Daily livestock report apr 09 2013


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Daily livestock report apr 09 2013

  1. 1. Sponsored by Vol. 11, No. 66 / April 9, 2013 Following a grain stocks report that was significantly Corn Supply & Use, USDA & April Trade Estimatesdifferent that what trade was expecting, USDA will update to-morrow, April 10, its grain and meat protein balance 2011/12 2012/13 Projection Y/Ysheets. A poll of market analysts conducted by Down Jones indi- USDA USDA USDA April Trade % Changecated that on average analysts expect USDA to revise higher its Estimate Feb Est Mar Est Estimateestimates of corn ending stocks for the 2012/13 marketing year. million acresThe March 1 quarterly stocks survey pegged March 1 corn stocks Planted 91.9 97.2 97.2 97.2 6%at 5.4 billion bushels, almost 400 million bushels larger than Harvested 84.0 87.4 87.4 87.4 4%what trade was expecting coming into the report. With the sup-ply side of the balance sheet known (see table), it will be interest- bushelsing to see how USDA will change its estimates of corn exports, Yield 147.2 123.4 123.4 123.4 -16%ethanol use and feed use for the current marketing year. Given million bushelsthe average of trade estimates per Dow Jones at 824 million Beginning stocks 1,128 989 989 989 -12%bushels, the stocks/use ratio jumps to 7.4% compared to 5.6% inthe March report. Production 12,360 10,780 10,780 10,780 -13% How could the three main demand categories be impact- Imports 29 100 125 125 331%ed in the April update? Export numbers were lowered signifi- Supply, total 13,517 11,869 11,894 11,894cantly in the March report, projected to be down 46.5% from ayear ago. Little has changed in corn export volume in recent Feed and residual 4,548 4,450 4,550weeks but it is likely that the lower prices will increase the quan- Ethanol for fuel 5,011 4,500 4,500tity demanded in world markets. US corn was trading at a signif- Food, seed, other 1,426 1,387 1,387icant spread to Argentinean corn in the second half of 2012 andearly 2013. The spread has for the most part disappeared. Com- Domestic use, total 10,985 10,337 10,437bined Argentina and Brazil corn exports in 2012/13 are currently Exports 1,543 900 825projected to be 38 million MT, compared to a little over 20 millionMT out of the US. The main challenge for South America at this Use, total 12,527 11,237 11,262 11,070 Avg.point is transportation, with wire stories this week noting Brazil Ending stocks 989 632 632 824 Estimatemay import Argentine corn to its Northeast areas even as otherparts of the country have ample supplies. The evolving situation Stocks/Use 7.9% 5.6% 5.6% 7.4%in China with bird flu continues to be a concern in the overall the margin but chances are USDA will leave food, seed and otherpicture of global feed demand, with trade keeping a close eye on use unchanged.the possibility that a full blown epidemic could lead to significantculling, a net reduction in feed demand and longer term impact Even if corn exports are revised modestly lower, the bal-on chicken and pork demand in one of the fastest growing mar- ance sheet implies that the feed and residual numbers willkets for meat protein in the planet. The February corn export likely be revised lower. If the trade estimate of 824 millionnumbers down 58% from a year ago and chances are USDA may bushels is correct, and considering our discussion of exports andlower the final corn export number to 800 million bushels. ethanol above, feed and residual for 2012/13 may be lowered by about 170 million bushels to about 4.380 billion bushels. This Ethanol demand will likely be left unchanged. Eth- would represent a feed/residual decline of 3.7% from the previousanol production has increased in recent weeks following lower marketing year. The March 1 grain stocks numbers implied thatcorn prices and improving margins. Daily ethanol output which in the first half of the marketing year feed use was down aboutwas running about 15% below year ago levels in January and 6%. While there are fewer cattle on feed, the hog and poultryFebruary now is down 8% from last year. USDA will likely want numbers are larger than a year ago and they are increasing.to see a few more weeks of increasing ethanol output before mak- Broiler egg sets up 1.1% from a year ago. Feed use rationing wasing any meaningful changes to the ethanol demand part of the all the talk after the March 1 WASDE report. A month later, itbalance sheet. Other industrial use numbers may be changed at looks like the job will be a little easier. 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. Thank you for your support!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 © 2013Steve 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 oncontained 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 orpossible 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 futuresposi 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 atrader cannot expect to profit on every trade.