Soybeans were mixed on old crop/new crop spread activity. The trade’s watching South American crop development weather and while there are some areas of concern, conditions look good overall at this point. Demand remains strong, but there was no real fresh fundamental news. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.
Corn was lower on fund and technical selling. Ahead of next week’s USDA reports, most analysts expect an increase in supply due to large 2014 crop. There was no real fresh news for corn either. Ethanol futures were lower. For the week ending January 2, ethanol production averaged 949,000 barrels per day, up 3.26% on the year. Ethanol stocks of 18.845 million barrels were 16.77% larger than a year ago.
The wheat complex was lower on fund and technical selling, along with some higher trade in the dollar. Even if there is any winterkill from this cold snap, we won’t really know how much damage has been done until the crop gets out of dormancy. In any event, the overall fundamentals for wheat continue to look bearish. Algeria picked up 125,000 tons of optional origin milling wheat.
Cattle country was quiet on Wednesday afternoon following scattered business earlier in the day at 172.00 live and 272.00 to 274.00 dressed in Iowa and Nebraska. It is possible we could see further cleanup action on Thursday and Friday, but the lion’s share of business appears to be done for the week. The balance of the showlists are priced around 172.00 in the South and 275.00 in the North. The kill totaled 104,000 head, 13,000 more than last week, but 12,000 below last year.
Boxed beef cutout values were sharply higher on moderate to fairly good demand and moderate offerings. Choice boxed beef was up 2.42 at 252.75, and select was 2.07 higher at 242.12.
Live cattle contracts closed 12 to 157 points lower on the Chicago Mercantile Exchange on Wednesday. The market was mixed for much of the session with the front months supported by higher cash cattle prices. But, the deferred contracts did not draw buyers back into the market and saw triple digit losses. The long term outlook of most traders at this point is focusing on the potential weakness through the last half of the year. A few weeks of cash market support is not going to be able to change this direction very quickly. February settled .12 lower at 165.90, and April was down .27 at 164.72.
Feeder cattle futures traded mixed in a wide range from 95 points higher to 182 lower. The front months concentrated on the aggressive support in the cash cattle trade, while deferred contracts held moderate to strong losses based on concerns long term demand may not be able to keep up with the recent fundamental support in the market. January was up .95 at 225.65, and March is .55 higher at 220.32.
Feeder cattle receipts at the Hub City Livestock Auction at Aberdeen, SD totaled 3820 head on Saturday. The last sale was over two weeks ago, so a good comparison cannot be made. A higher undertone was noted on both steers and heifers. There was very good demand for the special Saturday sale for many small packages and load lots of steers and heifers in mostly light to moderate flesh. 444 head of feeder steers medium and large 1 averaging 730 pounds traded at 235.50 per hundredweight. 276 heifers weighing 725 averaged 227.88.
Lean hogs settled 22 to 75 points higher as moderate buying support redeveloped through the lean hog futures market. The support early in the trade came from the strength in nearby live cattle futures. There was also growing support in nearby contracts as the focus on PED outbreaks is becoming more prevalent. February settled .75 higher at 79.32, and April was up .52 at 81.87.
Barrows and gilts in the Iowa/Minnesota direct trade closed .70 lower at 74.07 weighted average on a carcass basis, the West was down .62 at 74.03, and the East is 1.80 lower at 71.29. Missouri direct base carcass meat price is down 1.00 at 70.00. Barrows and gilts at Midwest markets on a live basis were steady to higher from 47.00 to 58.00.
The pork carcass cutout value was up .12 FOB plant at 82.53.
If beef production in the first quarter proves to be smaller than expected, higher cut-outs will work to support higher pork prices as well.
Hog slaughter was estimated at 418,000 head, 45,000 more than last week, but 10,000 less than last year.
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