Markets Rise After Bernanke Urges Policymakers, Corn Prices Surge

Strategic Insights -

Markets rallied broadly after a Federal Reserve announcement, with corn prices adding to their gains this week, leading to a surge in cattle futures. Federal Reserve Chairman Ben Bernanke urged policymakers to jumpstart the economy, echoing the sentiment of investors. As corn prices soared, cattle futures rose sharply, with CME cattle for August delivery increasing by 0.45 cent, or 0.5%, to $1.143 a pound. The Dow Jones Industrial Average surged 130 points to 11,279 points, further solidifying the market's positive sentiment.

Key Takeaways:

  • Cattle futures rose sharply due to the surge in corn prices, with CME cattle for August delivery increasing by 0.45 cent, or 0.5%, to $1.143 a pound.
  • The rally in markets was attributed to Federal Reserve Chairman Ben Bernanke's announcement urging policymakers to jumpstart the economy.
  • Corn prices surged 3.2% to $7.67 a bushel, with December corn futures finishing the week up nearly 6%.
  • Higher corn prices are poised to significantly impact cattle futures for winter and spring, with potential rationing of feed amounts and lighter animals being slaughtered.
  • The USDA cattle-on-feed report revealed the effects of a severe drought in the South, resulting in higher near-term supplies.
  • Cash cattle markets were quiet on Friday, following the majority of this week's trading on Wednesday and additional sales in Nebraska on Thursday.
  • The cash cattle markets in Texas/Western Oklahoma reported trading volume at about 14,000 head at mostly $1.125 a pound live.
  • The HedgersEdge packer margin index was plus $72.45 a head, compared with $69.35 the previous day, indicating packer returns on cattle slaughtered and processed.
  • Lean hog futures were mixed on Friday, rising 0.12 cent, or 0.1%, to $87.1 cents a pound, despite the rally in stocks and commodities.
  • The USDA estimated Friday's slaughter at 390,000 head, with 62,000 on Saturday, and pegged the week's total at 2.114 million, down 0.3% from a year ago.

Statistics:

  • Corn prices surged 3.2% to $7.67 a bushel.
  • December corn futures rose to finish the week up nearly 6%.
  • CME cattle for August delivery rose by 0.45 cent, or 0.5%, to $1.143 a pound.
  • The Dow Jones Industrial Average surged 130 points to 11,279 points.
  • Lean hog futures rose 0.12 cent, or 0.1%, to $87.1 cents a pound.
  • The HedgersEdge packer margin index was plus $72.45 a head.
  • The USDA estimated Friday's slaughter at 390,000 head.
  • The week's total slaughter was pegged at 2.114 million, down 0.3% from a year ago.

Sources:

  • Dow Jones Commodities News via Comtex
  • Marshall Eckblad and Curt Thacker, Dow Jones Newswires
  • Dow Jones Newswires, August 26, 2011.