On Thursday, May 10, USDA released its May World Agricultural Supply and Demand Estimates (WASDE), which contained updated estimates for the 2011/12 marketing year and USDA’s first forecasts for the 2012/13 marketing year.
Last Monday, April 30, the CME Group issued a statement that it had no formal response to rumors that were circulating that it was looking to expand the daily trading hours for its CBOT grain futures contracts. The next day, May 1, CME Group issued a press release indicating that it was expanding trading hours on grain futures contracts beginning on May 14.
Last week was another week of intense volatility in the grain and livestock markets. While early freeze concerns in South America prompted a strong rally in the soybean market, the live cattle and feeder cattle market was rocked by USDA’s April 24 announcement of the nation’s fourth case of bovine spongiform encephalopathy (BSE).
What you would do if a weather disaster struck your ranch or feed lot? I remember thinking that following the tornado that destroyed Manchester, SD. I think we’re all guilty of focusing so much on the day-to-day issues that we ignore potentially serious possibilities. While there is nothing that we can do to prevent a severe weather outbreak, some time spent thinking about our response could prove very valuable.
On Friday, USDA released the results of its April Cattle on Feed survey as well as its monthly Cold Storage report. As expected, the Cattle on Feed inventory came in 2% higher than year-ago levels at 11.482 million head.
On Tuesday, April 10, USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE). As is typical for the April report, no major changes were made in the domestic supply and demand balance sheets for corn and soybeans.
The second week of April often marks the spring high in the fed cattle market. It won’t this year, though, as the weekly 5-Area slaughter steer price has declined nearly $9/cwt since the week ending March 2. The nearby April CME Live Cattle futures contract has declined even more, dropping $11.62/cwt since March 2. Even the red-hot feeder cattle market has fallen $12.60/cwt, basis the April CME Feeder Cattle futures contract, during that time. A number of factors have contributed to weaker cattle prices in the last month.
In last week’s Cattle & Corn Comments, I pointed out that of the Prospective Plantings and Grain Stocks reports that were released on Friday, the Grain Stocks would dominate the trade’s reaction to the reports. For the most part, that prediction came true as bullish new crop soybean and old crop corn figures trumped bearish new crop corn acreage.