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Soybean Futures Prices Soar On Spec Buying.

Wednesday's Closing Grain & Livestock Futures Prices

Dec. corn closed at $3.75 and 1/4, up 10 and 3/4 cents
Nov. soybeans closed at $10.43, up 35 cents
Dec. soybean meal closed at $397.20, up $22.10
Dec. soybean oil closed at 34.18, up 139 points
Dec. wheat closed at $5.38 and 1/4, up 7 and 1/2 cents
Oct. live cattle closed at $169.00, down 20 cents
Dec. lean hogs closed at $88.60, down $1.60
Nov. crude oil closed at $82.04, up 62 cents
Dec. cotton closed at 65.31, up 84 points
Nov. Class III milk closed at $21.37, up 6 cents
Nov. gold closed at $1,229.00, up 10 cents
Dow Jones Industrial Average: 16974.31, down 31.44 points

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Ag Market News And ReCap:

There were large gains in soybean futures on Wednesday.  The gains extended to soybean meal and soybean oil.  DTN says its weather forecast will make harvest a breeze for the next 10 days with the exception of light shower chances in the eastern Midwest. However, January soybeans are now paying more attention to the demand side.  In addition, December soybean meal and soybean oil posted their best gains in several weeks. Some of the soybean oil demand is the result of news that Malaysia will gradually increase its biodiesel mandate for palm oil from 5 percent to 7 percent, beginning in November.

One would have to look back a couple of months or so to find a December corn settlement as high as it was on Wednesday.  That’s in spite of Corn Belt weather being favorable for the harvest of this year’s record 14.48 billion bushel crop.  The market seems to be favoring demand and possibly fewer acres of corn in 2015. Also bullish is that ethanol production increased while inventories of the corn-based renewable fuel actually fell, pointing to increased ethanol exports and a sign of better corn demand.  Exports of corn itself is another bullish sign, so far they’re 141 percent above a year ago.

Chicago wheat posted gains Wednesday with light rain in the forecast for the eastern Midwest, meaning planting delays for winter wheat in Illinois and Missouri.  There are concerns about dry conditions in Australia and in Russia, but not enough to expect significantly boost wheat prices yet. The stronger U.S. dollar also has the effect of making U.S. wheat less competitive on the world market.

Cattle country was quiet on Tuesday and significant trade is not expected much before the end of the week. Although asking prices are not well defined, some cattle have been priced around 172.00 to 173.00 in the South and 270.00 plus in the North. The kill totaled 114,000 head, 1,000 below last week, and 9,000 smaller than a year ago.
Boxed beef cutout values are higher on moderate demand and light offerings. Choice boxed beef is 2.36 higher at 251.56, and select is up 3.11 at 239.10.

Chicago Mercantile Exchange live cattle contracts settled 5 to 50 points lower. The lack of support in the feeder cattle futures kept the deferred contracts under pressure, but triple digit gains in boxed beef values seemed to curb much of the market pressure. Long liquidation and profit taking were the main features. October settled .35 lower at 169.20, and December was down .05 at 167.77.

Feeder cattle settled 5 to 115 points lower. The challenge seen in the feeder cattle futures of late, is the market direction has been so driven by momentum, it is hard to pinpoint a reason for a swift turn in market direction or activity levels. This was the case again on Tuesday as traders quickly tried to square positions given the lack of buyer support early in the week. Although contracts moved well off session lows, there remains some uncertainty about just how much gas is left in the tank to propel feeder cattle futures into the month of November. October settled .05 lower at 238.27, and November was down 1.15 at 233.65.

Feeder cattle receipts at the Tri State Livestock Auction at MC Cook, Nebraska totaled 2400 head on Monday. Compared to last week, steers were steady to 8.00 lower and heifers’ were 7.00 to 10.00 lower. A moderate demand was noted. 277 feeder steers medium and large 1 averaging 571 pounds brought 273.77 per hundredweight. 194 heifers weighing 567 averaged 251.29.

