Exports, weather concerns support soybeans

Soybeans were higher on fund and commercial buying. Demand continues to be strong, with China buying 420,000 tons of U.S. new crop, along with 66,000 tons of optional origin, and some areas of the Midwest do need rain as we head into August. USDA reports 76% of soybeans are blooming, compared to the five year average of 72%, with 38% at the pod setting stage, compared to 31% on average. 71% of soybeans are in good to excellent shape, down 2% on the week. Soybean meal and oil were higher, following the lead of beans. Safras & Mercado projects 2015 Brazilian soybean production at 94.5 million tons.

Corn was higher on fund and technical buying. Corn’s also watching the weather, and while the trade still expects a big crop, they would also like to see rainfall in parts of the region, which would help with development. USDA’s first survey-based production estimate is out in August. According to USDA, 78% of corn is silking, compared to on average, with 17% at the dough making stage, compared to 16% on average. 75% of corn is in good to excellent condition, down 1% from a week ago. Ethanol futures were higher.

The wheat complex was lower on fund and commercial selling. Chicago and Kansas City are watching the tail end of the winter wheat harvest and spring development conditions look good. For the U.S. winter crop, 83% is harvested, compared to 80% on average, while for spring wheat, 93% has headed, matching the five year average, and 70% is rated good to excellent, unchanged from last week. Nigeria bought 101,000 tons of 2014/15 U.S. wheat (61,000 tons hard red winter and 40,000 tons soft red winter). Globally, the trade’s keeping an eye on dry weather in Australia, along with potential production and trade disruptions in the Black Sea region. Turkey purchased 165,000 tons of milling wheat.

Feeder cattle sell higher at Monday auction

Feedlot country was quiet on Monday afternoon following the distribution of the new showlists. The late July offering appears to be somewhat larger than last week. Although asking prices are not well defined, a few producers have priced cattle around 168.00 to 170.00 in the South and 255.00 to 270.00 in the North. The slaughter totaled 111,000 head, 4,000 below last week, and 7,000 smaller than a year ago.

Boxed beef cutout values were higher on moderate demand and light offerings. Choice beef was up 1.92 at 259.30, and select cuts were 1.84 higher at 256.17.

Chicago Mercantile Exchange live cattle contracts were 1.70 higher to 72 lower. The nearby contracts opened significantly higher but quickly attracted long liquidation and speculative selling. The trade remained volatile through much of the session. Perhaps not surprising given the thin air that typically accompanies record prices according to John Harrington at DTN. Floor talk is blaming nervous ties to wholesale beef demand. Can it be sustained at current levels? August settled .05 lower at 159.05, and October was down .72 at 159.07.

[Read more...]

Closing Grain and Livestock Futures: July 28, 2014

Sep. corn closed at $3.67 and 3/4, up 4 and 3/4 cents
Aug. soybeans closed at $12.36 and 1/2, up 24 and 1/4 cents
Aug. soybean meal closed at $402.80, up $4.80
Aug. soybean oil closed at 36.52, up 43 points
Sep. wheat closed at $5.34 and 3/4, down 3 and 1/4 cents
Aug. live cattle closed at $159.05, down 5 cents
Aug. lean hogs closed at $123.67, up 5 cents
Sep. crude oil closed at $101.67, down 42 cents
Oct. cotton closed at 65.36, up 20 points
Aug. Class III milk closed at $21.60, up 15 cents
Aug. gold closed at $1,303.30, unchanged
Dow Jones Industrial Average: 16,982.59, up 22.02 points

Monday midday cash livestock markets

It is a typical Monday in cattle country with the main item of business the distribution of the new showlists. Bids and asking prices are not fully established so far today. Last week’s business exploded on Thursday and Friday with some Northern dressed trade and Southern live deals as much as 10.00 higher than the previous week’s trade.

Boxed beef cutouts are significantly higher in the morning g report. Choice beef is up 1.39 at 258.77, and select is up 1.71 at 256.04.

Feeder cattle receipts at the Joplin Regional Stockyards today totaled 4,000 head. Compared to last week, steer and heifer calves were firm to 5.00 higher. 600 to 700 pound yearling steers were 10.00 to 15.00 higher. Demand was good and the supply was moderate. Feeder steers, medium and large 1 weighing 500 to 600 pounds traded from 250.00 to 277.50. 5 to 6 weight heifers brought 232.00 to 236.00.

