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Soybean Prices Soar On Hot Dry Brazilian Weather

 Closing Grain And Livestock Futures Prices

Mar. corn closed at $4.49 and 1/2, up 4 and 1/4 cents
Mar. soybeans closed at $13.61, up 23 and 1/2 cents
Mar. soybean meal closed at $456.90, up $6.90
Mar. soybean oil closed at 40.36, up 121 points
Mar. wheat closed at $6.12, up 13 and 1/2 cents
Feb. live cattle closed at $143.75, up $1.15
Apr. lean hogs closed at $97.37, up $1.20
Mar. crude oil closed at $102.43, up $2.13
Mar. cotton closed at 87.91, up 36 points
Mar. Class III milk closed at $21.26, up 22 cents
Mar. gold closed at $1,324.60, up $5.80
Dow Jones Industrial Average: 16,130.40, down 23.99 points

 For additional futures prices click http://www.farms.com/markets

Market News Update

Soybeans hit new five month highs on commercial and fund buying. The trade’s watching hot, dry weather over the near term in parts of Brazil, along with too much rainfall in other areas. Allendale adds there’s a potential for caterpillar infestation in parts of Argentina. The near term supply remains tight and demand continues to look strong, keeping the overall fundamentals bullish. New USDA production numbers are out later on this week. Soybean meal and oil followed soybeans higher. According to the National Oilseed Processors Association, member firms crushed 156.9 million bushels of soybeans in January, lower than expected and down on the month due to weather limiting movement. Agriculture and Agri-Food Canada projects 2014/15 flaxseed ending stocks 160,000 tons, compared to the late January guess of 150 million.

Corn was higher on technical buying, along with spillover from beans and wheat. Export demand’s been good recently, ethanol demand’s even stronger, and in general, investors just seem more interested in corn lately. Still, the supply is large, keeping the fundamentals bearish, and corn’s also waiting for those USDA numbers. Corn’s also waiting for the USDA numbers out later this week. Ethanol futures were higher. Agriculture and Agri-Food Canada estimates 2014/15 corn ending stocks at 12.5 million tons, unchanged from the January projection. According to Ukraine’s Ag Ministry, corn exports since the start of the marketing year are 13.699 million tons, with cumulative sales 34% of last year’s pace.

The wheat complex was higher on commercial and fund buying, in addition to the lower dollar. Snow cover has mostly disappeared around the Plains, so keep an eye on weather and the potential for another cold snap in the region. Wheat’s also watching the continued shipping issues out of Canada. Past that – there was no real fresh fundamental news but it looks like the path of least resistance is higher. Agriculture and Agri-Food Canada expects 2014/15 ending stocks for all wheat to be 9.395 million tons, compared to 9.5 million in their January 24 update. DTN reports Bangladesh bought 50,000 tons of wheat, likely Indian origin, while Japan’s tendering for 80,000 tons of food wheat and Iraq is in the market for 50,000 tons of wheat. Ukraine’s Ag Ministry reports grain exports since the start of the marketing year are 23.223 million tons, 7.163 million of that wheat and 5.832 million tons of that milling quality wheat.

Feedlot country was not tested on Tuesday afternoon with both bids and asking prices poorly defined. It does seem clear however that feedlot managers are thinking higher, encouraged by the boards rally and improving carcass value. A few showlists have been priced around 145.00 in the South and 230.00 plus in the North. The cattle slaughter was estimated at 115,000 head, 3,000 more than last week and 6,000 less than last year.

Boxed beef cutout values were higher on moderate demand and light to moderate offerings. Choice beef was up 1.01 at 211.99, and select was 1.70 higher at 210.72.

Live cattle contracts on the Chicago Mercantile Exchange settled 75 to 122 points higher. Buyer support quickly redeveloped through the complex following expectations of demand support in both nearby and deferred futures contracts. Boxed beef prices were higher in the morning report and traders are looking for additional firmness in values as the week progresses, which could spark additional activity in the cash market prices. February settled 1.15 higher at 143.75, and April was up 1.02 at 142.12.

Feeder cattle ended the session 122 to 197 higher with the focus on aggressive gains in all livestock futures markets. Traders are looking for continued tight feeder cattle supplies through most of the spring and summer, as well as increased beef market demand. March settled 1.22 higher at 171.70, and April was up 1.85 at 173.20.

Feeder cattle receipts at the Joplin Regional Stockyards on Monday totaled 9,179 head. Compared to a very light test last week, steer and heifer calves weighing less than 550 pounds were 4.00 to 8.00 higher, steers 550 to 700 pounds steady to 2.00 higher, steers over 700 pounds and heifers over 550 pounds steady. The demand was good on a heavy supply. Feeder steers medium and large 1 averaging 575 pounds averaged 200.83 per hundredweight. 590 pound heifer’s brought an average of 173.97.

Lean hogs settled 70 to 140 points in the black. Aggressive gains developed through the market on Tuesday morning. Traders were looking for additional direction in the cash and pork values through the week, although the perception of tight supplies and growing demand continues to keep futures traders extremely active in early week trade. April settled 1.20 higher at 97.37 and May was up 1.35 at 105.40.

There was slow hog market activity and light demand on Tuesday afternoon. Barrows and gilts in the Iowa/Minnesota direct trade closed .21 higher with a weighted average of 88.60 on a carcass basis, the West was up .04 at 88.10, and the East was not reported due to confidentiality. Missouri direct base carcass meat price closed 3.00 higher at 81.00. Terminal hogs were steady to 1.00 higher from 55.00 to 59.00 live.

The pork carcass value FOB plant ended the day .52 higher at 95.91.

Though PEDv headlines remain promising, at some point concrete evidence of significant death will be necessary to supporting towering board premiums. For the moment, the market is looking past the fact that the supply impact failed to materialize prior to either the December or February contract. Yet bullish patience in this regard surely has it limits.

Tuesday’s hog slaughter was estimated at 425,000 head, 1,000 more than last week, and 2,000 greater than a year ago.

 

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Today’s update is from Lynn Muench, senior vice president of regional advocacy for The American Waterways Operators.