Daily livestock report mar 26 2013

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  • 1. Sponsored by Vol. 11, No. 57 / March 26, 2013 USDA will release a number of market moving reports on March 1 Grain Stocks, Analyst EstimatesThursday. In recent years, the March “Grain Stocks’ report has Source: Reuters Analyst Surveybeen particularly interesting as trade has had trouble accountingfor the pace of feed use during the Dec - Feb period. On average USDA Average Range of Estimates USDA USDAanalysts expect grain stocks as of March 1 to be 5.013 billion bush- Actual Estimate Dec. 1, 2012 Mar. 1, 2012els. This implies a disappearance of about 3.070 billion bushelsfor the quarter. Corn export demand during the quarter was like- Corn ? 5.013 4.885 - 5.248 8.030 6.023ly quite dismal probably around 175 million bushels. Ethanolproduction also was down significantly during the quarter, proba- Soybeans ? 0.935 0.905 - 0.984 1.966 1.374bly around 13% or so. Considering the decline in both ethanol and Wheat ? 1.177 1.055 - 1.238 1.660 1.199export demand, the average trade estimate of ending stocks im-plies that corn and residual during the Dec-Feb quarter probablywas around 1.47 billion bushels, about 4.6% below the same quar- March 1 Planting Intentions for 2013 Crops, Analyst Estimatester a year ago (we have a 53 million bu. corn import number fac- Source: Reuters Analyst Surveytored in). The survey will confirm whether this expectation iswarranted. Feedlot inventories have been down about 6% from a USDA Average Range of Estimates USDA USDAyear ago during the past quarter. Also, the increased use of more Actual Estimate Feb. Outlook 2012 Plantedefficient feed additives has meant better conversion rates andheavier animals. However, the number of broilers coming to mar- Corn ? 97.252 95.7 - 98.5 96.500 97.155ket in the last quarter was higher than a year ago while the num-ber of hogs was about the same. The 6% decline in feedlot inven- Soybeans ? 78.394 77.0 - 79.7 77.500 77.198tories likely is not enough to account for the 4.6% reduction in feeduse implied in the quarterly corn balance sheet. Some wheat feed- Wheat ? 56.442 55.6 - 57.3 56.000 55.736ing certainly took place but again, there is plenty of uncertaintycoming into the report as higher than expected feeding rates implymore rationing will be required in the next two quarters. ably as much as 20-25% of the hard-red winter wheat acres (29.1 million) will be abandoned. Soybean plantings also are expected While the grain stocks survey will impact mostly old crop to increase 1.5%. Combined corn, wheat and soybean acres thiscorn and soybeans, the planting intentions survey affects deferred spring are expected to be up about 2 million acres from a year ago.grain futures and implicitly livestock and poultry production.USDA indicated in the February outlook forum that it expects The ‘Prospective Plantings’ report will provide one of thefarmers to plant about 96.5 million acres with corn. Private ana- first indications as to the kind of corn supply and pricing that welysts, however, expect even more acres to go into production. should expect for the 2013-14 marketing year. In its FebruarySome areas of the country that normally are not big corn produc- outlook meetings, USDA used a trend yield of 163.5 million bush-ers are expected to plant more corn and the marginal increases els for the upcoming year. With 97.3 million corn acres planted,are expected to push total planted acres at near 97.3 million acres this kind of yield would cause corn production next fall to jump by(average of analysts). If this number ends up being correct, it about 3.9 billion bushels (+36%). That kind of an increase couldwould represent the largest number of corn acres planted since push corn prices well below $5 per bushel, and likely below $4 per1936 but only slightly higher than the acres planted last year. As bushel. But it is a big if at this moment and a possibility thatlast year showed, planting a lot of acres does not guarantee a rec- many in the market prefer not to bet on. But even a 10 bushelord crop but, if weather conditions permit, the big plantings departure from trend (153 bu. acre) would still yield a gain of al-should help improve the corn balance sheet. As the lower table most 3 billion bushels (+27%). Some of the extra supply wouldabove shows, trade expects year over year planting increases in all likely quickly be absorbed by both ethanol and export markets.three major crops. Wheat plantings, which includes both winter The latter is especially interested in more US corn. Still, thatwheat planted last fall and spring wheat to be planted this spring, kind of increase would most certainly push corn prices back in theare expected to be up by 1.3% from a year ago. However, the ex- $5 per bushel territory. The only thing needed now is for somepectation is that a significant number of winter wheat acres, prob- good growing weather to show up. 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.