Grains and oilseeds end the week on a strong note

Soybeans were sharply higher, making new six and a half month highs on speculative and technical buying. Beans are keeping very close watch on weather impact for soybeans in the U.S. Delta and oilseeds in Canada and China. Also, the near term supply remains very tight and demand continues to look solid, so it looks like price rationing is in effect. In any case, we’re headed into the critical phase of development for U.S. soybeans, so weather will continue to be the big mover. Soybean meal was higher on the sentiment that feed demand will rise due to world wheat quality issues and oil was higher following the lead of crude oil and beans. According to Macquarie Group, U.S. soybeans could average 42.9 bushels per acre, in-line with USDA’s July guess, but add it’s still too early to tell.

Corn hit new two week highs on short covering, technical buying and spillover from beans and wheat. Past that, there was no real fresh news one way or the other. Traders are keeping an eye on the hot, dry forecasts for early August across most of the Midwest and in any event, corn doesn’t want to get left behind, primarily due to the feed connection with wheat. However, with most of the corn crop through the pollination phase, weather’s a bigger worry for beans than it is for corn. Ethanol futures were higher. Macquarie Group, via Dow Jones Newswires, expects the final U.S. corn yield to be 163.1 bushels per acre, compared to USDA’s July guess of 163.5 bushels per acre.

The wheat complex was sharply higher on fund and technical buying. There are continued crop quality concerns for Canada, Eastern Europe and the Black Sea region. Chicago outpaced Kansas City and Minneapolis as that type is used for feed and a lot of the crop loss is feed wheat. In fact, according to the CME Group, nearby Chicago gained almost 42% during July, the largest percentage gain for a front month contract since 1951. There’s a lot of talk in the market that either Russia or Ukraine, or both, will severely restrict or even temporarily halt exports due to the tight supply, with Ukrainian firm Landkom, via Dow Jones Newswires, stating it expects Kiev to increase intervention purchases to keep domestic supplies at acceptable levels and the Ukraine Agrarian Federation pegging Russia’s exports at 9 million to 10 million tons, compared to SovEcon’s guess of 11 million and the IGC’s projection of 13.4 million. According to Russia’s Ag Ministry, 33% of that crop is harvested, with yield behind last year and the pace faster than average due to drought. German firm Toepfer has Europe’s wheat crop at 126 million to 129 million and the U.N.’s Food and Agriculture Organization is expected to make a big reduction to its production estimate. Japan bought 141,567 tons of wheat (70,101 tons U.S. dark northern spring, 36,126 tons Canadian western red spring and 35,340 tons Australian standard white) and Egypt issued a tender for 120,000 tons of wheat, mostly from the U.S.

Some feedlot cattle carried over into next week

Except for some clean up business in Texas the cash cattle trade was quiet on Friday. Trade volume totals were moderate at best with only 104, 207 negotiated sales confirmed through Friday morning. There appears to be a willingness to carry cattle over on the part of producers, and wholesale nervousness on the part of packers. Slaughter cattle traded 2.00 lower at on a live basis this week at mostly 93.00, and dressed at 147.00 to 149.00 mostly 3.00 lower.  The weekly slaughter was estimated at 654,000 head, 12,000 less than last week, but 15,000 more than last year. Boxed beef cutout values were weak to lower on light to moderate demand and offerings. Choice boxed beef was down 1.56 at 151.83, and select was .72 lower at 145.02.

Chicago Mercantile Exchange live cattle contracts settled 55 to 112 higher on short covering and fund buying. The shock of this week’s lower cattle trade worked its way through the futures market, with traders now focusing on potential market support early next week. Higher corn prices were once again supportive to the deferred issues; more expensive inputs may keep feedlot operators from increasing their herds. August settled .80 higher at 92.65, and October was up 1.12 at 94.60.

Feeder cattle ended the session mostly higher on support from the live pit and short covering. Gains were dampened some by the run-up in corn with the front months flat to lower and the deferred issues showing the gains. August settled unchanged at 113.75, and September was down .07 at 114.20.

Feeder cattle receipts at Missouri Auctions this week totaled 22,041 head. Compared to last week, feeder steers sold mostly steady, heifers weighing less than 650 pounds were 2.00 lower to 2.00 higher, heifers over 650 pounds steady to 2.00 higher. Feeder steers medium and large 1; 568 head averaging 577 pounds traded at 126.33 per hundredweight. 366 heifers averaging 573 pounds averaged 114.25.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.01 lower at 81.69 on a carcass basis, the West was down 1.03 at 81.49, and the east was 1.51 lower at 83.15. Missouri direct base carcass meat price closed steady from 74.00 to 75.00. The weekly hogs slaughter was estimated at 1,949,000 head 6,000 less than last week, and down 159,000 from last year. Hog supplies appear tight and three plants were down on Friday with three more scheduled to be dark on Monday. Pork trading was very slow, with light to moderate demand and light offerings. Pork carcass cutout value closed .44 lower at 89.82.

