Grain Futures Markets Down

Sep 09, 2014

Tuesday's Closing Grain + LIvestock Futures Prices

Sep. corn closed at $3.36 and 1/4, down 3 cents
Sep. soybeans closed at $10.76 and 1/2, down 14 and 1/4 cents
Sep. soybean meal closed at $453.70, up $7.50
Sep. soybean oil closed at 31.59, down 44 points
Sep. wheat closed at $5.27 and 1/2, down 6 cents
Oct. live cattle closed at $159.67, up $1.15
Oct. lean hogs closed at $105.77, up $2.70
Oct. crude oil closed at $92.75, up 9 cents
Dec. cotton closed at 65.79, up 74 points
Sep. Class III milk closed at $24.52, up 7 cents
Sep. gold closed at $1,246.80, down $5.90
Dow Jones Industrial Average: 17,013.87, down 97.55 points

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Ag Market News and Commodity Comments 

Soybeans were lower on commercial and speculative selling, with November and January settling below $10. Traders are watching the weather, which generally looks good, and getting ready for Thursday’s USDA numbers. Analysts expect increases for production, yield, and ending stocks figures. Still, the trade’s wary about the potential for an early frost. Soybean meal was mostly lower, September was the exception, and soybean oil was down modestly. Unknown destinations bought 120,000 tons of 2014/15 U.S. soybeans. CONAB now sees Brazil’s old crop soybean production at 86.1 million tons. Allendale states Brazil’s new crop could top 95 million tons due to increased acreage.

Corn was lower on commercial and speculative selling. Corn’s also getting ready for the upcoming USDA reports, which should be bearish, while watching weather. Conditions look good, but there is a chance for an early frost later this week. Ethanol futures were lower. CONAB projects Brazilian corn production at 79.9 million tons. AgriVisor adds China could see an even larger than expected reduction in domestic corn production due to heavy rainfall during late development.

The wheat complex was lower on commercial and speculative selling, in addition to the higher dollar. Thursday’s USDA numbers should also be bearish for wheat. The big negative factor for the complex continues to be the large available world supply, which should just be reinforced by the Ag Department. Australia’s ABARE now sees wheat production at 24.4 million tons, with the potential for the crop to fall below 24 million. According to Australia’s Bureau of Meteorology, there’s a 50% chance for an El Nino pattern to develop. Israel bought 50,000 tons of feed wheat.

Cattle country was untested on Tuesday afternoon with significant buyer interest probably delayed until late in the week. A few asking prices have been identified around 167.00 to 168.00 in the South, and 255.00 to 260.00 in the North. Needless to say given last week’s enormous price surge many feedlot operators are reluctant to price cattle too cheaply. The kill totaled 116,000 head, 3,000 below last week and 10,000 smaller than a year ago.

Boxed beef cutout values were weak on the choice and higher on select on light to moderate demand and offerings. Choice beef was.31 lower at 251.08 and select was .84 higher at 238.68.

Live cattle contracts on the Chicago Mercantile Exchange settled 35 to 142 points higher as firm support held across the complex on Tuesday, although it was a struggle to draw increased trade support into the market. Triple digit gains in the feeder cattle helped to support live cattle contracts. October settled 1.15 higher at 159.67, and December was up 1.42 at 162.27.

Feeder cattle ended the day 130 to 207 points higher setting another round of contract highs. Traders continued to focus on the continued tight supply of cattle available to move into feedlots over the next few months and expected continued pressure in the corn market. September settled 1.47 higher at 228.62, and October was up 1.82 at 227.75.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 9800 head. Compared to two weeks ago, feeder steers trended 8.00 to 12.00 higher. Feeder heifers were lightly tested and 3.00 to 8.00 higher. Steer and heifer calves were mostly steady. The demand continues very goods for all classes with the best demand noted on larger packages of weaned cattle. Feeder steers medium and large 1 averaging 734 pounds brought 235.83 per hundredweight. 722 pound replacement heifers traded at an average of 224.85.

Lean hogs settled 50 to 270 points higher. Traders concentrated on squaring positions following the sharp losses and widespread liquidation seen Monday in the October contract. Traders are looking for firm support through the overall complex and firming pork value support over the next few days. October settled 2.70 higher at 105.77, and December was up 2.20 at 98.25.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.75 higher with a weighted average of 101.30 on a carcass basis, the West is 1.72 higher at 101.21, and the East was .46 higher at 94.02. Missouri direct base carcass meat price was steady to 1.00 higher from 87.00 to 93.00. Midwest hogs on a live basis were steady from 60.00 to 66.00.

The pork carcass cutout value was up 1.74 at 105.28 FOB plant.

While the post-Labor-Day rally in the oversold cash hog market could be extended for another 2-3 weeks, few doubt this reprieve is anything more than a temporary lull in the seasonal storm. With new lows likely through most of October and November, specs and commercials will remain on the defensive, ready to lean into board improvements when the opportunity seems right according to DTN analysts.

Hog slaughter was estimated at 405,000 head, 7,000 less than last week and down 22,000 from last year.

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