A34—Lancaster Farming, Saturday, June 30,1984
Look into Futures
By Peter D. Forbes
THOMSON MCKINNON SECURITIES INC.
LIVESTOCK
In the pork complex, analysts
are becoming concerned that
farmers are temporarily
withholding hogs from the market.
That attributes this to two things:
(1) That the recent hogs & pigs
report, which has depressed
prices, was a dissapointment to
farmers and they are reluctant to
sell at these levels. (2) Due to
heavy involvement in grain
planting and wheat harvesting,
many farmers are simply not
finding the time to send animals to
slaughter.
Recent slaughter numbers have
fallen below 300,000, but last week
the number dropped below 275,000.
Analysts believe that such a drop
in markets should not be occurring
this rapidly. Average weight for
hogs have been about 244 lbs. (2
lbs. above a year ago). Some
sources indicate that slaughter
weights are coming down again.
Also, with the recent hot weather
and indications that feed lots are
becoming current, market weights
should decline.
The fear in the market is that
once the withheld hogs do come to
market, prices could be depressed
greatly. There is a sharp out
movement of pork bellies from
cold storage. Last week 2.3 million
lbs. were mvoed out compared to
276,000 lbs. the week before.
Despite the continued large
amounts in storage, continued out
movement will be a great pressure
to the pork product market. There
is some talk that cash bellies could
decline to $6l-$62 CWT in the two
weeks. With the July high contract
coming into the delivery period,
the whole pork complex could be
under pressure.
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The cattle market seems to be
finding new life again. After
touching |62, August cattle appear
ready to make an attempt at
recent highs above $66. Trading at
the Mercantile Exchange has
become more lively and can in
crease buying from both com
mercial and commission houses
has been evident. You may
remember that in the recent cattle,
downtown rallies have shown very
little follow through interest. While
the market is gaining momentum
to test the recent highs, we are
going to need some productive
fundamental news to provide the
market with new amunition. Steer
beet has been trading between 99
cents and $l.OO. Cash cattle prices
are still trading at $66 on the heavy
choice steers. These prices need to
move higher in order to give the
back months in the cattle market a
reason to rally.
Combelt and Plaines feedlots
seem to be current as far as heavy
choice steers are concerned. There
will be a 7 and 13 state cattle on
feed report released July 18, which
is expected to be positive for
prices. There are indications that
these bullish expectations are
already getting into the market,
the futures seem to be easing the
discount that the market is
maintaining to the cash prices.
This most likely will make the
market much more sensitive to
cash developments in the next 3
weeks.
The big news this week was the
USDA average planting report
released Thursday, June 28. The
results of the report are as follows:
jwr
GRAIN
ms
Crop Actual Eipectation 84 Vs 83
(Million
Acres)
Corn 79 9 815 +33%
Soybean 68 0 68 0 + 8%
Wheat 79 5 4%
The preliminary reaction to this
report will be neutral for wheat,
bullish for com, and neutral to
slightly bullish for soybean. Some
market analysts believe that the
soybean acres number does
significantly less since the price
ratio of soybeans to corn during the
planting season did not favor a
heavy shift into soybeans.
However, since the government
has imposed a $50,000 per celling
on com deficiency payments (the
equivalent of a 48 cents per bushel
maximum payment on 1,000 acres
in com), these farmers must likely
put their additional acres into
soybean.
Nevertheless, the com market is
expected to firm up this week and
perhaps make attempts at the
recent contract highs made last
week. Soybean could rally in
sympathy with the com, however,
the market will soon begin to trade
again strictly according to weather
forecasts.
The most recent 6-10 day
forecast issued by the National
Weather Service indicates that
temperatures are moderate and
those areas that up to now have
received below average rainfall
(Eastern Cornbelt & Southeast)
should be returning to more nor
mal precipitation patterns. Also,
the Eastern Cornbelt, which has
expected extensive flooding and
the loss of 1.5 million acres of corn,
is expected to have less rainfall in
the few weeks.
All of this weather information
points to the fact that in general
the grain crops have gone in fairly
well this year and that
seasonal pressure should be ex
pected over the near term. Market
optimists continually point to the
prospects of a hot July and August
during crop pollination then as a
reason for a big summer release in
prices. Clearly the weather is all
important right now.
Wheat has shown signs of im
provement in price despite the
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heavy harvest pressure. Roomers
beginning to circulate again that
China may be re-entering the
wheat market. So far there is no
clear indication as what the
Gain gets Corn Growers post
INDIANAPOLIS, Ind. - The
National Corn Growers
Association has appointed Jeffrey
W. Gain as its chief executive
officer, to head the new St. Louis
headquarters which is to open later
this year.
The NCGA is a farmer-backed
commodity organization made up
of 16 affiliated state groups, with
members in 47 states. The
association speaks for ap
proximately 90 percent of the
nation’s com production.
Gain, 44, served as executive
director of the St. Louis-based
American Soybean Association
prior to joining the NCGA. His
duties will include administration
of the National Com Development
Foundation which allocates funds
from state checkoff boards to
various national projects.
The NCGA’s announcement of
Farmer Boy Ag has been appointed distributors for the
Pigiplan, range of hog buildings. Pigiplan originated from
England, the forefront of European technology in the field of
farm weaning and developed the world famous “Pigibox"
nursery buildings which allow pigs to be weaned at 14 days.
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SPECIAL HO-DOWN
publics’ intentions are, but some
sources indicate that the Chinese
are trying to btiy wheat through
private traders.
Gain’s hiring was made by NCGA
president John Stevenson of Cir
cleville, Ohio. “Jeff has an ex
cellent background of ad
ministrative expertise, a lifetime
of experience working with far
mers and an impeccable
reputation in the agri-business
community,” Stevenson said. “His
abilities were recognized earlier in
careers with the Illinois Farm
Bureau and, most recently, with
the American Soybean
Association.”
In making the announcement,
Stevenson noted that NCGA
representation in Washington D.C.
will continue to be handled by
Michael Hall, NCGA Washington
representative.
Announcement of Gain’s hiring
was made in Indianapolis on June
21. Gain, his wife and two
daughters reside in St. Louis.
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