Soybean Futures Prices Drop on Demand

Jul 17, 2014

Thursday's Closing Grain and Livestock Futures Prices

Sep. corn closed at $3.79 and 1/2, up 1 and 1/4 cents
Aug. soybeans closed at $11.74 and 3/4, down 12 and 1/2 cents
Aug. soybean meal closed at $380.50, down $3.20
Aug. soybean oil closed at 36.67, down 46 points
Sep. wheat closed at $5.50 and 3/4, up 12 and 3/4 cents
Aug. live cattle closed at $150.65, up $2.97
Aug. lean hogs closed at $128.85, down $1.67
Aug. crude oil closed at $103.19, up $1.99
Oct. cotton closed at 68.45, up 6 points
Aug. Class III milk closed at $21.42, up 15 cents
Aug. gold closed at $1,316.90, up $17.10
Dow Jones Industrial Average: 16,976.81, down 161.39 points

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Soybeans were lower on fund and technical selling. China bought 708,000 tons of new crop U.S. beans, Beijing’s second large outright purchase of new crop this week, but commercial demand remains very light and that sale could be canceled later on. Past that – crop weather looks good and fundamentals are turning bearish. Soybean meal and oil followed beans lower. Reuters reports China is looking to build rail infrastructure in Brazil to aide with commodity shipping.

Corn was firm on technical buying and spillover from wheat. Weekly export sales were good, but it was another slow week for the shipments. In any event, corn’s also watching the weather forecasts, which generally look pretty good. As much as anything, corn’s trade Thursday was pretty much path of least resistance activity. Ethanol futures were higher.

The wheat complex was higher on fund and technical buying. Trade was mixed early, but contracts rallied on uncertainties about the plane crash in Ukraine. There’s still a lot unknown, so speculation is unwarranted, but anything major could interrupt wheat and grain exports. Also internationally, India’s monsoon is growing more active and Egypt may reduce wheat imports under a new food subsidy plan. According to Reuters and KazAgro, Kazakhstan should harvest 18 million tons of grain. Japan bought 86,200 tons of U.S. food wheat, along with 26,500 tons from Australia. Israel picked up 50,000 tons of optional origin feed wheat, Turkey bought 235,000 tons of milling wheat, and Algeria purchased 810,000 tons French milling wheat.

The cash cattle market was slow on Thursday afternoon, and the suspicion is business is essentially completed for the week. A few cattle sold in Iowa and Nebraska from 246.00 to 248.00 about steady with the bulk of Wednesday’s business. Unsold cattle remaining on the showlists are priced around 158.00 live in the South and 250.00 dressed in the North. The kill totaled 115,000 head, 2,000 more than last week, but 9,000 less than last year.

Boxed beef cutout values were lower on choice and higher on select on light to moderate demand and moderate offerings. Choice beef was down 1.01 at 249.81, and select was 1.38 higher at 244.24.

Chicago Mercantile Exchange live cattle contracts settled 125 to 297 points higher as sharp gains developed through the futures market Thursday. This sparked another round of trade activity in nearby contracts. Higher boxed beef prices at midday and nearly steady cash prices were supportive to futures. August settled 2.97 higher at 150.65 and October was up 2.40 at 153.70.

Feeder cattle ended the day 167 to 247 points higher supported by sharply higher front month live cattle futures. Although firming support was seen in the corn market, the aggressive rally in live cattle futures generated some significant excitement through the entire cattle market. August settled 1.77 higher at 211.60 and September was up 1.85 at 212.35.

Feeder cattle receipts at the Huss Platte Valley Auction in Nebraska totaled 1150 head. Compared to two weeks ago, steers sold steady to 8.00 higher and heifers sold unevenly steady on a limited test. The demand was good for all offerings. Feeder steers averaging 909 pounds traded at 213.72 per hundredweight. 856 pound heifers brought an average of 215.00.

Lean hogs settled mostly lower. Any sense of market stability that developed in the overnight trade and firm support in the cattle complex had very little impact in helping to draw additional buyers back into the market. Although there still remains concern that tight supplies will keep hogs hard to get a hold of, the increase in average hog weights in Wednesday’s report, and lack of support in cash values has caused some concern for commercial traders. August settled 1.67 lower at 128.85 and October was down 1.35 at 113.72.

Barrows and gilts in the Iowa/Minnesota direct trade closed 2.41 lower at 127.87 weighted average on a carcass basis, the West was down 2.39 at 127.85, and the East at 128.56 with no price comparison. Missouri direct base carcass meat price was steady at 122.00. Midwest hog markets were steady to 2.00 higher with an instance of 4.00 higher from 87.00 to 94. 00 on a live basis.

The pork carcass cutout value FOB plant was up 1.20 at 137.09.

For the week ending July 12, Iowa barrows and gilts averaged 285.5 pounds, 1.3 pounds heavier than the prior week and a whopping 13.5 pounds greater than 2013. Producers continue to compensate for the serious shortage of ready hog numbers.

Thursday’s hog kill was estimated by USDA at 395,000 head, the same as last week, but 11,000 less than last year.

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