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Soybean Futures Prices Continue Decline; Wheat Lower

Wednesday's Closing Grain + LIvestock Futures Prices.

Sep. corn closed at $3.58, down 1/2 cent
Aug. soybeans closed at $12.64 and 1/2, down 25 and 1/2 cents
Aug. soybean meal closed at $418.70, up $18.50
Aug. soybean oil closed at 33.95, down 67 points
Sep. wheat closed at $5.28, down 10 cents
Aug. live cattle closed at $148.22, down $1.40
Aug. lean hogs closed at $115.20, up $1.12
Sep. crude oil closed at $97.59, up 22 cents
Oct. cotton closed at 64.02, up 99 points
Aug. Class III milk closed at $22.05, up 3 cents
Aug. gold closed at $1,312.80, up $4.00
Dow Jones Industrial Average: 16,651.80, up 91.26 points

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Ag Market News and Commodity Comments

Soybeans were lower on fund and technical selling. Traders continued to digest USDA’s record crop production estimate and increased ending stocks. Crop conditions are good and forecasts are non-threatening, but parts of the Midwest would like rain, and for that matter, some areas will need to see warmer temperatures. Soybean meal was mixed, adjusting old crop/new crop spreads, and bean oil was lower, following beans. August contracts expire Thursday.

Corn was mostly firm, seeing an oversold bounce. Tuesday’s USDA numbers were nominally bearish, but still less than what the trade was expecting. Also, there was some new demand Wednesday, as Mexico bought 107,600 tons of new crop U.S. corn and unknown picked up 130,000 tons of new crop U.S. Ethanol futures were higher. According to the EIA, ethanol production for the week ending August 8 averaged 931,000 barrels per day, up 29,000 on the week. Ethanol stocks totaled 17.8 million barrels, down nearly 3% from the prior week and the lowest in 11 weeks.

The wheat complex was lower on fund and technical selling. The trade’s watching Europe’s crop quality concerns, but aside from that, there aren’t many major issues around the world. In any event, the overall fundamentals for wheat remain bearish, both domestically and internationally, which was just reinforced by Tuesday’s reports. Israel is tendering for 25,000 tons of feed wheat.

Cattle country was quiet on Wednesday afternoon following a light trade in parts of the North in the morning. Dressed prices were generally steady to weak with Tuesday from 243.00 to 245.00. There were a few live sales at 155.00. Both buyers and sellers seem to be confused by sharply lower futures. Just as sellers were reluctant to price cattle when the market was storming higher earlier this summer, buyers seem nervous about bidding on cattle given the new negative psychology. The kill totaled 115,000 head, even with last week, but 8,000 below a year ago.

Boxed beef cutout values closed lower to sharply lower on light to moderate demand and moderate to heavy offerings. Choice beef was down 1.27 at 256.88 and select was 3.58 lower at 249.55.

Chicago Mercantile Exchange live cattle contracts settled unchanged to 1.40 points lower. Continued weakness in the cash markets created some concern about the ability to sustain current price ranges. Boxed beef prices were lower in the morning report adding additional pressure to the market. August settled 1.40 lower at 148.22, and October was 1.12 lower at 146.55.

Feeder cattle ended the session 17 to 110 points lower as follow through pressure was evident as live cattle futures remained under pressure. Nearby cattle traders took protection in the event of additional long-term softness through the entire livestock complex. August settled .17 lower at 214.37 and September was down 1.10 at 213.55.

Feeder cattle receipts at the Loup City, Nebraska Commission Company totaled 4420 head on Tuesday. This was the first reported sale in recent weeks so a trend is not available. A large crowd was on hand for the annual BBQ auction. Bidding was active most of the day even after the Chicago Mercantile Exchange cattle closed sharply lower. Feeder steers medium and large 1 averaging 787 pounds brought 226.53 per hundredweight. 720 pound heifers averaged 213.83.

Lean hogs settled 15 to 112 points higher. Moderate buyer support redeveloped through the lean hog futures as traders focused on the potential for short covering following aggressive losses on Tuesday. Although there is very little additional direction in both cash markets and pork values at midweek, longer term support could be drawn back into the complex. Soon to expire August was up 1.12 at 115.20, and October was .22 higher at 97.40.

Barrows and gilts in the Iowa/Minnesota direct trade closed 2.97 lower, the West was down 3.03 with a weighted average of 107.46 on a carcass basis in both regions. Eastern direct trade was not reported due to confidentiality. Missouri direct base carcass meat price was 1.00 to 2.00 lower at 103.00. Barrows and gilts at Midwest markets were steady to 2.00 lower live from 75.00 to 99.00.

Though totaling somewhat below trade expectations, the Aug. 1 estimate of the growing corn crop was record large at 14.032 billion bushels. Cheap corn should further stimulate meat expansion plans over the year ahead, and work to keep carcass weights heavy.

The pork carcass cutout value FOB plant was down 2.54 at 114.88. With bellies and hams significantly lower.

Wednesday’s hog slaughter is estimated at 408,000 head, 3,000 more than last week, but 20,000 less than last year.

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