price expectations this week.
Jim Daven
Commercial Grain Inc
1-501-505-8000
SINGAPORE-(Dow Jones)--Sugar and cotton prices will be under upward pressure in 2009-10, as the global supply and demand balance is moving towards a price-supportive situation, according to a Rabobank report.Sugar prices will continue the recovery starting this year, after two years of pronounced surplus production, as the global supply and demand balance moves towards a balanced or even deficit market, it said in the report Wednesday.The bank said the supply-demand situation in 2008 has set the tone for higher prices in 2009 and 2010, referring to sugar's multi-year cyclical price movements.However, "it remains to be seen whether the financial market turbulence and its impact on global economic growth will have a significant impact on growth in demand for sugar in emerging markets, which are the principal drivers of rising consumption."Asia, which accounts for 44% of global consumption, has been leading the global demand growth in the past decade - with an annual rate of 3.2% versus 2.3% worldwide.Rising populations, higher real incomes and the growth of urban populations are cited as the major drivers, which are expected to sustain the steady growth, it added.The report also said the "relatively small changes in the allocation of cane to sugar or ethanol production can significantly impact the availability of exportable sugar from Brazil," or in turn world sugar prices, but added it is impossible to draw simple conclusions regarding the effect of energy price trends on sugar prices.On the agricultural commodities outlook for 2009, Rabobank forecast a decline in both output and consumption of cotton for the upcoming year.The bank projected the global output to fall by around 5% for 2008-09, with most countries expected to see a decline in production as a result of acreage competition, given more attractively priced grains and oilseeds.Global consumption is forecast to fall for the first time in a decade in 2008-09 due to the global economic downturn and more attractive prices of polyester versus cotton, it said."A global decrease in cotton acreage over the next year will likely eat into stocks enough to place some upward pressure on prices," though that may be at least a year away, it said."Should production start to show a reasonable decrease in China, or if the U.S. should have a higher-than-expected level of crop abandonment, prices could demonstrate a bullish response."
CENTRAL CITY, Neb.-(Dow Jones)--Soybean and feed-grain premiums appreciated once again on the U.S. cash grain market Wednesday - holding fast to an ongoing cold-weather rally - although wheat basis had weakened. Grain futures continued a week-and-a-half-long rally, which now has farmgate prices for all commodities residing at 20-40-day highs.National-average spot basis gains of 1/4-3/4 cent per bushel were seen in cash corn, soybeans and grain sorghum Wednesday. Premiums paid for corn at a number of terminals monitored by Dow Jones Newswires rose by a full 2-7 cents."Country movement of grain remains non-existent," said Iowa commodity trade advisor Karl Setzer Wednesday.Domestic wheat markets had diverged from the basis rally seen in other grains, though, with differentials dipping by an average of 1/4-3/4 cent for winter wheat, and a full 2 cents per bushel for hard red spring wheat entering Wednesday's day-trading session."[HRS] basis feels very toppy at this point, as wheat is showing up and causing bids to retreat," said Country Hedging. "Look for slow trade into the New Year due to adequate (flour) mill coverage."U.S. grain futures stepped higher overnight, accruing cash-contract Globex gains of 2 cents for HRS wheat, around 5 cents for corn/oats, 7-9 cents for winter wheat and 14-15 cents for soybeans/rice."Tight farmer holding is keeping hedging pressure at bay," said the Hightower Report in an analysis of the corn market. "Farmers may have been encouraged to hold, by the vigor of the bounce [93 1/2 cents in March CBOT corn futures], over the past week and a half."Average cash prices for U.S. corn stand at a six-week high, with elevator bids also marking four-week tops for wheat and a 2 1/2-week peak in soybeans.National cash price indexes maintained at the Minneapolis Grain Exchange stood at $8.09 1/4 for soybeans at the close of business Tuesday, indicating an average basis of -49 1/4 cents relative to the days final settlement of January CBOT soybean futures. Domestic cash prices also averaged $3.56 for corn (-38 cents basis March CBOT corn), $4.93 1/4 for hard red winter wheat (-71 3/4 cents basis KCBT March wheat), $3.87 1/2 for the soft red winter wheat (-$1.56 1/2 basis CBOT March wheat) and $6.36 1/2 for hard red spring wheat (+29 1/4 cents basis MGEX March wheat futures).Rain was falling in the Delta and Southeast, while snowflakes fluttered in the Northeast, Pacific Northwest and a small section of the southern Plains Wednesday. Subzero cold still gripped the northern Plains and upper Midwest."Weather systems have been traversing through the nation's midsection with great regularity as of late, and that looks to continue into next week," said Freese-Notis Weather. "The next storm system, set to impact the Midwest tomorrow and Friday, looks to be a real doozy, putting down heavy amounts of rain, ice, and snow ... depending on your exact location."The service said although precipitation will be confined to a steady rain in the Ohio River Valley, colder temperature gradients could produce a major ice storm along the Interstate 80 corridor; targeting southern Iowa, northern Illinois/Indiana/Ohio and Lower Michigan with ice accumulations at least one-half inch thick. The service warned that up to a foot of new snow may fall just to the north of that area."All of this fun-and-games gets started for areas west of the Mississippi River tomorrow afternoon and will already be as far east as Ohio by Friday morning," said Freese-Notis.Wintry weather can significantly hinder the movement of cash grain from farm-to-market by truck and disrupt shipments from interior terminals to end-users or export terminals by train and barge as well.
