| | US crops | Canadian crops | Livestock comments
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US Crops
Corn prices were pressured down this week as less rain fell in major growing areas than was expected, enabling rapid planting progress. US corn planting is expected to be about 80 % completed by Monday, although emergence is still well behind average due to cool, wet conditions to date. With fall prices still strongly in favor of corn over soybeans, it is now more likely that corn acreage will exceed the 86 million contained in the March 31 prospective planting report. This week's export sales report showed better than expected corn exports. Unless the sales pace slows, USDA could revise upward the projected corn sales in their June 10 supply demand report. Over the week, December corn futures dropped by 33 cents to close at $6.17. December corn futures has chart support from the current price down to major support at $5.92. Last Friday's contract and all-time high of $6.55 is the price resistance level, and that will not be exceeded until another threat to the crop develops. Considering the current USDA forecast of much tighter corn supplies next crop year, it would be surprising if new highs are not made between now and harvest.
Soybean price action was choppy this week, with several factors exchanging dominant roles. More rapid US planting was negative for soybeans in one sense, but to the extent that it could mean higher corn acres at the expense of soybeans, it was also a positive. The Argentina farmers' delivery strike in protest of soybean export taxes was very much in the news. As of Friday's close, the strike has been extended to May 21. The strike implies the possibility of higher US soybean exports near-term, and is therefore price supportive. New crop soybean futures continued to benefit from last week's lower than expected USDA estimate of next year's US soybean carryover. Soyoil prices were again supported by new record high crude oil prices. Over the week, July soybean futures gained 20 cents to close at $13.78, November soybean futures gained 45 cents to close at $13.49, July soyoil lost 15 points to close at 61.85 cents, and July soymeal gained $11.50/ton.
Wheat prices eroded further this week. Despite some US wheat crops in poor condition, the market is expecting record world production, and no major crop problem areas are apparent right now. US hard red winter wheat harvest has begun in southern regions. Near-term, US wheat markets could be pushed lower yet, and price rallies limited. Over the past week, July Chicago wheat lost 29 cents, July Kansas City wheat lost 24 cents, while new crop December Minneapolis wheat lost 30 cents to close at $8.70/bushel. That is the lowest close for the December Minneapolis wheat since January 2.
Canadian Crops
Canola futures prices registered a choppy week, starting out strong after last Friday's rally, and finishing meekly. Canola export news is lacking and seeding is progressing rapidly across the Prairies. Also, the Canadian dollar seems to have an upward bias, closing near par with the US. Crushers are still doing well based on crush margin estimates, and are therefore likely to be offering the better basis levels in most areas. Until a crop problem develops or export business occurs, canola prices are likely to struggle. On the other hand, downside is limited this early in the growing season. Over the week, July canola futures lost $25/tonne to close at $608.90. Important support for July futures is at $584/tonne. November canola closed at $631.50/tonne, down $22/tonne. Chart support on the November is at $603.
Lethbridge-area cash barley prices were steady last week, although elevator bids were noticeably lower. July barley futures lost $5.20/tonne to close at $244.20, while new crop October barley lost $3.40/tonne to close at $255/tonne. Elevator oat and edible pea prices had a downward bias, but feed wheat prices were mostly higher.
Livestock Comments
US cash cattle traded steady to a bit higher than last week's $94/cwt. Live cattle futures were off slightly, but feeder cattle futures benefitted from the drop in corn futures. For example, October feeder cattle futures made a new contract high of $115.50, and closed up almost $3/cwt. Beef cutout values were steady to higher, with choice over $156, and select at $152/cwt. Friday's cattle on feed report was about as expected. The May 1 on-feed total was down 1.4 % from last May. Placements into feedlots during April were down 2 % from last April, but April marketings were up almost 11 % from last April.
Alberta fed cattle prices were steady with last week, and traded in a range of $87.40 to $92.35/cwt. Feeder cattle price averages were $1 to $3/cwt higher on lower volume. Slaughter cow prices were quoted as steady/lower in the wide range of $36 to $59/cwt. For the week ending May 10, there were 14,618 feeders exported from Canada to the US, along with 10,215 fed cattle and 3855 slaughter cows and bulls.
US pork product values have increased by over 40 % in the last two months. Demand has been very strong, mainly due to higher pork exports. US pork exports for the month of March were up almost 38 % from last March, with the bulk of the increases to China, Hong Kong and Russia. Cash hog prices have increased more quickly than pork values, however, so US packers tried to improve their margins this week by curtailing cash hog bids and reducing kill levels.
In response, most lean hog futures months also slipped. Alberta's weekly average Index 100 hog price improved by $6/ckg to $140/ckg. |
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