Midday cash livestock markets

Barrows and gilts in the Iowa/Minnesota direct trade are down 1.93 at 71.90, the West is 1.13 lower at 72.19, and the East is .67 lower at 69.66. Interior Missouri direct base carcass meat price is steady from 65.00 to 67.00. The spread between carcass value and the weighted average carcass price is less than $2.00 implying the worst processing margins seen in the last month. Yet country numbers remain too tight for hog buyers to wrench any leverage away from the producers. Chain speed continues to be limited by fire damage at Logansport, Indiana.

A few bids on cattle were reported in Nebraska this morning at 143.00 on a dressed basis, feedlot operators are asking 150.00. No bids were reported in the South where they are asking around 94.00. We could see more preliminary bids throughout the day, but significant business may not happen until tomorrow or Friday. Choice boxed beef is up .06 at 149.57, and select was up .38 at 149.40.

Feeder cattle receipts at the Ozarks Regional Stockyards at West Plains, MO totaled 3631 head on Tuesday. Compared to last week, steers weighing less than 700 pounds were steady to 2.00 higher, over 700 lbs steady to weak. Heifers’ weighing less than 700 lbs 2.00 to 3.00 higher, over 700 lbs steady to 1.00 lower. Feeder steers medium and large 1 and 1-2 weighing 500 to 600 pounds traded from 104.00 to 125.00, 7 to 8 weights from 93.50 to 103.00. Feeder heifers weighing 500 to 600 pounds brought 94.00 to 112.00, and 7 to 8 weights from 88.00 to 95.00 per hundredweight.

USDA lowers soybean ending stocks, raises corn and wheat

USDA’s monthly supply and demand update showed stronger than expected demand for soybeans and weaker than anticipated demand for corn and wheat.

2009/10 wheat ending stocks were reported at 1.001 billion bushels, compared to the average pre-report projection of 971 million bushels and February’s estimate of 981 million bushels. USDA lowered the food demand use 20 million bushels to 920 million taking domestic use to 1.162 billion and total use to 1.987 billion bushels. The average 2009/10 farm price is estimated at $4.80 to $5.00 per bushel, compared to February’s range of $4.75 to $4.95 and the 2008/09 estimate of $6.78 per bushel.

2009/10 corn ending stocks came out at 1.799 billion bushels, compared to the pre-report estimate of 1.716 billion bushels and February’s projection of 1.719 billion bushels. With 2009 production now pegged at 13.131 billion bushels, total supply is placed at 14.814 billion bushels, down 20 million from February. USDA left domestic supply unchanged while lowering export demand by 100 million bushels to 1.900 billion, taking total use to 13.015 billion bushels. The average 2009/10 farm price is estimated at $3.45 to $3.75 per bushel, compared to $3.45 to $3.95 in February and the 2008/09 estimate of $4.06 per bushel.

2009/10 soybean ending stocks were pegged at 190 million bushels, compared to the average pre-report guess of 195 million and February’s estimate of 210 million bushels. USDA revised 2009 soybean production to 3.359 billion bushels while raising imports to 15 million, taking total supply to 3.512 billion bushels. USDA raised the crush 10 million bushels to 1.730 billion and increased export demand 20 million to 1.420 billion bushels while lowering seed use 5 million to 89 million bushels for total use of 3.322 billion bushels, an increase of 25 million bushels. The average 2009/10 farm price is estimated at $8.95 to $9.95, compared to February’s range of $8.70 to $10.20 and the 2008/09 estimate of $9.97 per bushel.

2009/10 soybean oil ending stocks were reported at 2.637 billion pounds, compared to 2.227 billion in February. With USDA raising the soybean crush estimate, production is now pegged at 19.270 billion pounds, taking total supply to 22.087 billion. USDA lowered domestic use 300 million pounds to 16.200 billion while leaving biodiesel and export use unchanged, putting total use at 19.450 billion pounds. The average 2009/10 farm price is estimated at $.3350 to $.3650 per pound, unchanged from February and up from the 2008/09 estimate of $.3216 per pound.

