Another good week in the dairy markets

Cash cheese and butter were higher on the Chicago Mercantile Exchange on Friday along with Class III futures.  For the week, cash cheese barrels up 8.5 cents, blocks up 6.75 cents, cash butter down 6.75 cents, nonfat dry milk up 2.5 cents.  September Class III futures increased $1.42, October gained 43 cents and November up 13 cents.

While the price of butter declined for the week, it is still trading in near-record-high territory.  Spot loads are hard to come by and garnering 3.5 to 6 cents over market.  More milk is going into bottling as the pipeline is being filled for back-to-school; that means more cream should be available.

Dairy Market News reports milk production across the country is trending lower but still above year-ago levels thanks to increased cow numbers.  Favorable weather in the Midwest and Northeast is supporting production but heat is taking its toll in California, Arizona and the Pacific Northwest.

3.8 billion pounds of packaged fluid milk products were estimated to have been sold in the U.S. in June, down 2.2 percent from June of 2013.  Conventional fluid milk sales were 2.9 percent lower while organic fluid milk sales were up 11.3 percent from a year ago.

Milk production is declining seasonally in Western Europe but still above year-ago levels.  For the first six months of this year, milk production in the 28 European Union states was up 5.1 percent from the January-through-June period of 2013.  Italian production was 2.8 percent higher, Germany up 3.6 percent, France increased 6.2 percent, Ireland up 7.3 percent, Belgium increased 8.1 percent and the UK was 10.7 percent higher.  Only Spain and Greece were below last year.  In Eastern Europe: Polish production is 7.6 percent higher, Lithuania increased 8.7 percent, Estonia up 8.9 percent and Latvia’s production is up 12.8 percent.  The Czech Republic saw a 0.7 percent decline from a year ago.

Quiet, mixed session ahead of Labor Day weekend

Soybeans were mixed on commercial buying against speculative selling. Unknown bought 123,000 tons of new crop U.S. and overall demand remains strong. Still, the longer term fundamentals are bearish and traders expect a record crop. Soybean meal was higher and bean oil was lower on the adjustment of old crop/new crop spreads. First notice day deliveries were largely as expected.

Corn was lower on fund and technical selling. Traders continue to watch the weather, with more scattered rainfall expected over the next few days in key growing areas. Corn’s also looking at bearish fundamentals and expecting a record crop. Ethanol futures were higher. The 2014/15 marketing year for corn and soybeans starts September 1.

The wheat complex was lower on fund and technical selling. The trade’s watching the situation in Ukraine and the domestic spring wheat harvest delays. Past that – there was no real fresh supportive news and world fundamentals are bearish. First notice day deliveries on large on Kansas City, relatively light on Chicago and small on Minneapolis. South Korea bought 63,000 tons of optional origin feed wheat.

A light cattle trade at higher prices on Friday

USDA Mandatory reported cattle trading was light in Kansas on moderate demand, compared to the previous week, live sales were 2.00 to 3.00 higher at 155.00. Trading was light in Nebraska on moderate to good demand. Compared to a week ago, a few live sales traded steady to firm at 155.00, and dressed sales 3.00 higher at 245.00. Trading was light in Iowa on moderate demand, dressed sales were 1.00 higher at 243.00. The weekly cattle slaughter was estimated at 584,000 head, 6,000 less than last week, and 49,000 head smaller than 2013.

Boxed beef cutout values were weak on light to moderate demand and moderate to heavy offerings. Choice boxed beef was .59 lower at 246.30 and select was .88 lower at 234.39.

Chicago Mercantile Exchange live cattle contracts settled 50 to 132 points higher. The fact that strong late week support quickly flooded back into the lean hog futures market changed the overall tone of the cattle market. Follow through buyer support quickly redeveloped, seemingly out of thin air, with moderate to strong gains holding. Word of cattle trading in the North at higher prices was also supportive late in the session. August went off the board at 155.90 up 1.25 and October was 1.32 higher at 151.42.

Feeder cattle ended the session 150 to 245 higher. Feeders shook off the early pressure as traders looked for additional support coming from both the lean hog and live cattle futures market. Trade mentality seemed to be focused on closing the week higher given the light trade volume and lack of additional fundamental pressure seen in the market. September settled 1.50 higher at 218.65, and October was up 1.95 at 216.72.

