Grain Futures Prices Drop Lower

Sep 19, 2014

Friday's Closing Grain + LIvestock Futures Prices

Dec. corn closed at $3.31 and 1/2, down 6 and 3/4 cents
Nov. soybeans closed at $9.57, down 14 and 1/2 cents
Oct. soybean meal closed at $324.10, down $4.70
Oct. soybean oil closed at 32.46, down 26 points
Dec. wheat closed at $4.74 and 1/2, down 14 cents
Oct. live cattle closed at $155.62, up 2 cents
Oct. lean hogs closed at $105.97, up $3.00
Oct. crude oil closed at $92.41, down 66 cents
Dec. cotton closed at 64.39, down 66 points
Oct. Class III milk closed at $24.70, down 6 cents
Oct. gold closed at $1,215.50, down $10.40
Dow Jones Industrial Average: 17,280.06, up 14.07 points

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Ag Market News and Commodity Comments

Soybeans were lower on fund and commercial selling, hitting new contract lows. The big bearish factor for beans continues to be the expected record crop. Demand’s strong, China bought 1.236 million tons of 2014/15 U.S. beans, but that was likely part of the deal signed earlier in the week. Soybean meal and oil followed beans lower.

Corn was lower on fund and commercial selling, making another round of new contract lows. As with beans, the overriding negative factor for corn is this year’s expected record crop. Mexico did pick up 375,936 tons of 2014/15 U.S. corn, but weather looks good and fundamentals remain bearish. Ethanol futures were lower.

The wheat complex was lower on fund and commercial selling. For wheat, the big bearish factor is the large available world supply, pushing Chicago to new contract lows. Rainfall is delaying winter wheat planting in the Southern Plains, but it’s also recharging soil moisture, which is arguably a bigger factor. Tunisia bought 75,000 tons of optional origin milling wheat and Algeria picked up 605,000 tons of milling wheat, with at least part of that French origin.

USDA Mandatory reported cattle trading was light to moderate in Kansas on Friday afternoon on light to moderate demand. Compared to last week, live sales were 2.00 to 3.00 lower at 159.00. A few dressed sales in Nebraska traded 3.00 to 5.00 lower than last week at mostly 245.00.The weekly cattle slaughter was estimated at 571,000 head, 21,000 fewer than last week and 60,000 less than 2013.

Boxed beef cutout values were sharply lower on light demand and light to moderate offerings. Choice beef was down 1.17 at 243.71, and select was 2.48 lower at 229.61.

Chicago Mercantile Exchange live cattle contracts settled 2 to 87 higher with only December lower. Trade was mixed through the complex for much of the session. Modest support was evident in the February and April contracts, although most of the trader’s attention continued to be based on the direction of the cash cattle trade as well as the potential shifts in cattle supplies reported in the cattle on feed report.  October settled .02 higher at 155.62, and December was down .22 at 158.70.

Feeder cattle ended the session 62 to 102 points higher. Nearby contracts were able to slowly but steadily gain momentum and close higher. Traders concentrated on the potential of lighter than expected placements in feedlots in August. Traders appeared satisfied to hold the gains into the weekend. September settled .70 higher at 230.60 and October was up 1.02 at 230.60.

Feeder cattle receipts at Missouri auctions this week totaled 25,876 head. Compared to last week feeder steers and heifers sold steady to 5.00 higher with some heavy weight calves seeing instances of 10.00 higher. The story of the feeder cattle market is pretty much a continuation of what has been seen over the last several weeks. Given the potential of a likely record harvest many are looking to find cattle to feed in the coming months. Feeder steers, medium and large 1 averaging 622 pounds traded at 259.29 per hundredweight. 619 pound heifers brought 240.71.

Lean hogs settled 300 points higher to 20 lower but mostly in the black. Futures jumped from near limit losses, but reversed the trend and closed limit higher in the lead month. The nervous movement of the market created some uncertainty and questioning any fundamental reasoning about longer term supply and demand. With the exception of the nearby contract gains, it was hard to find much activity through the rest of the complex allowing current positions to hold into the weekend. October settled the 3.00 limit higher at 106.97 and December was up 1.05 at 94.85.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.00 higher with a weighted average of 105.82 on a carcass basis, in the West the market was up .86 at 105.52, and Eastern hogs were .45 lower at 99.77. The Missouri direct base carcass meat price was steady from 90.00 to 97.00 in a light test.

The pork carcass cutout value FOB plant ended the day .68 lower at 113.54.

The U.S. dollar continues to rally on expectations of higher rates down the road with the dollar index hitting a 14-month high on Thursday. Needless to say, such a trend is negative for U.S. meat exports.

The weekly hog kill was estimated at 2,050,000 head, down 3,000 from last week and 128,000 less than last year.

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