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Soybean Futures Prices Drop After USDA Reports

Tuesday's Closing Grain + LIvestock Futures Prices.

Sep. corn closed at $3.58 and 1/2, up 1 and 3/4 cents
Aug. soybeans closed at $12.90, down 24 and 3/4 cents
Aug. soybean meal closed at $400.20, down 20 cents
Aug. soybean oil closed at 34.62, down 26 points
Sep. wheat closed at $5.38, down 8 and 1/2 cents
Aug. live cattle closed at $149.62, down $3.00
Aug. lean hogs closed at $114.07, down 47 cents
Sep. crude oil closed at $97.37, down 71 cents
Oct. cotton closed at 63.03, down 110 points
Aug. Class III milk closed at $22.02, up 15 cents
Aug. gold closed at $1,308.80, up 30 cents
Dow Jones Industrial Average: 16,560.54, down 9.44 points

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Ag Market News and Commodity Comments

Soybeans were lower on fund and technical selling. USDA projects beans at a record 3.8 billion bushels and average yield of 45.4 bushels per acre. Also, old and new crop ending stocks were up a little more than expected. Soybean meal and oil were lower, following the lead of soybeans. At the weekly state soybean auction, China sold 82,489 tons, 23%, of soybeans offered, with levels improving from last week thanks to strong demand. Since the series of auctions started in May, Beijing has sold 1.89 million tons of soybeans from reserves.

Corn was firm on technical buying, seeing an oversold bounce. Corn’s also looking at a potential record crop of 14 billion bushels with an average yield of 167.4 bushels per acre. Ending stocks were above last month’s levels, but not as much as expected, and the average yield number was smaller than anticipated. Ethanol futures were higher. France’s agriculture ministry estimates 2014 corn production at 15.443 million tons, 2.7% more than a year ago, with 15.105 million tons for grain use.

The wheat complex was lower on fund and technical selling. All wheat production is pegged at just over 2 billion bushels with an average yield of 43.1 bushels per acre. Also, U.S. and world ending stocks were up from last month. Russia has announced plans to increase wheat exports to Egypt, up to 5 million to 5.5 million tons, with Moscow also buying other agricultural goods from Cairo, as a measure to offset some impact of recent trade sanctions. UkrAgroConsult has raised its 2014/15 grain export projection for Ukraine to 32.5 million tons, thanks to better than expected wheat and barley production. France’s ag ministry expects soft wheat production to be 37.298 million tons, up 1.2% from 2013. DTN reports South Korea’s Nonghyup Feed Inc. passed on all offers from their recent tender for 55,000 tons of optional origin feed wheat.

Private sources reported a limited cattle trade in Nebraska and Iowa on Tuesday morning, but overall cash activity was generally quiet in the afternoon. The small sample of dressed sales in the North appeared to be 3.00 to 4.00 lower than last week. Asking prices are not well defined, especially given the bleak way futures closed. Earlier in the day some showlists were priced around 162.00 plus in the South and 253.00 to 255.00 in the North. The cattle kill was estimated at 116,000 head, 1,000 more than last week, but 7,000 less than last year.

Boxed beef cutout values were lower on choice and higher on select on light to moderate demand and offerings. Choice beef was down 1.29 at 258.15, and select was 1.51 higher at 253.13.

Live cattle futures contracts on the Chicago Mercantile Exchange settled 80 to 300 points lower. Short and long term liquidation was seen despite higher beef values at midday. Traders looked for additional direction from outside markets, but even the post report stability in the corn complex had very little impact on drawing buyers back into the market. August was down the daily limit of 3.00 at 149.62 and October was 2.77 lower at 147.67.

Feeder cattle settled 240 to 297 points lower in a relatively light trading range. It appeared that selling interest slowed near midday, the rebound from early lows in the corn markets did spark another round of selling interest in both nearby and deferred feeder cattle futures. DTN reports the inability for cattle markets to hold onto gains seen Monday has the potential to draw additional aggressive liquidation from both commercial and noncommercial traders. August settled 2.92 lower at 214.55, and September was down 2.77 at 214.65.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 4500 head. Compared to last week, feeder steers and heifers weighing under 800 pounds traded mostly 6.00 to 10.00 lower. Feeders over 800 pounds traded 2.00 to 5.00 lower. Calves were mostly 10.00 to 20.00 lower on a light test. The quality was typical of the summer, plain to average. Feeder steers medium and large 1 averaging 787 pounds brought 217.80 per hundredweight. 777 pound heifers averaged 204.79.

Lean hogs settled 47 to 300 points in the red. With August contracts due to expire on Thursday, the focus of front month traders was on the October contracts. The softness in both cash hog prices as well as weakness in pork values has turned the market extremely bearish. Traders remain concerned about demand growth as supply issues are being overlooked for the time being. August settled .47 lower at 114.07, and October was down 3.00 at 97.17.

Barrows and gilts in the Iowa/Minnesota direct trade closed 3.30 lower with a weighted average of 110.46 on a carcass basis, the West was down 3.06 at 110.49, and the East was not reported due to confidentiality. Missouri direct base carcass meat price close 1.00 to 4.00 lower from 104.00 to 105.00. Butcher hogs in the Midwest on a live basis were steady to 2.00 lower from 77.00 to 88.00.

The pork carcass value was down 3.50 at 117.20 FOB plant, while bellies were modestly higher hams and loins were lower.

Beef prices are trading at record levels for this time of year and with the expectation that fed cattle supplies will remain tight heading into the fall; one can easily surmise that beef prices will continue to hold at lofty levels, making fresh pork a more sensible choice for the budget conscious consumer.

Tuesday’s hog kill was estimated by USDA at 408.000 head, 8,000 more than last week, but 11,000 less than last year.

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