[Read more...]

Closing Grain and Livestock Futures: August 29, 2014

Sep. corn closed at $3.59, down 2 and 3/4 cents
Sep. soybeans closed at $10.89 and 1/2, up 15 and 3/4 cents
Sep. soybean meal closed at $439.50, up $6.30
Sep. soybean oil closed at 32.04, down 60 points
Sep. wheat closed at $5.50 and 1/4, down 6 and 1/4 cents
Aug. live cattle closed at $155.90, up $1.25
Oct. lean hogs closed at $98.12, up $2.65
Oct. crude oil closed at $95.96, up $1.41
Dec. cotton closed at 66.57, down 1 point
Sep. Class III milk closed at $23.95, unchanged
Sep. gold closed at $1,285.80, down $2.90
Dow Jones Industrial Average: 17,098.38, up 18.81 points

Friday midday cash livestock markets

Packer inquiry into the cattle is light to moderate. Look for buyers to turn up the heat over the next several hours, at least enough to get short term slaughter needs covered and grease the wheels for a Labor Day exit. A few late deals were scored in Nebraska on Thursday as high as 155.00 live and 243.00 dressed to regional buyers. Asking prices are around 155.00 to 156.00 live and 245.00 to 248.00 dressed.

Boxed beef values are lower in the morning report, with choice down .90 at 245.99, and select 234.78 down .49.

Feeder cattle receipts at Missouri auctions this week totaled 14,923 head. Compared to the previous week, feeder steers and heifers trended steady to 5.00 lower, although some southern markets did see instances of fully steady to firm markets on light weight feeders suitable for grazing wheat pastures. The supply of feeders offered at auctions was light as the August heat kept many producers at home. Feeder steers medium and large 1 averaging 624 pounds traded at 245.27 per hundredweight. 619 pound heifers averaged 227.43.

Barrow and gilt prices in the three major direct trade areas are not reported due to confidentiality. Nationally the market is .10 higher with a weighted average of 90.56 on a carcass basis. Missouri direct base carcass meat price is steady at 88.00. Most Midwest hog markets are closed for the holiday with only Peoria reporting 1.00 lower with a top of 62.00 live.

The pork carcass value is 1.00 higher at 101.62 FOB plant. The belly primal is over $15.00 higher.

Barring a huge surprise in country numbers, weekly hog kills will steadily climb from September through November. By Thanksgiving, pork demand will be challenged to handle an additional 300,000-plus heavy hogs on a weekly basis.

Solid finish for wheat, corn

Soybeans were mostly higher on technical buying and position squaring ahead of the first notice day. Contracts look a little oversold and the weekly new crop sales were strong at 1.3 million tons. Past that – the fundamentals look bearish and early yield numbers have been solid. Soybean meal was higher and soybean oil was lower on the adjustment of product spreads.

Corn was higher on short covering and technical buying, along with spillover from wheat. Corn pretty much just saw a bounce off of the recent lows. The weekly export numbers, fundamentals, and early yield numbers are all bearish. Ethanol futures were higher. Allendale reports South Korea’s Major Feedmill Group is tendering for 280,000 tons of optional origin corn.

The wheat complex was higher on commercial and technical buying. The trade’s watching the renewed tensions in Ukraine and the domestic spring harvest delays. Weekly export numbers were just about neutral, with good sales and slow shipments. The trade’s expecting light deliveries against the September CBOT contract. Australia’s Bureau of Meteorology notes dry weather around the eastern coast of Australia could threaten production this year.

Cash cattle trade was at a standstill

The cash cattle trade remained pretty much dead in the water on Thursday afternoon. Buying interest could surface late in the day if packers are serious about getting procurement complete before Friday, There were a few bids on the table from 151.00 to 152.00 live, and 240.00 to 241.00 dressed. Asking prices are around 155.00 plus live and 245.00 plus dressed. Bullish feedlot managers have been obviously cheered by the higher cattle futures prices. The kill totaled 114,000 head, 1,000 below last week and 11,000 down from last year.

Boxed beef cutout values were weak on choice and sharply lower on select on light to moderate demand and offerings. Choice beef was down .52 at 246.89 and select was 2.33 lower at 235.27.

