Hog and Pigs Report Suggests No Expansion
Dec 30, 2013
Good Morning! Paul Georgy with early morning comments for December 30, 2013 at 5:00 am.
Grain futures are lower following weakness in Asia and Europe.
Weekend rains were supportive to crop conditions in South America. Forecasts are for more rains in Argentina and Southern Brazil for the rest of the week.
Export sales were above trade expectations in corn, soybeans and wheat. Corn buyers were some of our regular customers coming back to US as prices have become more competitive.
Ethanol production has been aggressive in recent weeks and is running 11% greater than a year ago. It is likely we will not continue at this pace as the USDA is targeting a 6.5% year over year gain.
Water levels on the Mississippi River at St. Louis are complicating barge movement as water levels could drop further in the coming days.
The dollar is lower off of strength in the euro. Comments by the ECB that there is no need to cut interest rates further has supported euro.
Tomorrow is first notice day for January contracts at the CBOT.
Markets will trade regular hours today and tomorrow, closed on Wednesday reopening on Thursday at 8:30 for grains.
The USDA released the Quarterly Hogs and Pigs Report on Friday afternoon.
Ranges Average Actual
All hogs Dec 1 98.6-101.0 99.9 99.3%
Kept for breeding 100.2-101.9 101.0 98.9%
Kept for market 98.4-101.1 99.8 99.4%
The USDA revised down the previous two years of hogs and pigs numbers to match actual slaughter. The numbers imply expansion did not start in 2013. USDA kept the pigs per litter number at large levels which implies no PED based problems. This report is friendly and we would call futures 50 to 75 cents higher on the opening. Pork cutout values were down 3.48 on Friday.
Cash cattle were actively traded at mostly 4.00 higher at 134 to 135. Beef cutout values were higher on Friday with choice up .06 and select was up .84. The CME Feeder Index is 164.14.
I will be at the Northern Illinois Farm Show at 9:00 a.m., January 8th in DeKalb, Illinois. We will share some pre-report thoughts on how the January USDA Report will impact grain prices in 2014. Get a peek on some of the information that will be shared at the Allendale Ag Leaders Conference Webinar on January 28, 29 and 30, 2014.
Markets as of 5:00 AM
- Mar Corn -2
- Jan Beans -7 3/4
- Mar Wheat -2 1/4
- Feb Cattle Steady-Higher
- Feb Hogs Steady-Higher
- Mar Dlr -.14
- Mar S&P +.75
- Feb Crude +04
- Feb Gold -10.80
Chart of the Day
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