Tuesday's Closing Grain and Livestock Futures
Mar. corn closed at $4.26, down 1 and 3/4 cents
Jan. soybeans closed at $12.99 and 1/2, up 2 and 3/4 cents
Jan. soybean meal closed at $434.60, up $5.80
Jan. soybean oil closed at 37.70, down 17 points
Mar. wheat closed at $6.02 and 1/2, down 3 and 1/4 cents
Feb. live cattle closed at $136.52, down 30 cents
Feb. lean hogs closed at $85.52, down $1.10
Feb. crude oil closed at $93.67, up 24 cents
Mar. cotton closed at 84.67, up 104 points
Jan. Class III milk closed at $20.88, up 22 cents
Feb. gold closed at $1,239.60, down 40 cents
Dow Jones Industrial Average: 16,530.94, up 105.84 points
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Agri Market Futures News ReCap
Soybeans were mostly lower on fund and commercial selling. Conditions around Brazil look favorable and while parts of Argentina are dry, there's some rain in the forecast later this week. China bought 350,000 tons of 2013/14 U.S. beans, but traders were more focused on South America and pre-report position squaring ahead of Friday's USDA reports. Soybean meal was mixed on old crop/new crop spread adjustments and oil was lower.
Corn was lower on fund and technical selling. Corn's staying fairly cautious ahead of Friday's USDA numbers with traders expecting a record crop number and big increases in quarterly and ending stocks. Domestic demand looks solid and country movement remains slow, but there are questions about exports. Ethanol was firm.
The wheat complex was mixed in consolidation trade. Wheat's watching weather around the winter growing areas, with bitterly cold weather moving out of the Plains and Midwest. Friday, USDA will have their first winter planting estimate of the season, with acreage expected to be up on the year. Bangladesh is tendering for 50,000 tons of optional origin wheat and Taiwan's tender for 54,800 tons of U.S. milling wheat remains open.
Cattle country was very quiet on Tuesday afternoon with packer bids not yet evident. Some asking prices are around 140.00 in the South, and 220.00 to 222.00 in the North. The expectation is significant business will wait until late in the week. The kill totaled 107,000 head, 7,000 more than last week, but 20,000 less than last year.
Boxed beef cutout values closed higher on moderate demand and light offerings. Choice beef was up 1.77 at 207.31, and select cuts were 2.18 higher at 203.56.
Live cattle contracts on the Chicago Mercantile Exchange settled 10 to 77 points lower despite strong gains in the boxed beef values and aggressive pricing done by feeders in the cash market. The impact in the lean hog futures cannot be ignored and caused moderate pressure through the rest of the complex. Trade volume remained light, allowing for uncertainty through the rest of the week. February settled .30 lower at 136.52, and April was .57 lower at 136.35.
Feeder cattle settled 15 to 50 points lower with only spot January in the black. The uncertainty of pushing prices significantly higher caused some traders to focus on squaring positions in front of potential market correction. But there still seems to be additional fundamental support surrounding tight supplies through most of 2014. This could help to draw buyers back into the market later in the week. January settled .02 higher at 168.05, and March was down .27 at 167.82.
Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 8137 head. Compared to the last sale in mid-December, feeder steers and calves were 5.00 to 8.00 higher. Feeder heifers and calves trended 3.00 to 6.00 higher. Demand was very good for all classes following the holiday season. Some cattle already headed to grass and some still headed to graze out wheat and those are selling to very good demand. Feeder steers, medium and large 1 averaging 679 pounds brought 176.20 per hundredweight. 670 pound heifers averaged 164.66 at Oklahoma City on Monday.
Lean hogs settled 10 to 110 points in the red. Aggressive pressure developed early on Tuesday as traders focused on the lack of pork demand through the next couple of weeks. February futures experienced the most significant pressure, hanging on to triple digit losses through most of the session. Cash prices were not reported in the morning due to confidentiality. February settled 1.10 lower at 85.52, and April was down .70 at 90.72.
The hog market trend was not well established on Tuesday and there was slow market activity with light demand. Barrows and gilts in the Iowa/Minnesota direct trade closed 1.50 lower at 77.95 on a carcass basis, the West was down 1.64 at 77.77, and Eastern trade was not reported due to confidentiality. Missouri direct base carcass meat price closed from 73.00 to 75.00 with no price comparison. Terminal hogs were fully steady from 51.00 to 58.00 live.
Pork cutout values were 2.38 higher at 85.36 FOB plant with belly and rib primals responsible for the gain in value.
Weather problems backing up hog slaughter early this week could result in bearish cash and product problems by Thursday and Friday if supplies start to bunch up.
Though hog weights typically trend lower through much of the winter, some analysts believe that the scale will tip unusually heavy through the first quarter. Cheaper feed and the desire to compensate for PEDv losses may be to blame in this regard.
Tuesday's hog slaughter was estimated at 390.000 head, 26,000 head more than last week, but 37,000 less than last year.