Chicago Mercantile Exchange live cattle contracts settled 90 to 227 points higher. The live issues gained momentum through the morning trade with October futures leading the surge higher. This turn around in the market is likely to draw more attention to cash cattle prices at the end of the week. There could also be some additional interest by noncommercial traders stepping into the deferred contract months through Friday. August settled 1.45 higher at 154.65, and October was up 2.27 at 150.10.

Feeder cattle ended the session 37 to 270 points higher. The feeder trade moved quickly from the lead market to show more comfort in tagging along as the live futures market seemed to be doing the heavy lifting through the session. The focus on October live cattle reaching above 150.00 per hundredweight was the main incentive to get buyers to jump back into the game. August settled .37 higher at 218.52, and September was up 2.67 at 217.15. [Read more...]

Closing Grain and Livestock Futures: August 28, 2014

Sep. corn closed at $3.61 and 3/4, up 5 and 3/4 cents
Sep. soybeans closed at $10.73 and 3/4, down 12 cents
Sep. soybean meal closed at $433.20, up $16.70
Sep. soybean oil closed at 32.64, down 3 points
Sep. wheat closed at $5.56 and 1/2, up 9 and 1/4 cents
Aug. live cattle closed at $154.65, up $1.45
Oct. lean hogs closed at $95.47, down 45 cents
Oct. crude oil closed at $94.55, up 67 cents
Dec. cotton closed at 66.58, down 88 points
Sep. Class III milk closed at $23.95, down 3 cents
Sep. gold closed at $1,288.70, up $6.80
Dow Jones Industrial Average: 17,079.57, down 42.44 points

Thursday midday cash livestock markets

The cash cattle market is slow in developing on Thursday. The same starter bids evident yesterday at 151.00 to 152.00 live and 240.00 dressed are offered today, but little else. Buying interest should build through the day if packers are serious about completing procurement efforts before Friday. Asking prices are around 155.00 plus in the South and 245.00 plus in the North.

Boxed beef cutout values are near steady to significantly lower. Choice beef is down .34 at 247.07, and select is 2.02 lower at 235.58.

Receipts at the Creston, Iowa feeder cattle auction totaled 3213 head on Wednesday. There is no price comparison as the sale has not been reported for three months. Trade was active and demand was very good for the special customer appreciation BBQ auction. 89% of the cattle weighted over 600 pounds. Feeder steers, medium and large 1 averaging 832 pounds averaged 215.28 per hundredweight. 816 pound heifers averaged 205.56.

Barrows and gilt prices in the three major direct trade areas are not reported due to confidentiality. Nationally the direct trade is 1.65 lower with a weighted average of 90.45 on a carcass basis. Missouri direct hogs are steady with the base carcass meat price at 88.00. Buying interest is much lower prior to the holiday. Midwest barrows and gilts on a live basis are steady to 1.00 lower in a light test, from 61.50 to 70.00.

The pork carcass value FOB plant is .21 lower at 99.97 after sharp losses yesterday in the belly primal.

For the week ending August 23, Iowa barrow and gilts averaged 282.1 pounds, 0.4 pounds lighter than the previous week, but still 10.5 pounds heavier than 2013.

Continued strength in dairy markets

Cash cheese barrels held steady on the Chicago Mercantile Exchange on Wednesday, blocks increased a penny while butter lost 1.5 cents.  Class III futures were slightly lower.

Midwest cheese plants are running at or near capacity and no one seems to be contemplating any change in schedule through the holiday weekend.  Plants continue to add nonfat dry milk to vats to increase volume.  Dairy Market News notes cheese orders from food service and institutional buyers have come in earlier this year.  Last year they held-off waiting for prices to decline…which they didn’t.  Reports are the orders are also quite strong.  It is also noted that despite prices above $2, retail buyers have not backed-off.  Western cheese makers say despite strong production, current stocks are often below current demand.

National Dairy Products Sales Report for the week ending August 23rd: cheddar cheese blocks averaged $2.09 per pound up 5.2 cents from the previous week.  Barrels increased 6.5 cents to average $2.18.  Butter increased 12.2 cents to $2.54, nonfat dry milk decreased 2.3 cents to average $1.79 per pound and dry whey slipped 1.5 cents to 67.4 cents per pound.