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Soybeans and Wheat Futures Prices Jump Higher

Closing Grain and Livestock Futures Prices

Mar. corn closed at $4.41 and 3/4, up 6 cents
Mar. soybeans closed at $13.13 and 1/4, up 20 and 1/2 cents
Mar. soybean meal closed at $447.00, up $13.00
Mar. soybean oil closed at 37.71, up 26 points
Mar. wheat closed at $5.84 and 1/2, up 20 and 3/4 cents
Feb. live cattle closed at $139.60, down 77 cents
Feb. lean hogs closed at $85.22, up 35 cents
Mar. crude oil closed at $97.17, up 76 cents
Mar. cotton closed at 85.40, up 39 points
Feb. Class III milk closed at $22.84, up 3 cents
Mar. gold closed at $1,251.20, down $8.70
Dow Jones Industrial Average: 15,445.24, up 72.44 points

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 Soybeans were higher on commercial and technical buying. The trade’s keeping an eye on some weather issues around South America and there’s some talk of new export demand. Still, nothing’s been confirmed and China’s expected to be largely out of the export market over the next several days due to their New Year celebration. Soybean meal was mixed on old crop/new crop spread adjustments with nearbys up and deferreds down and bean oil was supported by the higher moves in beans and crude oil. According to Statistics Canada, canola stocks on December 31, 2013 were 12.597 million tons and soybeans stocks were 2.650 million tons, both up on the year. Informa Economics projects Brazil’s 2014 soybean crop at 89.7 million tons and sees Argentina at 57 million tons. Informa adds 6% of Brazil’s soybean crop is harvested.

Corn was higher technical and commercial buying, in addition to spillover from beans and wheat. Corn’s also watching that South American weather, domestic demand is good, and while there are no new sales, export demand’s been pretty solid as of late. However, there’s a lot of corn available right now, keeping the overall fundamentals bearish. Ethanol futures were higher. Statistics Canada reports corn stocks at the end of last year were 11.527 million tons, compared to 10.404 million on December 31, 2012. Informa Economics estimates 2014 Brazilian corn production at 66.55 million tons and expects Argentina’s crop to be around 22.6 million tons. According to Bloomberg News, Bunge is shipping around 3.3 million gallons of U.S. ethanol to Brazil.

The wheat complex was higher on commercial and technical buying. Crop condition ratings declined over the past month around the Great Plains and there are winterkill concerns both in the states and around the Black Sea region. Additionally, it looks like there’s an increase in demand around current price levels and Canada’s wheat stocks were a little bit smaller than expected at 28.381 million tons. That said – the Canadian supply is much larger than a year ago and in general, world supplies are ample with the trade expecting a large world crop again this year. DTN reports South Korea’s Nonghyup Feed Inc. bought 65,000 tons of optional origin feed wheat. Informa Economics projects Argentina’s wheat crop at 10 million ton.

The feedlot cattle trade was unestablished on Tuesday afternoon with packer inquiry very light according to DTN. A few of the showlists have been priced around 146.00 plus in the South, and 235.00 plus in the North. Significant trade volume will probably be delayed until Wednesday or Thursday. The kill was estimated at 116,000 head, 3,000 more than last week, but 4,000 less than a year ago.

Boxed beef cutout values were steady to firm on light demand and offerings. Choice beef was up .40 at 220.49, and select was down .21 at 219.21.

Live cattle contracts on the Chicago Mercantile Exchange settled 2 to 77 points lower. The sense of stability and support in live cattle markets evident early in the session quickly eroded despite the firmness in the beef values in the midday report. There was light to moderate pressure as the focus in the cattle market is the uncertainty surrounding the ability to maintain current beef and cash prices. Trade was sluggish with the focus on outside markets. February settled .77 lower at 139.60, and April was down .50 at 138.90.

Feeder cattle ended the session 25 to 102 points lower. Trade was mixed early in the session, but pressure entered the market due to higher corn prices and the inability for live cattle contracts to stay steady. March settled 1.02 lower at 166.97, and April was down .90 at 167.50.

Feeder cattle receipts at the Sioux Falls Regional Stockyards at Worthing, South Dakota totaled 6476 head on Monday. Feeder steers were mostly 2.00 to 5.00 lower and heifers traded from 5.00 lower to 3.00 higher. There was good to very good demand, with the best demand for light fleshed cattle. 444 head of feeder steers medium and large 1 with an average weight of 675 pounds traded at 184.63 per hundredweight. 320 heifers averaging 660 pounds brought 168.09.

Lean hogs settled 2 to 35 higher with the exception of the May contract that was down 97. The lean futures bounced back from early week trade as traders start to look at the potential of tightening hog numbers and focus less on pork demand for the short term. February settled .35 higher at 85.22, and April was up .27 at 84.12.

Cash hog prices were generally higher on Tuesday even though there was slow market activity with light demand. Barrows and gilts in the Iowa/Minnesota direct trade closed .28 higher with a weighted average of 82.47 on a carcass basis, the West was up .33 at 82.18, and the East was .23 higher at 78.94. Missouri direct base carcass meat price closed steady to 1.00 higher at 76.00. Terminal hogs were steady to 2.00 higher from 53.00 to 55.00 live.

The pork carcass cutout value was .97 higher at 91.52 FOB plant in the afternoon report. Picnic, rib and ham primals were responsible for the gains in the overall carcass value.

While frigid winter weather could take a pound or so off hog carcasses this month, most analysts believe that weights will continue to hold between 212-214 pounds through March thanks to cheaper feed. Producers simply have incentive to hold hogs on feed longer to receive extra revenue from additional gain.

Tuesday’s hog slaughter was estimated at 430,000 head, 23,000 more than last week, and 7,000 greater than last year.

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