Lean hogs settled 30 to 97 points higher with the back months benefitting from the higher grain prices, which may discourage increases in production.  Tighter hog numbers were also supportive to the market. August settled .97 higher at 85.82, and October was up .95 at 79.02.

Pork bellies were unquoted.

Closing Grain and Livestock Futures: July 30, 2010

September corn closed at $3.92 and 3/4, up 13 and 1/2 cents
August soybeans closed at $10.52 and 1/2, up 25 and 3/4 cents
August soybean meal closed at $310.90, up $5.50
August soybean oil closed at 39.83, up 56 points
September wheat closed at $6.61 and 1/2, up 34 cents
August live cattle closed at $92.65, up 80 cents
August lean hogs closed at $85.82, up 97 cents
September crude oil closed at $78.95, up 59 cents
December cotton closed at 78.76, up 185 points
August Class III milk closed at $14.94, up 2 cents
Dow Jones Industrial Average: 10,465.94, down 1.22 points

Friday midday cash livestock markets

A moderate cattle trade developed yesterday in most areas with live sales from 92.50 to 93.00, 2.00 to 2.50 lower than last week. Dressed sales in the North ranged from 147.00 to 148.00, 2.00 to 3.00 lower than last week. We could see more sales today with asking prices on the cattle still on the show lists around 94.00 plus in the South and 149.00 to 150.00 in the North. Choice boxed beef is down 1.88 at 151.51, and select is .49 lower at 145.25.

Feeder cattle receipts at Missouri Auctions this week totaled 22,041 head. Compared to last week, feeder steers sold mostly steady, heifers weighing less than 650 pounds were 2.00 lower to 2.00 higher, heifers over 650 pounds steady to 2.00 higher. Feeder steers medium and large 1; 568 head averaging 577 pounds traded at 126.33 per hundredweight. 366 heifers averaging 573 pounds averaged 114.25.

Barrows and gilts in the Iowa/Minnesota direct trade opened 3.13 lower at 79.57 on a carcass basis, the West was down 2.76 at 79.76, and the East is 2.44 lower at 82.22. Missouri direct base carcass meat price is steady at 74.00 to 75.00. Today’s kill is predicted to be cut to 365,000 head with the Saturday slaughter at only 15,000 head.

For updated market information throughout the day tune to your local Brownfield radio station affiliate.

Wheat continues to take the lead

Soybeans were higher on technical and speculative buying, along with spillover from wheat. Overall, the supply is tight and demand continues to look solid with weekly export sales towards the high end of estimates; old crop shipments were slow. Near term crop weather does look generally good but with the calendar turning towards August, traders are willing to take a step back and put some weather premium in due to the uncertainty. Soybean meal and oil were higher following the lead of soybeans. China bought 2009/10 tons of U.S. soybean oil, continuing their at least near term shift to U.S. supplies because of Beijing’s trade dispute with Argentina.

Corn was higher on technical buying and spillover from wheat. Also, even while the crop does look good overall, there are concerns about yield and quality. Forecasts for the coming week do have a hot, dry pattern and parts of the Eastern and Southern Cornbelt definitely need rain, but most traders took a wait and see attitude. Ethanol futures were higher. Ahead of the open, Mexico picked up 146,000 tons of U.S. corn (30,000 tons 2009/10 and 116,000 tons 2010/11). According to the International Grains Council, the U.S. is expected to see increases in exports of both corn and feed wheat to make up for global weather problems impacting wheat production.

The wheat complex was higher on fund buying and short covering. Weekly export sales were solid, including sales to Egypt, and the trade continues to watch weather and its impact on crops in Russia and the Black Sea region. That said – at least some of that is priced in right now and traders continue to keep an eye on U.S. and world harvest numbers. The International Grains Council has the global crop at 651 million tons, down from earlier projections, but still the third largest in history. According to the Wheat Quality Council’s spring crop tour, hard red spring yield is currently calculated at 46 bushels per acre and durum is seen at 38.4 bushels per acre, up from last year for both types. European wheat did see some profit taking after an earlier rise to two year highs with November and London Paris both down .8% on the day. Japan’s Ag Ministry issued a tender for 141,567 tons of wheat (70,101 tons U.S. dark northern spring, 36,126 tons Canadian western red spring and 35,340 tons Australian standard white).

