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Moe Agostino, Managing Commodity Strategist, Farms.com Risk Management – Daily Commodity Market Commentary Report for October 19, 2009.
This video is being sponsored by Pride Seed Performing Everywhere You Go.
In this past Friday’s Cattle on Feed Report for October 16, 2009 came in as expected but for the first time in 18-months the on-feed numbers were higher than a year ago but the supplies were still relatively small so this should be supportive of cattle futures.
Cattle in US feedlots with capacity of 1,000 or more head totaled 10.5 million head on October 1, 2009 and this was 1% (101%) above October 1st, 2008 vs. expectations of a 100% vs. prior month at 99%.
Placements in feedlots during September totaled 2.39 million, 5% (105%) above 2008 vs. expectations of 105% vs. prior month of 102%. Net placements were 2.06 head.
Marketing’s of fed cattle during September totaled 1.75 million head, 4% (96%) below 2008 vs. expectations of 98% and prior month at 96%. This is the third lowest fed cattle marketing’s for the month of September since the series began in 1996.
The October 1 cattle on feed report was neutral, however the September marketing’s total was reported smaller than expected (96% vs. 98%) and the futures market may view this as bullish but cattle futures may have already built in these numbers so a bottom has occurred for now but we expect the futures to retest the bottom one more time.
In other news, weekly export sales were reported this past Friday with US soybeans at 654,500 mt above expectations of 500-650,000mt up 45% from the week prior while corn was reported at 631,800 mt vs. expectations of 600-800,000 mt, up 21% from the week prior and finally wheat came in at 480,200 mt vs. expectations of 450-600 000 mt down 37% from the week prior.
The much anticipated Deutsche Bank liquidation or rebalancing of their commodity portfolios begins today and is expected to mostly impact wheat, corn soybeans, cattle and hogs over the coming 10 days.
The upper US Midwest including Ontario has experiencing a cooler than normal growing season and now persistent rainfall and cold temperatures have caused the worst harvest delays in recent memory.
In today’s USDA crop progress report markets are not looking for much progress on harvest as last week provided more rain so weather will continue to be the focus with the grain markets as harvest will be a tough go and brief with periods of dry periods as rain is called again by the middle of this week. Unfortunately it might just be a long harvest this year.
Agriculture is a numbers game. Farmers need to determine a fair land rental price or if their operating line of credit will get them through tight times. While uncertainty around factors such as the weather makes it nearly impossible to know exact revenue and expense numbers, it is possible to get accurate estimates using cash flow projections.
Following a three-week nomination period for directors in five zones across the province, the Ontario Federation of Agriculture (OFA) is proud to announce the return of a strong contingent of agricultural leaders as well as the addition of one new member to the organization’s Board of Directors.