Corn, Soy & Wheat Futures Prices Slide Lower. (May 16, 2014)

Friday's Closing Grain & Livestock Futures Prices

Jul. corn closed at $4.83 and 3/4, down 3/4 cent
Jul. soybeans closed at $14.65, down 5 and 1/4 cents
Jul. soybean meal closed at $480.20, down $1.20
Jul. soybean oil closed at 40.75, down 29 points
Jul. wheat closed at $6.74 and 1/4, down 4 cents
Jun. live cattle closed at $137.90, up 50 cents
Jun. lean hogs closed at $118.92, down 50 cents
Jun. crude oil closed at $102.02, up 52 cents
Jul. cotton closed at 89.82, down 54 points
Jun. Class III milk closed at $20.49, down 8 cents
Jun. gold closed at $1,293.40, down 20 cents
Dow Jones Industrial Average: 16,491.31, up 44.50 points

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Market News Review

Soybeans were mostly modestly higher on old crop/new crop spread trade. It looks like beans were in consolidation mode, keeping an eye on the tight near term supply and the planting pace. China bought 40,000 tons of old crop U.S. bean oil and unknown picked up 180,000 tons of new crop U.S. beans. That oil buy from Beijing is more than likely indicative of their poor crush margins. Soybean meal was mixed, following the lead of beans, and bean oil was down on profit taking.

Corn was mostly firm on late spillover from beans. It was a wet and cool end to the week for parts of the Midwest, but forecasts for the coming week generally look warmer and drier. Past that – there was no real fresh fundamental news. Ethanol futures were higher.

The wheat complex was lower on fund and speculative selling. The trade’s continuing to largely shrug off drought in the Southern Plains and the slow planting pace in the Northern Plains. Soft red winter remains in comparatively good condition. Chicago was also disappointed by Egypt buying wheat from Ukraine after tendering for U.S. wheat.

The cash cattle market was very quiet on Friday afternoon and business was pretty much wrapped up for the week. Trade volume totals look rather small, suggesting that producers will carryover a certain number of cattle into Monday. On the other hand, packers may be forced to start the week especially close to the knife. Live cattle in the North traded from 146.00 to 147.00. And dressed sales ranged from 234.00 to 235.00. Southern live sales were mostly at 145.00. USDA estimated the weekly cattle kill at 591,000 head, 9,000 less than the previous week and down 63,000 from last year.

Boxed beef cutout values were firm to higher on moderate demand and light to moderate offerings. Choice boxed beef was up .77 at 225.98, and select is up 1.24 at 216.71.

Live cattle contracts on the Chicago Mercantile Exchange settled 10 to 60 points higher on Friday. Support came from aggressive buyer interest surging into the feeder cattle futures. The traders focus late in the session appeared to be cattle on feed report that was released after the close of trade, the report had been expected to be slightly bullish, or at least if the numbers aligned with the pre-report guesses. June settled .50 higher at 137.90, and August was up .55 at 138.37.

Feeder cattle contracts ended 7 to 115 points higher. A new round of buyer support stepped into the market near midday, helping to push prices firmly higher. Most of the renewed activity was associated with pre-report positioning ahead of the cattle on feed report. The on feed report was somewhat friendly. Placements were down 5%, marketing’s in April down 2%, and total on feed down 1%. May settled 1.15 higher at 187.30, and August was up .90 at 193.32.

Feeder cattle receipts at Missouri auctions this week totaled 28,355 head. Compared to the previous week, feeder steers were mostly steady to 4.00 higher. Feeder heifers trended 2.00 to 6.00 higher. Where some local markets were seen with higher trends or more active markets, this jump was mostly attributable to a desirable weight class or condition. The supply was good and demand was good to moderate. 1277 head of feeder steers medium and large 1 averaging 521 pounds brought 234.69 per hundredweight. 701 heifer’s averaging 522 pounds brought 207.45.

Lean hogs settled unchanged to 50 points lower. The inability to improve pork market fundamentals significantly over the last few days created some late week pressure in the nearby lean futures. June settled .50 lower at 118.92, and July was down .10 at 125.25.

Barrows and gilts in the Iowa/Minnesota direct trade closed .85 lower at 108.96 weighted average on a carcass basis, the West was down .83 at 108.81, and the East was not reported due to confidentiality. Missouri direct base carcass meat price was steady from 97.00 to 100.00. Terminal hogs were steady from 72.00 to 80.00.

The pork carcass cutout value was up .96 at 114.19 FOB plant. Bellies, loins and ribs were all higher.

The surging price of pork is also seriously challenging the strength of consumer spending. The average price of retail pork in April totaled $3.95, 12 cents greater than the March average and 44.3 cents higher than 2013.

The weekly hog slaughter was estimated at 1,999,000 head, 17,000 less than last week, and down 38,000 from last year.


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