Cash cattle and feeder and live contracts lower Thursday

USDA Mandatory reported cattle trading was light to moderate on light demand in the central and western areas of Nebraska on Thursday along with Kansas. Compared to Wednesday Nebraska sales were mostly steady at 148.00 dressed and 93.00 live. Compared to last week dressed sales were 2.00 to 3.00 lower and live trades were 1.00 lower. In Kansas live sales were 1.00 to 2.00 lower at 93.00, and dressed sales were 3.00 lower at 148.00. Trading was light in Texas, Oklahoma and New Mexico on light to moderate demand. Live sales trended 2.00 lower than last week at 93.00. Thursday’s cattle slaughter is estimated at 129,000, 1,000 less than last week, but 1,000 more than last year. Boxed beef cutout values were lower on light to moderate demand and light to moderate offerings. Choice boxed beef closed 1.31 lower at 153.49, and select was down .60 at 145.74.

Chicago Mercantile Exchange live cattle contracts settled 15 to 92 points lower after starting out the session moderately higher. By midday futures were pressured by the developing cash trade as well as weakness in the boxed beef values. Additional pressure came from the stock market s drop from early session highs. August settled .92 lower at 91.85, and October was down .72 at 93.47.

Feeder cattle finished the session 30 to 80 points lower on gains in the grain markets along with the inability for the live contracts to hold early gains. August settled .80 lower at 113.72, and September was down .57 at 114.27.

Feeder cattle receipts at the Ogallala Livestock Auction in Nebraska totaled 1,000 head. No comparison to last week, due to no feeder cattle sale. Steers accounted for 92% of the run, with weights over 600 pounds 99% of the offering.  Feeder steers medium and large 1; 276 head averaging 905 pounds traded at 110.03. Just a few heifers traded, those weighing 804 pounds brought 105.93.

Barrows and gilts in the Iowa/Minnesota direct trade closed 2.61 lower at 81.67 on a carcass basis, the West was down 1.98 at 81.51, and the East was up 3.73 at 84.80. Missouri direct base carcass meat price closed steady from 74.00 to 75.00. Thursday’s hog kill was estimated at 401,000 head, 2,000 more than last week, and 15,000 less than last year. Iowa market hogs last week averaged 268.4 pounds, 1.1 pounds heavier than the previous week and 2.1 pounds higher than 2009. Slower chain speed this month may be compromising the current status of the finishing floors according to DTN. Pork trading was slow to moderate, with light to moderate demand and offerings. Por carcass cutout value was up .03 at 89.38.

Lean hog settled unchanged to 147 points higher on Wednesday’s sharply higher cash market along with impressive gains over the last week in the pork carcass value. Several contracts posted new contract highs. August was up the most settling at 84.85 up 1.47, and October was 1.12 higher at 78.07.

Pork bellies were unquoted.

CLosing Grain and Livestock Futures: July 29, 2010

September corn closed at $3.79 and 1/4, up 3 cents
August soybeans closed at $10.26 and 3/4, up 16 and 1/4 cents
August soybean meal closed at $305.40, up $3.70
August soybean oil closed at 39.27, up 43 points
September wheat closed at $6.27 and 1/2, up 10 cents
August live cattle closed at $91.85, down 92 cents
August lean hogs closed at $84.85, up $1.47
September crude oil closed at $78.36, up $1.37
December cotton closed at 76.91, up 60 points
August Class III milk closed at $14.92, up 3 cents
Dow Jones Industrial Average: 10,467.16, down 30.72 points

Thursday midday cash livestock prices

So far on Thursday there is very little activity in the feedlot cattle trade with just a few bids of 93.00 live and 148.00 dressed in the North reported. Yesterday brought moderate movement in Eastern Nebraska and Iowa at around 147.00 to 150.00 dressed 3.00 lower and 93.00 live, 2.00 lower. More trade is expected to develop in those areas today. The South remained at a standstill yesterday and seems slow to start today. Asking prices are around 96.00 plus in the South and 149.00 plus in the North. Boxed beef cutout values are lower, with the choice down .92 at 153.78, and select down .43 at 145.91.

Feeder cattle receipts at the Ogallala Livestock Auction in Nebraska totaled 1,000 head. No comparison to last week, due to no feeder cattle sale. Steers accounted for 92% of the run, with weights over 600 pounds 99% of the offering.  Feeder steers medium and large 1; 276 head averaging 905 pounds traded at 110.03. Just a few heifers traded, those weighing 804 pounds brought 105.93.

