Wednesday's Closing Grain and Livestock Futures
Mar. corn closed at $4.25, down 1 and 3/4 cents
Jan. soybeans closed at $13.24, down 22 and 1/2 cents
Jan. soybean meal closed at $441.20, down $6.80
Jan. soybean oil closed at 39.06, down 25 points
Mar. wheat closed at $6.12 and 3/4, down 7 cents
Dec. live cattle closed at $130.95, down 80 cents
Feb. lean hogs closed at $86.35, up 70 cents
Jan. crude oil closed at $97.80, up 58 cents
Mar. cotton closed at 83.00, up 5 points
Jan. Class III milk closed at $19.22, up 10 cents
Dec. gold closed at $1,236.10, up $4.90
Dow Jones Industrial Average: 16,167.97, up 292.71 points
Soybeans were lower on technical and fund selling. The trade’s watching hot, dry weather in Argentina and southern Brazil, but that’s really too early in their season to have too much of an impact. Chinese demand has been good, but if South America has a record crop as expected, they could cancel purchases. Soybean meal and oil were lower on the bearish tone in the bean pit. Informa sees 2014 U.S. soybean acreage at 81.9 million acres, compared to their previous projection of 83.8 million, with the crop at 3.603 billion bushels. USDA’s weekly export sales report is out Thursday at 8:30 AM Eastern/7:30 AM Central. Soybeans are placed at 700,000 to 1 million tons, meal is seen at 125,000 to 375,000 tons, and oil is pegged at 0 to 40,000 tons.
Corn was lower on fund and technical selling. Corn was up early but couldn’t follow through with a private firm projecting increased U.S. acreage next year. Informa estimates 2014 U.S. corn acreage at 91.8 million acres, compared to the prior guess of 91.5 million, with a crop of 13.741 million bushels. Still, contracts have managed to find a lot of support over the past week and a half, with lower prices attracting improved commercial and export demand. Ethanol futures were higher. According to Reuters, China has rejected “more than 600,000 tons” of U.S. corn this year due to GMO content. Dow Jones Newswires reports new construction at the Panama Canal could lower U.S. shipping costs to Asia by 12%. Weekly U.S. corn sales are expected to be between 450,000 and 750,000 tons.
The wheat complex was lower on fund and technical selling. The trade’s continuing to absorb the recent record high Canadian crop number and USDA’s larger world production estimate. Fundamentals are neutral, but wheat may have to sell off further to find support. Informa Economics estimates 2014 U.S. wheat acreage at 57.9 million acres, compared to their previous projection of 58.1 million, with winter wheat at 42.866 million acres and total production of 2.339 billion bushels. USDA’s first 2014 winter wheat acreage estimate is out January 10. DTN reports Iran bought “about” 250,000 tons of Mexico origin durum and 180,000 tons of Baltic Sea region wheat. Weekly U.S. wheat sales are estimated at 300,000 to 500,000 tons.
Cattle country was at a virtual standstill on Wednesday without even a token bid on the table. Asking prices are around 135.00 plus in the South, and 210.00 in the North. Significant trade volume could be delayed until Friday. It is possible we won’t see cash action until after the on feed report is released Friday afternoon. The cattle slaughter was estimated at 122,000 head, even with last week, but 4,000 smaller than a year ago.
Boxed beef cutout values were steady to weak on light to moderate demand and offerings. Choice beef was down .25 at 198.18 and select was .40 lower at 188.38.
Live cattle contracts on the Chicago Mercantile Exchange settled 52 to 80 points lower as light to moderate pressure developed through the complex on Wednesday. Contacts held their losses despite light gains in the boxed beef values at midday and firm support in the lean hog pit. Traders remained cautious about the direction of corn markets over the near term as well as a lack of follow through support in the feeder cattle pit. DTN analysts say a significant break away from recent market highs, could indicate a top has been set in the market and create further liquidation. December settled .80 lower at 130.95, and February was down .62 at 132.35.
Feeder cattle ended the session 32 to 110 points lower on the lack of additional aggressive corn market pressure and soft live cattle markets and that created additional liquidation in nearby contracts. Continued softness in the market could create longer term pressure through the complex that could lead to even more significant liquidation ahead of the holidays. January settled 1.10 lower at 166.50, and March was down .52 at 165.85.
Feeder cattle receipts at the Loup City Commission Company at Loup City, Nebraska totaled 1700 head on Tuesday. Compared to last week on comparable offerings, 500 to 650 pound steers and heifers sold 4.00 to 6.00 higher. Demand was good from a large crowd of buyers. Most of the calves were long time weaned, a few bawlers with spring time only shots sold in the run. 200 head of feeder steers averaging 770 pounds brought 166.16 per hundredweight. 96 heifers weighing 645 traded at an average of 165.16.
Lean hogs settled 37 to 102 points higher. It is uncertain if lean hog futures have officially turned the corner and have drawn enough support back into the complex to counter previous bearish market shifts, but aggressive gains continued to hold through the session. The strong close in nearby hog contracts could spark additional commercial buying and also draw additional investment into the market through the end of the week. February was .70 higher and settled at 86.35, and April was up .75 at 91.17.
There was slow to moderate hog market activity with light demand on Wednesday afternoon. Barrows and gilts in the Iowa/Minnesota direct trade closed 1.43 lower at 76.79, the West was down 1.48 at 76.62, and the East was up .06 at 77.91. Missouri direct base carcass meat price closed steady from 73.00 to 74.00. Terminal hogs were steady to an instance of 2.00 lower from 53.00 to 56.00.
The pork carcass value ended 1.98 lower at 89.05 FOB plant.
Hog slaughter was estimated at 435,000 head, 5,000 more than last week, and 3,000 greater than last year.