Daily livestock report apr 02 2013

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Daily livestock report apr 02 2013

  1. 1. Sponsored by Vol. 11, No. 61 / April 2, 2013  The impacts of Thursday’s USDA reports were still being USDA GRAIN STOCKSfelt in livestock and grain markets yesterday as the trade grappled March 28, 2013with many new prospects for the coming crop year. As with all in- Analysts Estimates*formation, some impacts were good and some were bad, largely de- USDA, USDA,pending on one’s point of view. A friend at church on Sunday lamented Units Mar 1, 12 Low High Average Mar 1, 13that corn prices had fallen sharply and I (Steve) told him it was one of Corn Bil. Bu. 6.023 4.743 5.248 4.995 5.400the best things to happen to my business and clients in awhile. He un- Soybeans Bil. Bu. 1.374 0.900 1.059 0.948 1.000derstood but definitely did not appreciate my “contrarian” view. Per- Wheat Bil. Bu. 1.199 1.010 1.249 1.165 1.230spective is indeed important. *Source: Dow Jones With the perspective gained through a couple of days of mar- U.S. CORN STOCK REDUCTIONS,ket observation, let’s consider some more last Thursday’s reports —and especially those dealing with crops. QUARTERLY The big mover for grains was the Grains Stocks report that Q1 Q2 Q3 Q4indicated inventories of corn on March 1 that were sharply higher than 4.5what was expected by analysts in pre-report surveys. The estimated 4inventory of 5.4 billion bushels was over 150 million bushels above theHIGHEST pre-report estimate and over 400 million —or 20% — above 3.5the average, implying considerably less corn usage since December 1. 3We know that ethanol usage of corn has been sharply lower but this s l estock figure implies sharply lower feed use as well — even though meat h s2.5 uand poultry production has been higher during that period. A good por- B n 2tion of that increase is due to higher cattle weights which have been o i l l idriven by the impacts of beta-agonist feed additives which cause very B 1.5efficient gains late in the animals’ feeding period. But hog and chickennumbers are larger than last year and we doubt that feedlot efficiency 1alone can drive that kind of change in corn feed usage. To say the 0.5least, the grain stocks numbers still mystify us a bit. To understand the importance of these numbers, consider the 0implied drawdown of corn stocks in the chart at right. The 2013 number 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013is the smallest since 2003 and is 28% smaller than last year. Note thatthe quarters here are relative to the crop year (Q1 is Sep-Nov, etc.). PLANTING INTENTIONS But livestock producers will not look a gift grain bin in the March 28, 2013mouth (or door or whatever else you want to put in here)! This report Pre-Report Estimateshas pushed nearby corn futures down nearly $1.00 per bushel in thepast two days and new crop December corn closed at $5.35 yesterday, USDA,$0.36/bushel lower than on Wednesday of last week. That reduction Crop 2012 Range Average March 2013has added about $7/head to our hog profit forecast for 2013, a terrific (Million Acres)change but the projected LOSSES are still about $12/head. New crop Corn 97.155 96.5 - 98.5 97.339 97.3futures are now within $0.70 or so of USDA’s forecast 2012-13 seasonaverage corn price of $4.80. With so much risk still ahead for this crop, Soybeans 77.198 77.0 - 80.0 78.351 77.1it is probably time to start pricing feed needs for 2012-13 — not all feed All Wheat 55.736 55.6 - 57.3 56.320 56.4of them yet, but some. If the weather is good, $5.50 corn futures will becorn that feeders buy this year but they may also be the cheapest. tom of the estimate range, adding some fuel to the soybean complex The much-anticipated report that turned out pretty boring on Thursday afternoon.Thursday was Prospective Plantings. The numbers came in pretty But the real story may be WHERE THE CORN ACRES areclose to what was expected by analysts. That is especially true for corn located. The tables on page 2 clearly show that Cornbelt producersand wheat estimates which are both within 100,000 of the average pre- may be tiring of the corn-on-corn yield drag and that we are very de-report survey estimate. The only thing really noteworthy about the corn pendent on what happens in the South and Mid-South states this year.figure is that, should it come to pass, it will be the largest area planted And harvest comes early in those areas, so their 1MM additional acresto corn since 1936. Planned soybean acres did come in near the bot- may be quite important for feed supplies in THIS crop year! The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com to contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003. The Daily Livestock Report is published by Steve Meyer & Len Steiner, Inc., Adel, IA and Merrimack, NH.   To subscribe, support or unsubscribe visit www.dailylivestockreport.com. Copyright © 2013  Steve Meyer and Len Steiner, Inc.  All rights reserved.  The Daily Livestock Report is not owned, controlled, endorsed or sold by CME Group Inc. or its affiliates and CME Group Inc. and its affiliates disclaim any and all responsibility for the informa on  contained herein.   CME Group®, CME® and the Globe logo are trademarks of Chicago Mercan le Exchange, Inc.   Disclaimer: The Daily Livestock Report is intended solely for informa on purposes and is not to be construed, under any circumstances, by implica on or otherwise, as an offer to sell or a solicita‐ on to buy or trade any commodi es or securi es whatsoever. Informa on is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or  possible where projec ons of future condi ons are a empted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indica on of future performance.  Futures are a leveraged investment, and because only a percentage of a contract’s value is require to trade, it is possible to lose more than the amount of money ini ally deposited for a futures  posi on. Therefore, traders should only use funds that they can afford to lose without affec ng their lifestyle. And only a por on of those funds should be devoted to any one trade because a  trader cannot expect to profit on every trade.  
  2. 2. Sponsored by Vol. 11, No. 61 / April 2, 2013  Planting Intentions -- Corn Top Twelve Corn States, 2012 2012 2013 Change Pct of 12 (Thousand Acres) (%)Colorado 1420 1250 -170 88Illinois 12800 12200 -600 95Indiana 6250 6100 -150 98Iowa 14200 14200 0 100Kansas 4700 4600 -100 98Michigan 2650 2600 -50 98Minnesota 8750 9000 250 103Missouri 3600 3400 -200 94Nebraska 10000 9900 -100 99North Dakota 3600 4100 500 114Ohio 3900 3950 50 101South Dakota 6150 5900 -250 96Wisconsin 4350 4350 0 100Total 84382 83563 -820 99.0 Planting Intentions -- Corn South and Mid-South States 2012 2013 Change Pct of 12 (Thousand Acres) (%)Alabama 310 330 20 106Arkansas 710 1000 290 141Georgia 345 495 150 143Kentucky 1650 1600 -50 97Louisiana 540 600 60 111Mississippi 820 1050 230 128North Carolina 860 890 30 103South Carolina 330 345 15 105Tennessee 1040 970 -70 93Texas 1850 2100 250 114Total 10467 11393 925 108.8

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