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.

Soybeans able to post gains

Soybeans were higher on fund and commercial buying. Commercial demand is apparently back, at least somewhat, following the recent decline in price, but contracts did end the day closer to the session’s lows than the highs. There are concerns about dry weather in some key growing areas and the weekly export numbers were extremely bullish, especially on the new crop side, with sales at 90.1 million bushels. Soybean meal was higher and bean oil was steady to firm.

Corn was lower on fund and technical selling. Export sales were bullish, but it was another slow week for the shipments. Past that – according to Reuters, China is now requiring U.S. dried distillers grains be certified as free of the MIR 162 GMO trait. Ethanol futures were mixed, with nearby August up and the other active months down.

The wheat complex was lower on fund and technical selling. Export numbers were positive, with Japan the big buyer on the week, and the complex is oversold. However, the fundamentals, especially when taking into account the global fundamentals, remain bearish. Aside from the weather issues in the U.S. Plains, world conditions generally look pretty good at this time. DTN reports South Korea’s Korea Feed Association bought, in a snap tender, 27,400 tons of U.S. milling wheat and 32,000 tons of feed wheat, and another South Korea based buyer picked up 30,700 tons of U.S. wheat. In sell-buy-sell trade, Japan purchased 94,600 tons of milling wheat from the U.S., Australia, and Canada.

Lean hog contracts close lower

There was aggressive spending in parts of the northern cattle country on Thursday, with cattle on a live basis selling at 162.00, and 257.00 to 262.00 dressed. Trade volumes suggest we could see more trade on Friday especially in the South. On the other hand, it’s a good guess that packers are probably troubled by the runaway cost of cattle in late July, wondering if they can manage to sell beef high enough to maintain profit margins. Nevertheless, bullish feedlot managers will be pricing the balance of the showlists near the top of Thursday’s business. The kill totaled 115,000 head, even with last week, but 8,000 below a year ago.

Boxed beef cutout values were sharply higher on good demand and light to moderate offerings. Choice boxed beef was up 2.97 at 255.56, and select was 4.13 higher at 252.84.

Chicago Mercantile Exchange live cattle contracts settled 05 to 75 points higher. Market direction was hard to establish with prices moving higher and lower and buyers and sellers quickly jumping in and then back out of the market. Strong support in both cash markets and beef values pointed to follow through support, while the lean hog market lent some weakness to the complex. August settled .50 higher at 156.55, and September was up .05 at 158.05.

Feeder cattle settled 67 points higher to 55 lower. Although feeder futures bounced all over the place, prices were mixed in a narrow range as very little additional direction developed across the complex. There were times moderate to strong buyer support pushed prices higher, but the lack of overall volume in the market was unable to sustain the gains. August settle .07 higher at 217.32, and September was down .35 at 218.05.

Feeder cattle receipts at the Bassett Livestock Auction, Bassett, Nebraska totaled 1540 head on Wednesday. A limited number of comparable offerings from two weeks ago with 650 pound steers significantly higher and 850 pound heifers 10.00 higher. Demand was very good for all offerings of weaned fall calves and reputation, replacement quality heifers. 185 head of 677 pound steers averaged 268.19 per hundredweight. 120 replacement heifers averaging 930 pounds brought 219.00 on average. [Read more...]

Closing Grain and Livestock Futures: July 24, 2014

Sep. corn closed at $3.61 and 1/2, down 1 cent
Aug. soybeans closed at $12.07 and 1/2, up 6 and 1/2 cents
Aug. soybean meal closed at $395.30, up $3.80
Aug. soybean oil closed at 36.24, up 4 points
Sep. wheat closed at $5.28 and 3/4, down 2 cents
Aug. live cattle closed at $156.55, up 50 cents
Aug. lean hogs closed at $123.20, down $1.37
Sep. crude oil closed at $102.07, down $1.05
Oct. cotton closed at 66.40, down 237 points
Aug. Class III milk closed at $21.69, down 11 cents
Aug. gold closed at $1,290.80, down $13.90
Dow Jones Industrial Average: 17,083.80, down 2.83 points

June red meat production down 1% on year

U.S. red meat production during June 2014 was 3.824 billion pounds, down 1% from the June 2013 total of 3.855 billion pounds.

According to USDA, beef production was 2.069 billion pounds, 4% less than last year, with a 5% decline in slaughter to 2.606 million head and seven pound gain in average live weight at 1,307 pounds. Veal was pegged at 7.6 million pounds, 10% lower than a year ago, with the kill dropping 21% to 45,300 head and average live weight jumping 35 pounds to 285 pounds.

Pork production came out at 1.734 billion pounds, up 3% on the year, with a 1% decrease in slaughter, to 8.1 million head, canceled out by an eleven pound increase in average live weight, to 285 pounds.

Lamb and mutton production was reported at 13.4 million pounds, 5% higher than last year, with the kill rising 5% to 193,300 head and average live weight losing a pound to 138 pounds.

For January to June 2014, U.S. red meat production is 23.471 billion pounds, 3% lower than a year ago.

Thursday midday cash livestock markets

Cattle country woke up early on Thursday with fresh bids noted in all major feeding states. And a few cattle traded today in Nebraska at 162.00 live, $6.00higher than last week’s weighted average. Some cattle trade was reported late yesterday in Nebraska, around 10,000 head at 255.00 dressed to regional buyers and 160.00 live to a major. Asking prices are around 162.00 to 164.00 in the South and 258.00 plus in the North.

Boxed beef cutout values are sharply higher in the morning report, choice is up 3.28 at 255.87, and select is 3.76 higher at 252.47.

Feeder cattle receipts at the Bassett Livestock Auction, Bassett, Nebraska totaled 1540 head on Wednesday. A limited number of comparable offerings from two weeks ago with 650 pound steers significantly higher and 850 pound heifers 10.00 higher. Demand was very good for all offerings of weaned fall calves and reputation, replacement quality heifers. 185 head of 677 pound steers averaged 268.19 per hundredweight. 120 replacement heifers averaging 930 pounds brought 219.00 on average.

Barrows and gilts in the Iowa/Minnesota direct, East and West are not reported due to confidentiality. Nationally the market is 1.55 lower at 123.44 weighted average on a carcass basis. Missouri direct base carcass meat price is steady to 3.00 lower from 116.00 to 122.00. In the Midwest barrows and gilts are steady from 88.00 to 96.00 live.

The pork carcass cutout value is .65 lower FOB plant at 131.95.

For the week ending July 19, Iowa barrows and gilts averaged 284.8 pounds, .8 pound lighter than the prior week, though still 13.7 pounds above 2013. It seems like a good bet that hog size will shrink again this week given hot summer temps.