Barrows and gilts in the Iowa/Minnesota direct trade opened 3.54 lower at 121.83 weighted average on a carcass basis, the West is down 3.36 at 121.84, and the East is 1.28 lower at 121.14. The Missouri direct base carcass meat price is steady to 4.00 lower from 116.00 to 118.00. Barrows and gilts at Midwest markets are steady to 4.00 lower from 86.00 to 95.00.

The pork carcass cutout value is up 1.73 at 133.52 FOB plant.

The recent combination of sharply higher beef prices and significantly lower pork prices should soon cause retailers and food managers to “wake up” to the superior value and featuring opportunity of pork.

From Friday to Friday, the pork carcass value collapsed by $5.77, especially hammered by a $23.14 implosion in the belly primal. While tomatoes may still be slow in ripening, it would appear bacon and lettuce supplies must be more than abundant.

Slow week for export inspections

USDA reports soybean export inspections for the week ending July 24 were larger than expected, while wheat was within the anticipated range and corn was below pre-report estimates. All three were less than what’s needed weekly to meet USDA projections for their respective marketing years.

Wheat came out at 395,963 tons, down 131,670 tons from the week ending July 17 and 311,014 lower than the week ending July 25, 2013. At this point in the 2014/15 marketing year, wheat inspections are 3,643,897 tons, compared to 5,116,841 in 2013/14.

Corn was reported at 805,365 tons, 136,612 less than the prior week, but 512,032 more than this time last year. For the 2013/14 marketing year to date, corn inspections are 41,818,344 tons, compared to 15,954,578 in 2012/13.

Soybeans were pegged at 112,345 tons, up 15,185 from the previous week and 75,760 higher than a year ago. So far this marketing year, soybean inspections are 43,022,445 tons, compared to 35,333,329 last year.

Sorghum inspections totaled 178,192 tons. That’s an increase of 63,830 tons on the week and 127,548 on the year. 2013/14 sorghum inspections are 4,191,328 tons, compared to 1,578,425 in 2012/13.

Wheat ends day modestly higher

Soybeans were mixed on old crop/new crop spread trade. There was some rain in dry parts of the central and upper Midwest and the new crop fundamentals are bearish. China did buy more new crop U.S. beans, 360,000 tons, and Mexico bought 134,700 tons of new crop U.S. bean meal. Soybean meal was mixed, mostly higher, on the positive demand outlook, and bean oil was lower on profit taking.

Corn was modestly higher on short covering and technical buying. Corn’s also watching that moderate but much needed rain in parts of Iowa, Minnesota, and Wisconsin. Mexico bought U.S. corn, 269,084 tons, most of that, 245,716 tons, was new crop. Ethanol futures were higher. Allendale notes Chinese feed corn demand has declined as their hog numbers have dipped.

The wheat complex was higher on short covering and technical buying. There’s some harvest delaying rain around the Midwest, but it’s not expected to be a major event. The Wheat Quality Council’s hard red spring tour has a record projected yield in the Northern Plains. Even with a few domestic and global trouble spots for wheat, the fundamentals remain bearish. Some of the buying was linked to probable European trade restrictions on Russia, but it’s not known at this point how much of an impact that will have on grain exports.

Cash cattle sell for record high prices

The cash cattle market was quiet on Friday afternoon and business was essentially completed for the week. Trade volume totals remained rather modest and the assumption can be made that area packers are formulating enough cattle to at least cover short term slaughter needs. It has been quite a week with both live and dressed sales marked as much as 10.00 higher than the previous week with price levels in all regions shattering the record highs established a few weeks ago. Live sales ended the week 161.00 to 165.00 and dressed sales at 257.00 to 262.00. The weekly cattle kill was estimated at 571,000 head, 6,000 smaller than last week, and 69,000 head less than 2013.

The cattle on feed report appears to be generally neutral, coming in close to expectations. On feed numbers were down 2%, placements in June off 6% and June marketing’s down 2%. For more on the story and analysis visit the news section of the website.

Boxed beef cutout values were higher on moderate demand and light offerings. Choice beef was up 1.82 at 257.38 and select was 1.49 higher at 254.33.

Chicago Mercantile Exchange live cattle contracts settled 70 to 255 higher. Strong gains were seen in front month August futures as traders focused on the strong fundamental support seen through the complex .Futures once again set new historical records due to the explosive action in the cash market and technical buying August settled 2.55 higher at 159.10 and October was up 1.75 at 159.80.

