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Corn Prices Lower on Big Supply Concerns (Dec 13, 2013)

Friday's Closing Grain and Livestock Futures
Dec. corn closed at $4.20 and 1/2, down 7 and 3/4 cents
Jan. soybeans closed at $13.27 and 1/2, up 3 and 3/4 cents
Dec. soybean meal closed at $462.90, up $3.50
Dec. soybean oil closed at 39.47, down 33 points
Dec. wheat closed at $6.18 and 1/4, down 4 and 1/4 cents
Dec. live cattle closed at $131.87, down 37 cents
Dec. lean hogs closed at $81.25, down 7 cents
Jan. crude oil closed at $96.60, down 90 cents
Mar. cotton closed at 83.22, up 16 points
Dec. Class III milk closed at $19.02, up 10 cents
Dec. gold closed at $1,235.70, up $9.70
Dow Jones Industrial Average: 15,755.56, up 15.93 points

For additional futures prices visit http://www.farms.com/markets

Market News Report

Soybeans were mixed in old crop/new crop spread trade, with nearbys up and deferreds down in late consolidation trade. There’s more talk that China either has canceled or will cancel U.S. soybean purchases, but nothing has surfaced as of yet. Crop development conditions in South America generally look good and even if parts of Brazil are dry, there’s a long way to go for the South American crop. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. The National Oilseed Processors Association’s November crush report is out Monday at Noon Eastern/11 AM Central and, on average, analysts see the crush by NOPA members at 158 million to 170 million bushels, with an average of 162.3 million bushels.

Corn was lower on technical and fund selling. The Senate proposal that would repeal the ethanol mandate, the expected record crop this year, and large ending stocks estimates were bearish factors for corn. Domestic demand is good and farmers are still reluctant to sell, but with this large of a supply, it’s hard to generate much momentum. According to Reuters, barge freight rates on rivers in the central Midwest are at three week highs due to low water and icy river conditions. Ethanol futures were lower on demand uncertainties. There is some talk China may cancel recent DDG purchases, but no confirmation.

The wheat complex was lower on fund and technical selling, along with the higher dollar. There was no real fresh news for the complex and the trade’s continuing to focus on larger world production totals with Argentina and Australia both harvesting right now. The U.S. winter crop is dormant, with generally good conditions. CBH Group, via Dow Jones Newswires, estimates Western Australia’s 2013/14 grain crop at 14.5 million tons, solidly above average thanks to widespread spring rainfall.

USDA mandatory reported that the cattle trade was slow to develop this week. Cattle traded in the South Plains 1.00 lower at 131.00. A large string of steers and heifers sold in Nebraska at 130.00 that would be nearly 2.00 lower than last week’s weighted average for the state. DTN reports some dressed business in the North at 206.00 to 207.00, 2.00 to 3.00 lower than the previous week’s weighted average basis Nebraska. The weekly cattle slaughter is estimated at 608,000 head, down 21,000 from the previous week, and 33,000 smaller than 2012.

Boxed beef cutout values were lower on the choice, firm on select on light demand and light to moderate offerings. Choice boxed beef was down 1.56 at 198.89, and select was up .39 at 187.01.

Live cattle contracts settled 10 to 62 points lower on the Chicago Mercantile Exchange on Friday. Pressure developed through the complex through the morning. The lack of support through the end of the week is not surprising given the pressure in choice beef markets. But the inability to do anything with Thursday’s buyer support caused many to take a deeper look at just how much longer-term support can be developed before the end of the year. December settled .37 lower at 131.87, and February was .25 lower at 132.85.

Feeder cattle finished the session almost flat. Feeder cattle appeared to be the shining star of the livestock market on Thursday, but the light from the star quickly dimmed on Friday. Even though the corn markets eroded, through the morning trade, initial stability was replaced by moderate losses in the nearby feeder contracts. Traders also focused on the weakness in beef values. Both nearby contracts were unchanged with the January at 167.07, and March at 166.55.

Feeder cattle receipts at Missouri auctions this week totaled 17,015 head. Compared to the previous week, feeder steer and heifer calves sold steady to 5.00 higher, and yearlings sold mostly steady. The supply was much lighter as a heavy batch of winter weather swept across the southern third of the state. Auctions on or south of the I-44 line were either cancelled or had very limited offerings. Feeder steers medium and large 1 averaging 624 pounds brought 179.36 per hundredweight. 665 pound heifers traded at 159.75.

Lean hogs settled 7 to 90 points lower Support through the lean pit on Thursday was short lived with traders once again focusing on moderate to strong liquidation ahead of the weekend. February futures led the market lower for most of the session and extending the charted trend lower. Very little technical support is seen below this point and could allow for additional market pressure through the end of the year. December expired at noon and settled .07 lower at 81.25 and February was down .82 at 87.17.

There was slow hog market activity with light demand on Friday, Barrows and gilts in the Iowa/Minnesota direct trade closed 2.07 lower at 76.25 on a carcass basis, the West was down 1.85 at 76.26, and the East closed .24 higher at 78.32. Missouri direct base carcass meat price was steady from 73.00 to 75.00.

The pork carcass value was down 1.15 at 86.98 FOB plant in the afternoon report.

The weekly hog slaughter was estimated at 2,311,000 head, 9,000 less than last week, but 14,000 more than last year.

 

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