2009/10 soybean meal ending stocks came out at 300,000 short tons, unchanged from a month ago and up 65,000 from a year ago. USDA lowered domestic use by 200,000 short tons while increasing exports 200,000, leaving total use at 40.600 million short tons. The average 2009/10 farm price is estimated at $280 to $310 per short ton, compared to February’s range of $270 to $320 and the 2008/09 estimate of $331.17 per short ton.
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Cattle mixed waiting for cash trade

Chicago Mercantile Exchange live cattle futures were mixed, mostly lower, ahead of cash business. April and June had additional support from fund buying, the higher midday boxed beef and good weekend clearance over the weekend while deferreds picked up extra pressure from profit taking and the lower corn. April was up $.20 at $94.40 and June was $.05 higher at $92.32.

Feeder cattle were mostly lower on profit taking, spreading and contracts’ premium to the cash index. March was down $.17 at $102.35 and April was up $.02 at $106.02.

Direct cash cattle markets were quiet with widespread business not expected until Thursday or Friday. Asking prices are around $94 in the South and $148 + North with bids at $90 to $91 on the live basis in Texas and Kansas. Boxed beef was firm on light to moderate demand and offerings with Choice up $.21 at $149.50 and Select $.91 higher at $149.02. Tuesday’s cattle slaughter was estimated at 123,000 head, up 3,000 from a week ago and steady with a year ago.

Hogs were lower on the mostly steady to lower cash, Monday’s lower cutout and most contracts premium to cash. Technical weakness and spreading out of the April contract into June were additional features. Both April and June traded below the 10-day moving average. April was down $.40 at $72.40 and May was $.87 lower at $77.92.

Bellies were higher in light trade on spreading, solid demand and oversold signals. March was up $.50 at $93 and May was $.77 higher at $92.80.

Cash hogs were mixed with influences from both good packer demand and questions over wholesale demand. The Eastern Cornbelt was down $.54 with a weighted average of $70.33, the Western Belt was up $.24 at $73.75 and Iowa/Southern Minnesota was $.32 higher at $73.86. Butcher hogs at the terminals were mostly steady to $2 lower with an instance of $1 higher and tops at $46 to $53. Missouri Direct butcher trade was steady at $65 to $67. The pork carcass cutout value was down for the third day in a row, $.12 lower at $74.60 in slow to moderate trade with mostly light demand and light to moderate offerings. The estimated hog slaughter of 402,000 head was down 30,000 from last week and 16,000 less than last year. Monday’s kill was revised down 5,000 head to 409,000.

Grains and oilseeds mostly lower ahead of USDA numbers

Soybeans were mostly lower with traders getting ready for the USDA supply and demand update. The trade expects USDA to lower the 2009 production estimate and domestic ending stocks with the report out at 7:30 AM Central on Wednesday, March 10. That said – USDA could also raise South American production estimates. Two new Brazilian estimates were out Tuesday with Brazil’s National Commodities Supply Corp. or CONAB pegging the crop at 67.5 million tons and Brazil’s Census Bureau or IBGE projecting beans at 66.9 million. Brazilian ag consultancy Celeres, via Dow Jones Newswires, reports 32% of Brazil’s 2009/10 crop had been harvested as of March 5. Contracts made one month lows early before pulling back up on a lack of follow through selling. Soybean oil was up modestly on product spread adjustments. Meal was steady to weak on that spread activity, hitting a one year low during the session.

Corn was lower on technical and fund selling, in addition to pre-report position squaring and pressure from the higher dollar index. Traders see USDA making downward revisions to 2009 production and average yield estimates. However, ending stocks should be just about unchanged from last month due to slack demand and some in the trade seem to be more focused on prospective 2010 planting estimates out March 31. Ethanol futures were lower.

The wheat complex was lower on technical and fund selling, along with the higher dollar and spillover from corn. Fundamentals for wheat remain extremely bearish with a large supply and poor demand for U.S. wheat. Those negative fundamentals should be reflected in the upcoming supply and demand numbers with domestic ending stocks expected to see a modest decline. USDA’s National Ag Statistics Service reports 60% of Kansas’ winter crop is in good to excellent shape, up 7% on the week, with jointing at 4% and 20% of the crop out of dormancy thanks to warm weather. European wheat was mixed following the currency markets; May Paris was down .2% and May London was flat. According to Dow Jones Newswires, Jordan’s government has taken a $100 million loan from the Jordan Islamic Bank to buy wheat and barley. Japan issued a tender for 152,000 tons of wheat (42,000 tons Australian standard white, 40,000 tons U.S. dark northern spring, 25,000 tons Canadian western red spring, 25,000 tons U.S. western white and 20,000 tons U.S. hard red winter) and Egypt is tendering for 120,000 tons from a variety of sources.

