Evening Report -- Advice (VIP) -- November 27, 2013

November 27, 2013 08:10 AM


LIVESTOCK PRODUCERS: CLAIM PROFITS ON DEC. MEAL HEDGES... Friday marks the start of the delivery process for December soybean meal futures. With profits on the long hedges against 25% of 4th-qtr. meal needs held in that contract and our unwillingness to carry a position into delivery, it's time to step out of the coverage. Our exit was $448.40 for a profit of $16.20. Continue to hold the long coverage on 25% of 1st-qtr. meal needs in March soybean meal futures.



HAPPY THANKSGIVING FROM PRO FARMER... Markets and government offices are closed Thursday for Thanksgiving. Therefore, there will be no Pro Farmer Today updates. Grain and livestock markets will be open for an abbreviated session Friday, Nov. 29 -- from the normal start of open-outcry trade (there is no overnight electronic trade Thursday night/Friday morning) until noon CT for grains and 12:15 p.m. CT for livestock futures. We'll cover global news and market events from Thursday and early Friday morning in "First Thing Today" (although at a slightly later time to include opening calls for Friday morning) and brief closing market commentary in "After the Bell." Any other major breaking news or market-moving developments will be covered on your website, www.profarmer.com.

Everyone at Pro Farmer wishes you and your family a happy and blessed Thanksgiving!



ETHANOL PRODUCTION REBOUNDS... According to U.S. Energy Information Administration (EIA) data, ethanol production rose by 23,000 barrels per day (bpd) during the week ended Nov. 22 to 927,000 bpd -- tying the highest output rate for the year. The four-week average for ethanol production stood at 915,000 b/d for an annualized rate of 14.03 billion gallons. While production increased, ethanol stocks declined by 61,000 barrels to 15.02 million barrels -- the lowest since EIA started reporting the weekly data.



ALL-ITEMS CPI FELL 0.3% IN OCTOBER... USDA's Economic Research Service (ERS) reports the all-items Consumer Price Index (CPI), which measures economy-wide inflation, fell 0.3% in October from the month prior and it now stands 1% above year-ago levels. The CPI for all food, on the other hand, rose 0.1% in October to stand 1.3% above year-ago levels. The food at home (grocery store food items) CPI rose 0.2% in October and is up 0.8% from year-ago. The food-away-from-home (restaurant purchases) CPI rose 0.1% in October and it stands 1.9% above October 2012 levels.



ERS MAKES NO CHANGES TO ITS 2013 OR 2014 FOOD INFLATION FORECASTS... Based on current conditions, ERS's inflation forecast for 2013 calls for increases of 1.5% to 2.5% for all food prices over the year prior. This signals prices are likely to increase less than they did in 2012 and that annual inflation would again be below the 20-year historical average of 2.8%.

Looking ahead to 2014, ERS expects a 2.5% to 3.5% increase in all food prices over this year, which would be closer to the historical norm. This forecast is based on expectations for inflationary pressures to moderate and given the outlook for commodity prices, animal inventories, ongoing export trends and "normal" weather conditions. Learn more.



CROP INSURANCE INDEMNITIES NEAR $6.1 BILLION... As we reported in "First Thing Today," U.S. crop insurance indemnities stand at $6.093 billion as of Nov. 25 but still lag the record level registered for 2012 crops of $17.427 billion, according to Risk Management Agency (RMA) data. The rise in indemnities moved the loss ratio for 2013 crops to 0.52, also well behind the 1.57 mark set for the 2012 payouts. Wheat indemnities remain the largest share of those payouts, with $2.136 billion, while payouts for corn increased to $1.695 billion and indemnities on cotton are at $706 million. The level of indemnities so far in 2013 remains behind the pace seen in 2012 at this point of the year -- $6.093 billion for 2013 versus $6.270 billion for 2012 -- though the gap has been narrowing.




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