Agribusiness Weekly Update: Commodity traders eye stock reports

Beef
Beef packers lost about $37.50 per head processed last week and the red ink continues to flow, according to Hedgers Edge. To date, beef cow slaughter is down nearly 13% from the drought enhanced 2011 level. The year over year total has been falling in recent weeks with sharply lower beef cow slaughter this summer. Since mid-July beef cow slaughter has been down 20%  from 2011. Beef prices are up more 15% from a year ago, according to USDA.

Hogs & Pork
Hog processors profited about $3.25 per head last week, packer margins were about the same through Tuesday (Oct. 9), according to Hedgers Edge. Hog producers intend to have 2.85 million sows farrow during the September-November 2012 quarter, down 3% from the same period in 2011. Intended farrowings for December-February 2013 are down 1%  to 2.82 million sows, roughly 1% lower than in 2011, according to USDA. As U.S pork supplies will drop about 1.3% next year, prices are expected to rise 5%.

Chicken
Chicken processors are seeing very tight margins as corn and soybean meal prices remain high. Last week processors slaughtered 159.660 million broilers, up 1.43% from the same week in 2011, according to USDA. Wholesale chicken prices for whole birds are up 15% from a year ago at 96 cents per pound. Boneless breast prices at $1.65 per pound are 14% higher than a ago. Leg quarter prices are basically flat at 53 cent per pound wholesale, according to Georgia Dock prices this week.

Table Eggs
Large egg prices ranged from $1.40 to $1.42 last week, up 12 cents from last year. Table egg inventory rose 2% from a year ago with 1.376 million (30 dozen cases) processed, according to the USDA report. 

Grains
Cash corn prices traded Monday (Oct.8) at $7.36 per bushel, rising 24% from a year ago. The December corn futures closed at $7.42 per bushel down 6 cents on Monday, according to the Arkansas Farm Bureau. Corn may see a slight bump in yield in Thursday’s report. If not in this report, in a subsequent one. Stocks are likely to tighten, at least the quarterly stocks report suggested there will be less corn to start the year than originally forecast.

Cash soybean prices closed Monday (Oct. 8) at $15.18 per bushel, up from $11.43 from a year ago. The November contract traded flat at $15.51 on Tuesday, while January beans closed at $15.43, down 30 cents. Soybeans ended the Columbus Day holiday lower as continued talk of improving yields and negative outside markets pressured the market. Harvest continues to advance quickly and is expected to be over 50% when the crop progress report is released tomorrow. While this crop is getting larger, supply will remain tight, limiting downside pressure at some point, according Farm Bureau analysts.
     
Dairy
U.S.Class IV milk prices averaged $16.35 per hundredweight in August, down from $19.04 a year ago, further stressing dairy farms across the country. At current feed costs the break-even for dairy farmers would be roughly $23 per hundredweight.USDA forecast dairy product prices in 2013 will climb 3.5% to 4.5%. Normal grocery price inflation is about 2.8% per year.

Ethanol
Cash ethanol prices traded at a $2.35 per gallon last week, down from $2.50 per gallon a year ago, according to USDA. Ethanol was priced at a $1.36 per gallon discount to gasoline as of Oct. 6.