Closing Grain and Livestock Futures: March 9, 2010

March corn closed at $3.58 and 3/4, down 5 and 3/4 cents
March soybeans closed at $9.41 and 1/2, up 1 cent
March soybean meal closed at $259.00, down 50 cents
March soybean oil closed at 39.97, up 2 points
March wheat closed at $4.78 and 1/2, down 6 cents
April live cattle closed at $94.40, up 20 cents
April lean hogs closed at $72.40, down 40 cents
April crude oil closed at $81.49, down 38 cents
March cotton closed at 79.72, down 242 points
March Class III milk closed at $12.76, down 2 cents
Dow Jones Industrial Average: 10,564.38, up 11.86 points

Midday cash livestock markets

Iowa/Minnesota barrows and gilts are down 1.36 at 72.18 on a carcass basis, the West is down 1.18 at 72.33, and the East is down .92 at 69.99. Missouri direct base carcass meat price is steady from 65.00 to 67.00. Pork processing margins are going from bad to worse. Carcass value slipped nearly a dollar lower on Monday even as the cost of live inventory increases. Packers may soon be forced to react by slowing chain speed and production.

Packer inquiry into the cattle is limited on Tuesday with just a few scattered bids reported in the South. Asking prices are around 94 in the South with bids at 90.00 to 91.00. In the North feedlot operators have priced cattle at 147.00 to 148.00 and no bids have been reported so far today. Board premiums at a relatively weak basis should work to fortify feedlot resolve. On the other hand, the beef trade remains defensive causing packers to stay cautious and possibly plan for slower chain speed. Choice boxed beef is .23 higher at 149.52 and select is up .90 at 149.01.

Feeder cattle receipts at the Sioux Falls Regional Stockyards at Worthing, SD totaled 4359 head on Monday. Compared to last week feeder steers weighing less than 800 pounds were steady. Steers over 800 were 1.00 to 2.00 lower. Feeder heifers trended mostly steady to 2.00 higher. There were several load lots in Monday’s offering. Feeder steers medium and large 1, 308 head averaging 679 lbs averaged 109.94 per hundredweight. 213 heifers weighing 677 lbs brought 99.24 per hundredweight.

USDA could lower 2009 corn, soybean production estimates

Ahead of the upcoming USDA supply and demand numbers, analysts expect reductions in the Ag Department’s 2009 corn and soybean production estimates, along with smaller domestic ending stocks for corn, beans and wheat.

Those anticipated revisions for last year’s corn and soybean crops are due to development issues during the growing season and problems with harvest in some areas.

The average guess for corn production is 13.081 billion bushels, compared to 13.151 billion in January’s report. Expectations range from 12.838 billion to 13.200 billion bushels. The average yield is projected at 164.5 bushels per acre, in a range of 162.0 to 165.3 bushels per acre, compared to the previous estimate of 165.2.

2009 soybean production is seen at 3.350 billion bushels, compared to the last estimate of 3.361 million, and average yield is pegged at 43.8 bushels per acre, which would be down two tenths of a bushel from January. Production expectations range from 3.210 billion to 3.375 billion bushels and yield estimates run from 41.9 to 44.0 bushels per acre.

Domestic soybean ending stocks for the current marketing year are expected to be around 195 million bushels, down 15 million from February with corn ending stocks seen at 1.716 billion bushels, nearly unchanged on the month, and wheat ending stocks projected at 971 million bushels, compared to February’s estimate of 981 million bushels.

USDA will also be updating world production and ending stocks estimates.

The numbers are out 7:30 AM Central Wednesday, March 10.

Grains and oilseeds start to get ready for USDA reports

Soybeans were higher on technical buying, short covering and the lower dollar. Near term demand looks good and Wednesday’s USDA supply and demand update should show tighter domestic stocks. However, the trade’s keeping close watch on South America’s expected record crop. Overall, business was pretty light and contracts as much as anything bought back some of last week’s losses ahead of the USDA numbers. Soybean meal and oil were higher on spillover from beans and oversold signals. Oil managed to outgain meal on product spread trade.

Corn was narrowly mixed in consolidation trade with traders getting ready for Wednesday’s USDA report. The trade expects the numbers to be mixed with ending stocks just about steady with last month on slack demand and a chance for USDA to lower the 2009 production estimate. There was limited support from expectations for planting delays due to flooding with warm temperatures and rainfall in store for many areas of the Midwest this week. Also, there are concerns about rain in South American delaying harvest. Ethanol futures were higher. According to Dow Jones Newswires, Japan has purchased roughly 200,000 tons of U.S. corn since the start of March due to high shipping costs out of South America.