Feeder cattle ended the session 92 to 152 points higher as moderate to strong buyer support redeveloped in the feeder cattle futures despite mixed trade activity early in the session. The focus on the cattle on feed and cattle inventory reports helped to drive prices higher. August settled .92 higher at 218.25 and September was up 1.20 at 219.25.

Feeder cattle receipts at Missouri auctions this week totaled 17,342 head. Compared to last week, feeders sold steady to 5.00 higher, with several mid-weight calves fully 10.00 higher. Markets started the week very mixed and few local auctions quoted sharply lower prices, others wasted no time in starting the week’s price rally with several posting instances of 10.00 to 15.00 higher. The supply was light to moderate and demand was good to very good. Feeder steers medium and large 1 averaging 619 pounds averaged 243.28 per hundredweight. 624 pound heifers brought 223.69. [Read more...]

Closing Grain and Livestock Futures: July 25, 2014

Sep. corn closed at $3.63, up 1 and 1/2 cents
Aug. soybeans closed at $12.12 and 1/4, up 4 and 3/4 cents
Aug. soybean meal closed at $398.00, up $2.70
Aug. soybean oil closed at 36.09, down 15 points
Sep. wheat closed at $5.38, up 9 and 1/4 cents
Aug. live cattle closed at $159.10, up $2.55
Aug. lean hogs closed at $123.62, up 42 cents
Sep. crude oil closed at $102.09, up 2 cents
Oct. cotton closed at 65.16, down 124 points
Aug. Class III milk closed at $21.45, down 24 cents
Aug. gold closed at $1,303.30, up $12.50
Dow Jones Industrial Average: 16,960.57, down 123.23 points

Cattle placements down 6%

According to USDA, cattle placements on feed during the month of June were slightly lower than expected.

Placements last month were 1.455 million head, down 6% from June 2013 and below Dow Jones’ average estimate for a 4.4% decline. Cash prices are at record levels and feed costs are down, but feeder cattle supplies are extremely tight and pasture conditions have improved. Most of the placements were heavier weight cattle, weighing more than 700 pounds: cattle and calves weighing less than 600 pounds were 400,000 head and 600 to 699 pounders were 245,000 head, while the 700 to 799 pound category was 320,000 head and cattle weighing more than 800 pounds were 490,000 head.

Marketings came out at 1.847 million head, 2% less than last year and in-line with expectations, and the lowest fed cattle marketings for the month of June since the series of reports started in 1996.

The total number of cattle on feed in the U.S. on July 1 was 10.127 million head, 2% lower than a year ago.

Other disappearances were 75,000 head, a 19% year to year increase.

The report generally looks neutral.

Friday midday cash livestock markets

USDA Mandatory is reporting a moderate to active cattle trade on very good demand in Kansas on Friday. Live sales are trending 9.00 higher than last week with sales ranging from 164.00 to 165.00. Trading is light in Nebraska on very good demand. Live sales are steady to 3.00 higher than Thursday’s sales at 165.00. In Colorado live sales are 1.00 higher than Thursday’s trades at 166.00. Prices in all regions this week have shattered the record established a few weeks ago.

Boxed beef prices were significantly higher in the morning report with the choice up 1.74 at 257.30, and select up 1.80 at 254.68.

Feeder cattle receipts at Missouri auctions this week totaled 17,342 head. Compared to last week, feeders sold steady to 5.00 higher, with several mid-weight calves fully 10.00 higher. Markets started the week very mixed and few local auctions quoted sharply lower prices, others wasted no time in starting the week’s price rally with several posting instances of 10.00 to 15.00 higher. The supply was light to moderate and demand was good to very good. Feeder steers medium and large 1 averaging 619 pounds averaged 243.28 per hundredweight. 624 pound heifers brought 223.69.

Barrows and gilts in the Iowa/Minnesota direct trade are 2.80 lower at 123.48 weighted average on a carcass basis, the West is down 2.33 at 123.61, and in the East the market is 1.23 lower at 122.29. Missouri direct base carcass meat price is steady from 116.00 to 122.00. Barrows and gilts at Midwest markets are fully steady on a live basis from 88.00 to 96.00.

The pork carcass cutout value is 1.56 higher FOB plant at 132.87.

Iowa’s cash hog trade actually bounced some higher yesterday with the dressed weighted average closing $1.18 higher. If the cash index can start to stabilize, shorts would be quickly motivated to cover the deep discounts of nearby lean futures.