Soybeans, corn give back gains

Soybeans were lower on fund and technical selling, in “Turnaround Tuesday” type activity. There are some weather concerns and the condition rating declined over the past week, but the trade continues to expect a big crop. Also, forecasts for the coming week do have a little more precipitation than what we saw on Monday. Demand is solid, with unknown buying 135,000 tons of new crop meal. Soybean meal and oil were lower, following beans.

Corn was lower on fund and technical selling, in addition to spillover from beans. Crop development is just ahead of average and unless the crop deteriorates drastically, we should see above average yields. Corn’s also watching the better chances for rainfall next week. Colombia bought 147,000 tons of new crop U.S. corn. Ethanol futures were lower.

The wheat complex was lower on fund and technical selling, along with the higher dollar. The winter wheat harvest is slightly ahead of the average pace, sending September Chicago to a new contract low, and spring wheat is in good shape overall. Past that – the fundamentals for the complex remain bearish, especially when taking a look at the global picture. Still, there are some world weather concerns, including harvest delays in Europe and dry conditions in parts of Australia. U.S. Wheat Associates, the National Association of Wheat Growers and other groups are calling on USDA to restore grain inspections at the port in Vancouver, Washington. According to Allendale, a major grain company closed its terminal at the port, citing labor disputes and inability to get ships loaded. South Korea’s Major Feedmill Group canceled a tender for 45,000 to 65,000 tons of optional origin feed wheat due to quality concerns.

Boxed beef cutouts end sharply higher again

Feedlot country was at a standstill on Tuesday afternoon. Clearly, significant trade volume will be delayed until at least Wednesday or Thursday. Some showlists have been priced around 168.00 to 170.00 in the South and 265.00 plus in the North. The slaughter totaled 115,000 head, 1,000 more than last week, but 9,000 less than last year.

Boxed beef cutout values were sharply higher on good demand and moderate offerings. Choice beef was up 2.04 at 261.34, and select was 2.86 higher at 259.03.

Live cattle futures were mixed on the Chicago Mercantile Exchange on Tuesday. The nearby contracts were under moderate pressure. Trade volume was slow as bulls and bears probably will stall until cash prospects become clearer. Boxed beef cutout values were sharply higher at midday lending support to the complex. August settled .27 lower at 158.77, and October was unchanged at 159.07.

Feeder cattle ended the session 62 to 127 points higher supported by follow through buying and the recent $7.00 surge of the cash index. The market is at a stage where every tick higher effectively rewrites the record book. August settled 1.25 higher at 221.42, and September was up 1.25 at 222.45.

Feeder cattle receipts at the Sioux Falls Regional Livestock at Worthing, South Dakota totaled 1722 head on Wednesday. Compared to two weeks ago. Feeder steers were 10.00 to 15.00 higher. Heifers were too lightly tested in recent weeks to make a good comparison. There was very good demand for all weights of feeder cattle. Buyers were eager bidders after last week’s sharp run-up in the cash fed market and the subsequent rise in live and feeder cattle futures. Feeder steers averaging 733 pounds traded at 239.32 per hundredweight. 595 pound heifers brought 243.00. [Read more...]

Closing Grain and Livestock Futures: July 29, 2014

Sep. corn closed at $3.61 and 1/2, down 6 and 1/4 cents
Aug. soybeans closed at $12.26 and 1/2, down 10 cents
Aug. soybean meal closed at $395.40, down $7.40
Aug. soybean oil closed at 36.25, down 27 points
Sep. wheat closed at $5.20, down 14 and 3/4 cents
Aug. live cattle closed at $158.77, down 27 cents
Aug. lean hogs closed at $121.45, down $2.22
Sep. crude oil closed at $100.97, down 70 cents
Oct. cotton closed at 64.94, down 92 points
Aug. Class III milk closed at $21.62, up 2 cents
Aug. gold closed at $1,298.30, down $5.00
Dow Jones Industrial Average: 16,912.11, down 70.48 points

Tuesday Midday cash livestock markets

It is typically quiet in cattle country on Tuesday. Bids and asking prices are not fully developed. However, a few showlists have been priced around 168.00 to 170.00 in the South, and 265.00 to 270.00 in the North. Significant trade volume will probably be delayed until the second half of the week.

Boxed beef cutout values are significantly higher in the morning report. Choice beef is up 2.60 at 261.90, and select is 2.77 higher at 258.94.

The beef carcass value continues to move impressively higher thanks to the bullish combination of reduced midsummer tonnage and solid demand. Both choice and select cut-outs set new all-time highs on Monday with box demand described as moderate.

Feeder cattle receipts at the Sioux Falls Regional Livestock at Worthing, South Dakota totaled 1722 head on Wednesday. Compared to two weeks ago. Feeder steers were 10.00 to 15.00 higher. Heifers were too lightly tested in recent weeks to make a good comparison. There was very good demand for all weights of feeder cattle. Buyers were eager bidders after last week’s sharp run-up in the cash fed market and the subsequent rise in live and feeder cattle futures. Feeder steers averaging 733 pounds traded at 239.32 per hundredweight. 595 pound heifers brought 243.00.

Barrows and gilts in the Iowa/Minnesota direct trade opened 1.23 lower at 121.15 weighted average on a carcass basis, the West is down 1.04 at 121.14, and Eastern hogs are .40 lower at 120.74. Missouri direct base carcass meat price is steady to 1.00 lower from 115.00 to 118.00. Barrows and gilts at Midwest markets are steady to 2.00 lower from 86.00 to 95.00 on a live basis.

The pork carcass cutout value is 2.52 higher at 133.46 FOB plant. Bellies, ribs, hams and loins had substantial gains.

While the bullish threat tied to PED has lost much of its sting this summer, it’s still quite possible that the spring pig crop was significantly cut in size, less than the winter pig crop, but still substantial by this devastating disease.

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.