Lean hogs settled 25 to 125 higher. Despite the pressure in the cash market and pork cutout values in the morning report, buyer support remained in the nearby futures contracts. The focus moved from fundamental market direction, which has created so much pressure over the last couple of weeks, to the expectation traders will continue to see the lean hog market as oversold and be willing to step back into the complex at the end of the month. December settled 1.15 higher at 90.20, and February was up 1.07 at 89.30.

Barrows and gilts in the Iowa/Minnesota direct trade closed .70 lower at 87.75 weighted average on a carcass basis, the West was down .58 at 87.45, and the East was 1.90 lower at 86.34. Missouri direct base carcass meat price was 1.00 to 2.00 lower from 79.00 to 83.00. Midwest hogs on a live basis were steady with instances of 1.00 to 5.00 lower from 58.00 to 77.00.

The pork carcass cutout value was 2.39 lower FOB plant at 97.72.

The price of gas has dropped by 29 cents since last year and represents the lowest average cost of gas since Dec. 17, 2010, according to the Lundberg Survey just released. Gas prices have been steadily falling in recent months and are expected to continue to decline amid increasing oil production in the U.S. and abroad. This should make more room in the consumer’s budget for meat.

The hog slaughter was estimated at 432,000 head, 3,000 more than last week, but the same as 2013.

Private sources reported a few bids on the cattle in Kansas at 168.00 live and in Nebraska at 165.00. 263.00 was bid on a dressed basis in Nebraska, but generally buying interest remained quite limited. Asking prices are firm at 172.00 to 173.00 in the South and 270.00 plus in the North. Business looks to be delayed until Thursday or Friday. The kill totaled 102,000 head, 10,000 smaller than last week, and 14,000 less than last year.

Boxed beef cutout values were firm to higher on moderate demand and light to moderate offerings. Choice boxed beef was up 2.07 at 253.63, and select was .67 higher at 239.77.

Chicago Mercantile Exchange live cattle contracts settled 15 to 102 points lower. Selling appeared to be tied to profit taking and caution ahead of the development of late week cash business. Ideas of cash stability and firmness in beef worked to check the development of substantial bearishness. October settled .20 lower at 169.00, and December was down 1.02 at 166.75.

Feeder cattle ended the session mostly 60 to 140 points lower. Feeder contracts had been trading higher much of the session in light volume. But ended the session in the red except for the October contract up .57 at 238.85. November was down .60 at 233.05.

Feeder cattle receipts at the Ozark’s Regional Stockyards at West Plains, Missouri totaled 2933 head on Tuesday. Compared to last week the bulk of the feeder steers and heifers traded steady with the exception of 450 to 550 weights which were 5.00 to 10.00 higher. Yearling steers were mostly steady with yearling heifers 5.00 to 10.00 higher. Demand was very good, especially on five weights. The supply was moderate. Feeder steers averaging 524 pounds traded at 275.42 per hundredweight. Heifers weighing 578 pounds brought 242.96.

Lean hogs settled 50 points higher to 160 lower. There was some firmness in the far deferred contracts, front months ended in the red. The selling interest was primarily focused on the first three contracts where there was triple digit damage. Fourth quarter fundamentals continued to send off bearish vibes. John Harrington at DTN said, spot December apparently feels the necessity to keep backpedaling as the cash index falls at a faster and faster rate. December settled at 88.60 down 1.60 and February was 1.25 lower at 88.05.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.30 lower at 86.33 weighted average on a carcass basis, the West was down 1.10 at 86.27 and the East was 1.60 lower at 84.74. Missouri direct base carcass meat price was 1.00 lower from 78.00 to 82.00. Midwest hogs on a live basis were steady to 2.00 lower from 56.00 to 77.00.

The pork carcass cutout value FOB plant was up 1.63 at 99.35. Loins, hams and bellies were higher.

DTN reports at least one major player in the swine genetic business is reporting significant signs of an expanding U.S. sow herd. Older empty barns are being retrofitted and being refilled. New sow barns are being contemplated. 

The Wednesday hog kill was estimated at 431,000 head, 10,000 more than last week and 1,000 greater than a year ago.

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