March 2013 corn futures are currently trading about .25 above the closing price on January 10 and about .10 below the high reached on January 16. The spot market basis also remains very strong in most markets. The USDA’s Grain Stocks report released on January 11 confirmed that feed and residual use of corn from June through November 2012 had been large, implying that consumption had not been sufficiently rationed following the small crop of 2012.
On-going changes in livestock production are mixed, but may be contributing to a slightly slower pace of feed consumption. The number of cattle in feedlots continues to be well below the level of a year ago as a result of the multi-year liquidation of the cow herd. The number of cattle on feed on January 1, 2013 was 5.6 percent below the inventory of a year earlier, about the same magnitude of decline reported on December 1, 2012. Placements into feedlots during December were only 0.7 percent less than during December 2011. <Read More>
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