Grain Futures Prices Continue to Slide on Record Crops

Sep 25, 2014

Thursday's Closing Grain + LIvestock Futures Prices

Dec. corn closed at $3.26, down 3 and 1/2 cents
Nov. soybeans closed at $9.22 and 3/4, down 14 cents
Oct. soybean meal closed at $312.40, down $4.00
Oct. soybean oil closed at 32.62, unchanged
Dec. wheat closed at $4.74, down 6 and 1/4 cents
Oct. live cattle closed at $155.45, up 12 cents
Oct. lean hogs closed at $106.32, down $1.12
Nov. crude oil closed at $92.53, down 27 cents
Dec. cotton closed at 61.40, down 17 points
Oct. Class III milk closed at $24.73, down 27 cents
Oct. gold closed at $1,221.20, up $2.60
Dow Jones Industrial Average: 16,945.80, down 264.26 points

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Ag Market News and Commodity Comments:


Soybeans were lower on commercial and technical selling. The big negative for beans continues to be this year’s expected record crop. One interesting note is that as soybean futures cash and prices have declined, interest in options has increased sharply. Demand does remain solid, with a bullish week for exports and China buying 115,000 tons of 2014/15 U.S beans. Soybean meal was down and bean oil was steady to weak on the bearish tone in beans.

Corn was lower on commercial and technical selling. Corn also saw more pressure tied to this year’s expected record crop. Weekly export numbers were solid, with sales topping expectations, but again, the fundamentals are bearish and weather looks mostly good for late development and early harvest. Ethanol futures were lower.

The wheat complex was mixed, with Chicago down, while Kansas City and Minneapolis consolidated. Weather also looks good for the spring harvest and for winter planting. Export numbers were neutral, with sale inside expectations. Nigeria bought 120,000 tons of 2014/15 U.S. hard red winter wheat and South Korea picked up 23,600 tons of U.S. wheat. Also, DTN reports France bought 22,000 tons of wheat from Canada to help quality following widespread damage by wet weather during harvest.

The cash cattle trade was quiet on Thursday with just a few bids remaining on the table in Nebraska from 240.0 to 242.00. The fact that the trade has not developed is not surprising given the lack of direction through midweek. There is a wide gap between asking prices and bids. Southern feedlot operators appear to be holding out for around 161.00, while Northern feeders are asking 247.00 plus. The cattle kill is estimated at 107,000 head, 7,000 below last week, and 12,000 smaller than a year ago.

Boxed beef cutout values were steady on the choice and lower on select on light to moderate demand and moderate offerings. Choice beef was down .02 at 239.11, and select was .97 lower at 225.34.

Live cattle futures contracts settled 10 to 50 points higher on the Chicago Mercantile Exchange on Thursday. Light gains held into the close as traders focused on the attempt to stabilize boxed beef values in morning reports as well as developing bids in the cash market. Although there was little action in the cash trade there was more packer interest than had been seen previously and that gave confidence to nearby traders. October settled .12 higher at 155.45, and December was up .32 at 159.10.

Feeder cattle contracts ended the session 80 points higher to 30 lower in an extremely light trade with narrow losses in the nearby contracts offset by moderate gains in the deferred months. September settled .20 lower at 230.87, October was down .30 at 230.10, and November was .20 lower at 228.60. 2015 contracts ended higher.

Feeder cattle receipts at the Huss Platte Valley Auction in Nebraska totaled 2800 head on Wednesday, Compared to two weeks ago, steers and heifers weighing less than 800 pounds sold unevenly steady and those weighing over 800 pounds were steady to 3.00 higher. Demand was good on all offerings from start to finish. 106 head of feeder steer calves averaging 623 pounds traded at 273.57 per hundredweight. 139 heifers weighing 527 pounds brought 262.33.

Lean hogs settled 10 to 160 points lower. Concern over potential hog expansion through the end of the year and in early 2015 created pressure in all contract months. October settled 1.12 points lower at 106.32, and December was down 1.60 at 93.60.

There was a moderate to active hog market on moderate to good demand. Barrows and gilts in the Iowa/Minnesota direct trade closed .16 higher at 107.73 weighted average on a carcass basis, the West was down .21 at 107.32, and Eastern hogs were .08 lower at 101.12. Missouri direct base carcass meat price was steady from 95.00 to 100.00. Midwest hogs were fully steady from 68.00 to 80.00 on a live basis.

The pork carcass cutout value was 1.48 higher at 118.91 FOB plant. Bellies were over 8.00 higher.

Stable corn prices and quickly falling soybean meal price levels are creating a situation where many producers are willing to hold hogs longer that are near market weights. This could continue to expand average hog weights, and add additional tonnage of pork even without changing overall short term hog numbers significantly.

Thursday’s hog kill was estimated by USDA at 412,000 head, 3,000 less than last week and down 14,000 from last year.


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