The wheat complex was higher on technical buying, short covering and the lower dollar. Trade’s expected to stay fairly choppy ahead of Wednesday’s supply and demand update. Contracts were oversold after last week’s losses but fundamentals remain very bearish with a large supply and not much new demand for U.S. wheat. Minneapolis did pick up additional support from concerns over spring planting delays. European wheat was mixed with support from disease concerns on the continent and pressure from the negative fundamentals; March Paris was down .4% and May London was up .5%.

Cattle futures gain as hogs and bellies lose

Live cattle contracts settled 47 to 125 points higher on the Chicago Mercantile Exchange on Monday. The combination of strong upward commercial demand as well as support from non commercial or investment interest led to the sharp rally. Spreading and fund buying were the main features and April led the charge and hit a nine month top along the way. April settled 125 points higher at 94.20, and the June was up 70 points at 92.27.

Feeder cattle followed the lead of the live pit and ended 32 to 100 points higher with several months reaching new contract highs. Spreading was the main feature of the session in the feeder pit. March was up 32 points at 102.52, and April was 77 higher at 106.00.

Activity in the feedlots was limited to the assessment of the new show lists. Ready numbers of cattle look generally smaller than last week, a positive surprise given the slower country movement and slaughter last week. Official trade volume totals on Friday were no better than moderate. Last week’s negotiated sales were confirmed at only 128,241 head. Processing margins are narrowing and that could force packers to slow chain speed through the week in order to pry more money from retailers. Early asking prices are around 94.00 in the South, and 147.00 to 148.00 in the North. Monday’s slaughter is estimated at 120,000 head, 2,000 less than last week and 2,000 more than last year.  Boxed beef cutout values ended the day steady to weak on light to moderate demand and offerings. Choice beef was down .30 at 149.29, and select was unchanged at 148.11.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 15,600 head. Compared to last week, feeder steers and heifers were steady to 1.00 lower at midsession. Stocker cattle and calves were lightly tested and steady. Demand was moderate to good for feeder cattle and the supply included less thin fleshed cattle suitable for grazing. Feeder steers medium and large 1 weighing 500 to 600 pounds traded from 112.00 to 122.75. 5 to 6 weight heifers brought 105.00 to 112.00 per hundredweight at Oklahoma City.

Barrows and gilts in the Iowa/Minnesota direct trade closed .41 higher at 73.53 on a carcass basis, the West was up .54 at 73.51, and select was up .13 at 70.90.The Missouri direct base carcass meat price closed 1.00 to 2.00 higher from 65.00 to 67.00. Monday’s hog slaughter was estimated at 414,000 head. 15,000 less than last week, and 5,000 down from last year. Last week’s hog kill was estimated at 2,168,000 head, down 2.6 percent compared to the same period last year. The combination of reduced slaughter and lighter carcass weights has caused pork production to be down 6.9 percent so far in 2010.

Lean hogs settled 32 higher to 42 points lower with only a couple of the deferred months showing gains. Traders are concerned about the wholesale values of pork as well as general unrest in the demand side of the market. April ended 30 points lower at 72.80, and May was down 22 at 78.80. Pork trading was very slow to slow with mostly light demand and offerings. Pork carcass cutout was down .99 at 74.72.

Pork bellies settled lower in a light trade with only May trading. The sluggish trade in the lean hog market as wells as lackluster trade through the stock market left belly futures very quiet. May was down 97 points at 92.02.

Closing Grain and Livestock Futures: March 8, 2010

March corn closed at $3.64 and 1/2, down 1/4 cent
March soybeans closed at $9.40 and 1/2, up 5 and 3/4 cents
March soybean meal closed at $259.50, up $1.60
March soybean oil closed at 39.95, up 23 points
March wheat closed at $4.84 and 1/2, up 2 and 1/4 cents
April live cattle closed at $94.20, up $1.25
April lean hogs closed at $72.80, down 30 cents
April crude oil closed at $81.87, up 37 cents
March cotton closed at 82.15, down 38 points
March Class III milk closed at $12.78, down 11 cents
Dow Jones Industrial Average: 10,552.52, down 13.68 points

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