Monday’s Closing Grain and Livestock Futures
Mar. corn closed at $4.02, up 1 and 3/4 cents
Jan. soybeans closed at $10.13 and 1/2, down 38 cents
Jan. soybean meal closed at $356.50, down $7.30
Jan. soybean oil closed at 32.45, down 109 points
Mar. wheat closed at $5.55 and 1/2, down 8 and 1/4 cents
Feb. live cattle closed at $160.45, down 15 cents
Feb. lean hogs closed at $76.65, down $2.37
Feb. crude oil closed at $46.07, down $2.29
Mar. cotton closed at 59.73, down 103 points
Jan. Class III milk closed at $16.07, up 10 cents
Jan. gold closed at $1,232.70, up $16.70
Dow Jones Industrial Average: 17,640.84, down 96.53 points
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Market News Recap
Soybeans were lower on fund and commercial selling. USDA confirmed record soybean production and yield, with numbers both up from November’s estimates. Also, ending stocks were unchanged, quarterly stocks were up 17%, and USDA raised the production guess for Brazil. Soybean meal and oil followed beans lower. According to DTN, South Korea purchased 55,000 tons of soybean meal from an unnamed seller.
Corn was higher on fund and commercial buying. There was a record corn crop last year, but USDA says production and yield were smaller than the November projections. U.S. ending stocks were down on the month and quarterly stocks were up 7%. USDA’s next set of supply and demand numbers is out February 10, and quarterly stocks and prospective planting estimates are out March 31. Ethanol futures were lower.
The wheat complex was lower on fund and speculative selling, along with the higher dollar. U.S. winter wheat planting was down 5%, quarterly stocks were up 3%, and ending stocks were larger than last month. USDA also raised world production and ending stocks estimates. In other words, USDA just once again confirmed the bearish fundamental outlook on wheat. DTN reports South Korea bought 266,000 tons of hard wheat and Turkey picked up 60,000 tons of hard wheat from unnamed sources.
Cattle country is quiet on Monday afternoon with bids and asking prices not well defined. A few early showlists have been priced around 170.00 to 172.00 in the South and 275.00 plus in the North. The new showlists appear to be generally larger than last week with only Texas showing fewer ready steers and heifers. Some hedgers may be tempted to sell cattle steady to lower given the extraordinarily strong basis. The kill totaled 111,000 head, 5,000 more than last week, but 8,000 below last year.
Boxed beef cutout values were sharply higher on good demand and moderate offerings. Choice beef was up 1.99 at 258.78, and select was 2.15 higher at 250.38.
Chicago Mercantile Exchange live cattle contracts settled 102 points higher to 15 lower with only February and April lower. The deferred contracts were better supported than the nearby issues. John Harrington at DTN said, this seemed somewhat strange given the significant advances when seen over the last week in cash and cutouts. February settled .15 lower at 160.45, and April was down .07 at 159.35.
Feeder cattle ended the session 75 to 105 points higher. Triple digit gains dominated the feeder pit as bears took some money off the table. Unfortunately, given last week’s sustained crash, a one day rally won’t do much to change the immediate technical picture. January was up .97 at 223.40, and March was .75 higher at 213.30.
Feeder cattle receipts at the Joplin Regional Stockyards on Monday totaled 7,000 head. Compared to last Monday’s sale, steers weighing less than 700 pounds and heifers under 600 pounds were steady to 5.00 lower, heavier weights trended 5.00 to 8.00 lower. Demand was moderate to good and the supply was moderate to heavy. Feeder steers, medium and large 1 weighing 600 to 700 pounds ranged from 228.00 to 259.00. 6 to 7 weight heifers brought 213.00 to 227.00.
Lean hogs settled 75 to 237 points in the red. The complex was under significant pressure tied to both commercial and speculative selling. Slaughter numbers compared to 2014 seem to be growing in a way that supports some of the bearish implications of the December 1 hogs and pigs report. In short, the greater supplies look compared to 2014, the less traders are worried about the devastating potential of PEDv. February settled 2.37 lower at 76.65 and April was down 2.35 at 77.70.
There was slow hog market activity with light demand. Barrows and gilts in the Iowa/Minnesota direct trade closed .34 higher at 72.52 weighted average on a carcass basis, the West was up .23 at 72.42, and the East was not reported due to confidentiality. Missouri direct base carcass meat price was a 1.00 lower from 62.00 to 68.00. Midwest hogs on a live basis were steady to 3.00 lower from 47.00 to 55.00.
The pork carcass cutout value FOB plant was 1.14 lower at 82.82, only butt and picnic primals were higher.
Given the fact that lean hog prices are now at or below where they were as we started out 2014 with less than a normal seasonal advance in prices built into the spring and summer trading months, the board now seems more vulnerable to a bullish surprise than a bearish one. Additionally, the February seasonal index suggests a strengthening market from now through expiration.
Monday’s hog slaughter was estimated at 455,000 head 23,000 more than last week, and 25,000 greater than last year.
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