Market News

Soybean, cattle futures higher Friday

Soybeans were higher on commercial and technical buying. Beans were a little oversold and due for a bounce, with help from higher moves in soybean meal and oil. That bounce in bean oil came despite another decline in crude oil and the extremely bearish week for palm oil futures. Vegetable oil prices have been hit hard by concerns about demand from China linked to Beijing’s zero-COVID policy and, more generally, the uncertainties about the global economy. The trade is monitoring favorable near-term conditions in most of Argentina and Brazil. The USDA’s next set of supply and demand estimates is out December 9^th, with CONAB’s updated outlook for Brazil scheduled for December 8^th.

Corn was mixed on bull spreading, with nearby contracts up and deferred months down. Even as export demand remains slow due to high prices relative to major competitors, like Brazil and Ukraine, domestic demand for feed and fuel use is strong. Mexico has been a big buyer of U.S. corn recently, but sustained demand is a question mark because of that nation’s GMO ban scheduled to go into effect in 2024. There’s rain in the forecast for South America ahead of a return to drier conditions in Argentina.

The wheat complex was lower on fund and technical selling. The complex continued to react to the extension of the Black Sea grain export agreement. Still, a lot of the Friday finish was just the generally bearish tone right now for U.S. wheat. Most forecasts continue to show expanding drought conditions in much of the U.S. Plains. There’s the potential for that drought to expand further east. Ahead of most of the crop fully entering dormancy, the USDA’s winter wheat condition rating is near multi-year lows. Drought is impacting production in Argentina, while heavy rainfall in Australia is lowering crop quality.

Live and feeder cattle futures were higher, getting ready for the USDA’s on feed report. The numbers might even be a little bit more bullish than what analysts were expecting heading into the report, with October placements a record monthly low and below many pre-report projections.

Direct cash cattle markets were quiet Friday following the mostly moderate activity earlier in the week. Some buyers were likely trying to get ahead of Thanksgiving. Business was mainly at $150 to $152 live, steady to $2 higher than the previous week, and mostly $242 dressed, about steady. Asking prices for what’s left were $153+ live and $244+ dressed.

Boxed beef closed mixed with moderate movement. Choice was down $2.23 at $254.87 and Select beef was up $1.09 at $232.83. The estimated cattle slaughter of 125,000 head was up 5,000 on the week and 3,000 on the year.

Hog futures were lower on pork demand uncertainties, unable to generate any real buying interest at the end of the week. The industry is continuing to monitor holiday demand signals. The cold storage numbers for October are out on Tuesday, the 22^nd.

Cash hogs closed mixed with typically end-of-the-week light closing negotiated numbers at the major direct markets. National direct closed $1.46 lower with a base price range of $77 to $90 for a weighted average of $81.81, but Iowa/Southern Minnesota was $.32 higher at $85.40 and the Western Corn Belt was up $.05 at $84.87. Midwest butcher hog markets are closed.

Pork closed $.81 higher at $93.44. Loins, butts, picnics, and bellies were higher with ribs and hams lower. The estimated hog slaughter of 487,000 head was up 37,000 on the week and 13,000 on the year.