Barrows and gilts in the Iowa/Minnesota direct trade opened 3.01 lower on very light receipts at 81.17 on a carcass basis, the West is down 2.32 at 81.17, and the East is up 2.72 at 85.82. Missouri direct base carcass meat price is steady from 74.00 to 75.00.Iowa market hogs last week averaged 268.4 pounds, 1.1 pounds heavier than the previous week and 2.1 percent higher than 2009. Slower chain speed this month may be compromising the current status of the finishing floors according to DTN.

More market information is available throughout the day on your local Brownfield affiliate radio station.

Another slow week for export shipments

It was a mixed week for grain and oilseed export sales. USDA reports soybean and wheat exports for the week ending July 22 were above pre-report projections while corn was within estimates and soybean meal and oil were below all expectations. Physical shipments of corn, soybeans and wheat were all less than what’s needed weekly to meet USDA projections for the current marketing year.

Wheat came out at 919,900 tons (33.8 million bushels), up sharply from both the week ending July 21 and the four week average. The leading buyer was Japan at 161,600 tons. At this point in the 2010/11 marketing year, wheat sales are 308.5 million bushels, compared to 231.1 million in 2009/10.

Corn was reported at 432,300 tons (17.0 million bushels), down 30% from the week prior and 29% lower than the four week average. Japan was the top purchaser at 265,200 tons, while unknown destinations canceled on 301,800 tons. Nearing the end of the 2009/10 marketing year, corn sales are 2.005 billion bushels, compared to 1.846 billion late in 2008/09. Sales of 528,100 tons (20.8 million bushels) for 2010/11 delivery were mostly to unknown destinations (209,500 tons).

Soybeans were pegged at 339,000 tons (12.5 million bushels), a significant increase from the week before and 4% higher than the four week average. China was the leading buyer at 235,000 tons. So far this marketing year, soybean sales are 1.494 billion bushels, compared to 1.287 billion this time last year. Sales of 1,144,200 tons (42.0 million bushels) for 2010/11 delivery were mainly to China (459,000 tons).

Soybean meal was reported at 23,800 tons, 76% less than the previous week and 72% below the four week average. Mexico was the top purchaser at 9,400 tons but unknown destinations canceled on 10,600 tons. For the marketing year to date, soybean meal sales are 9,242,100 tons, compared to 7,043,300 a year ago. Sales of 43,000 tons for 2010/11 delivery were primarily to Canada (37,300 tons).

Soybean oil came out at 3,200 tons, up from the week before but down 50% from the four week average. China was the biggest buyer at 2,500 tons. 2009/10 soybean oil sales are 1,365,100 tons, compared to 819,300 in 2008/09. Sales of 4,300 tons for 2010/11 delivery were to Mexico.

Net beef sales totaled 12,800 tons, 23% lower than the prior week but 8% higher than the four week average. The reported buyers were Mexico (5,600 tons), South Korea (1,700 tons), Canada (1,100 tons), Hong Kong (1,100 tons) and Taiwan (1,100 tons).

Wheat leads corn and soybeans higher

Soybeans were higher on technical and speculative buying, along with spillover from wheat. Weather forecasts for early August now look a little hotter, especially in the already very dry Delta and we do still have a way to go in the growing season, keeping traders very uncertain. Also, China bought another 120,000 tons of new crop U.S. beans ahead of the open. China’s Ministry of Commerce projects July imports at 5.594 million tons and sees August at 3.884 million tons. Soybean meal and oil were higher, following the lead of beans. There was additional support in meal from talk of increased feed demand while gains in oil were kept in check by product spread trade. Weekly USDA export sales numbers are out Thursday at 7:30 AM Central. Soybeans are pegged at 700,000 to 1.25 million tons, meal is seen at 75,000 to 175,000 tons and oil is placed at 30,000 to 60,000 tons.

Corn was higher on technical buying, short covering and spillover from wheat. Contracts were due for a bounce after four days of losses and traders want to make sure corn outpaces wheat in global feed market share. At least to some extent, gains were limited by forecasts for generally non-threatening growing weather over the next 6 to 10 days. Ethanol futures were higher. Weekly U.S. corn sales are expected to be between 750,000 and 1.2 million tons.

The wheat complex hit new thirteen month highs on fund buying and short covering. The complex followed the lead of Europe, where contracts also hit new multi-month highs on concerns over weather impacting production in Russia, the Black Sea region and Kazakhstan. Also, it looks as though the drought may edge into eastern Ukraine, another huge world source of feed wheat. Still, it is worth noting that stateside, the fundamentals remain bearish and early spring harvest results look good. Weekly U.S. wheat sales are estimated at 250,000 to 450,000 tons.

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