Home Corn, Beans, Cattle & Hogs Corn, Beans, Cattle & Hogs: Rich Balvanz

Corn, Beans, Cattle & Hogs: Rich Balvanz

To hear Ken’s recap of today’s trade, click here.

MARION, Iowa – Porcine Epidemic Diarrhea Virus continues to support skyrocketing lean hogs futures as apparent calmness on the Crimean peninsula applies downward pressure to corn prices. Today’s analyst is owner of Ag Management Services Rich Balvanz.

Corn

I think a couple of things are going on in the corn market right now.
Chiefly, today, we’re seeing some of the risk premium extracted from the corn market once again, related to the Russian and Ukrainian situation. A week ago, when things were at the peak of tensions, we added quite a bit of value, I think, into corn, and wheat too, for that matter, over concerns that exports from that region might be impeded.
That’s not proving to be the case. The vote over the weekend was seemingly, overwhelmingly, in support of the Crimean territory reverting to Russia. And I think it’s a bit uncertain yet as to what, if any, actions the West will take against Russia in regard to this whole situation, but it seems much calmer now than it did for the past 2 to 3 weeks, so we’re seeing some of that concern that caused additional value into corn, and wheat in particular, coming out of the market.
I think the other thing is that we are seeing improved weather here in the Midwest, a pickup in grain movement, further weakness in cash basis levels for the grains, and that, too, having a little bit of a negative impact on the futures.

Soybeans

The soybean market today has shown itself to be as strong as it continues to be, I guess. You put a little pressure on the bean market, and immediately it seems that it bounces back.
That’s the case, I think here again today. The export inspections numbers for this past week were out today; they were very strong, really no hint there of any major reductions in export potential; cancellations don’t seem to be a big problem; the buyers continue to ship soybeans out, even though we do have talk in market still of the possibility of South American sales being switched to the United States as an alternative location, since we do have strong demand here.
All in all, the bean market just remains very resilient. The demand is strong. Overall, it just is a market that seems to have a life of its own, regardless of what is going on elsewhere.

Cattle

Cattle trade, I think, is a continuation right now of trying to see where the cash market is going to find its feet.
We have seen the overall situation in the cattle market, basically, as one that’s following what’s going on in the cash side of the market, the overall bullish tone that we have been experiencing, I think, remains part of this market, and until we see otherwise, it really is not going to, I don’t think, see a major break in the market, and with the smaller supplies, slaughter levels basically following the smaller supplies that are anticipated, I think think that’s going to continue to be a supportive influence not only in the cattle, but in the hogs as well.

Hogs

The hog market, I think, there’s only one story there right now, and that is that slaughter is down – not by huge amounts, but by small percentages, and the expectations are that that’s going to continue.
The overall cash market on the hogs has been very strong, and it’s just one story that’s out there, regarding this disease-related issue that is reducing numbers, threatening the future supplies of pork available to the market. We have strong demand domestically and in the export side of things for pork, and beef too, for that matter, and it’s just a market that has really taken off; today we’ve seen limit-up moves or very close to limit-up moves in the hogs throughout the morning.

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