Grain Futures Prices Higher to End the Week

Dec 12, 2014

Friday's Closing Grain and Livestock Futures

Dec. corn closed at $3.96 and 1/4, up 6 and 1/4 cents
Jan. soybeans closed at $10.47 and 1/4, up 5 cents
Dec. soybean meal closed at $378.90, down $27.20
Dec. soybean oil closed at 31.97, up 4 points
Dec. wheat closed at $6.27 and 1/2, up 17 and 1/4 cents
Dec. live cattle closed at $162.05, down 35 cents
Dec. lean hogs closed at $87.52, down 2 cents
Jan. crude oil closed at $57.81, down $2.14
Mar. cotton closed at 60.54, up 6 points
Dec. Class III milk closed at $17.75, unchanged
Dec. gold closed at $1,222.00 down $3.1
Dow Jones Industrial Average: 17,312.30, down 312.04 points

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Ag Market News Update

Soybeans were higher on fund and commercial buying. Demand remains strong with unknown buying 110,000 tons of U.S. beans for delivery next marketing year. South American development weather generally looks good over the next week, which did put pressure on beans at times, along with drops in the Dow and crude oil. Soybean meal was mixed in consolidation trade and bean oil was up on oversold signals.

Corn was higher on fund and technical buying. Corn’s looking at solid domestic demand, from both the ethanol and the livestock feed sectors. Also, there are some indications that Ukraine has defaulted on at least on corn sale to China due to continued Russian disruption of shipments. Past that – the trade’s waiting for the final 2014 production numbers from USDA in January. Ethanol futures were lower.

The wheat complex was higher on fund and commercial buying. Wheat’s keeping an eye on the potential winterkill in Russia and warm temperatures for the U.S. Plains. There’s also more talk that Russia will have to scale back export plans. December grain and oilseed contracts expired Friday. Argentina has cleared another 1 million tons of wheat for export during the 2014/15 marketing year bringing the total to 2.5 million tons.

USDA Mandatory reported cattle trading was very limited in Kansas with live sales selling 4.00 lower than last week at 164.00. Trading and demand was light in Nebraska. Compared to the previous week, live sales were 4.00 to 6.00 lower from 160.00 to 164.00, with dressed sales 7.00 to 8.00 lower from 256.00 to 257.00. In Iowa a few live sales traded at 162.00, with a light test of dressed sales ranging from 256.00 to 257.00. The weekly slaughter was estimated at 566.000 head, 4,000 more than the previous week, but 42,000 less than last year.

Boxed beef cutout values were sharply lower on moderate demand and moderate to heavy offerings. Choice boxed beef was down 2.76 at 245.03, and select was 1.84 lower at 234.10.

Chicago Mercantile Exchange live cattle contracts settled 35 to 170 points lower. Even though feeder cattle futures were locked limit lower for the last two trading sessions, trading in the live cattle pit was mixed in a narrow range for much of the session before closing lower across the board. The losses in live cattle were minimal compared to the sharp losses in feeders. Very little activity was seen on Friday. December down .35 at 162.05, and February was .40 lower at 162.17.

Feeder cattle contracts settled limit lower in all contract months. Trade volume in the feeder pit was kept at a minimum. The limiting factor was that markets were locked in limit down trade, keeping additional activity from developing. January settled at 225.60, and March at 221.25, both down the $3.00 limit.

Feeder cattle receipts at Missouri auctions this week totaled 33,342 head. There were fewer cattle offered in the sale barns this week, compared to the previous week. Along with lower numbers, the type of the quality offerings was not the same. Feeders traded very uneven. Feeder steers and heifers weighing less than 600 pounds were steady to 5.00 higher. Feeder steers over 600 pounds were mostly 5.00 to 10.00 lower. Feeder heifers over 600 pounds were mostly steady to 5.00 lower. Demand across the state was generally good on a moderate supply. 1295 head of feeder steers, medium and large 1 averaging 626 pounds brought 258.75 per hundredweight. 876 heifers weighing 619 traded at 232.79.

Lean hogs settled 2 to 135 points in the red. Traders looked for the potential of additional cash market stability heading into the holidays, but given expected supply growth through early 2015, it may not limit any market pressure. The softness in the cattle market also left many lean hog traders unwilling to step into the market at this point. December settled .02 lower at 87.52, and February was down 1.10 at 83.25.

There was slow hog market activity with light demand again on Friday afternoon. Barrows and gilts in the Iowa/Minnesota direct trade closed 1.57 lower at 81.44 weighted average on a carcass basis, the West was down 1.79 at 81.12, and the East was not reported due to confidentiality. Missouri direct base carcass meat price closed steady from 76.00 to 78 00.

The pork carcass cutout value was up 1.62 at 82.55 FOB plant. Picnics, loins and butts were all higher, with all other cuts lower.

If pork producers bred more sows last summer in an attempt to compensate for expected PEDv trouble this winter and the dreaded disease turned out to be relatively mild, the early year market could be hit with double barreled production and tonnage.

The weekly hog kill is estimated at 2,254,000 head, 18,000 more than last week, but down 68,000 from last year.

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