Soybeans were mixed ahead of Friday's USDA numbers. USDA's expected to report a big crop Friday, but that may be moderated by an increase in their export estimate, with the reports out at Noon Eastern/11 AM Central. China bought more U.S. soybeans, 110,000 tons of new crop, so demand continues to look good and the supply remains tight. Soybean meal was mixed and bean oil was up with both pits getting squared ahead of the reports. Crop weather conditions around Brazil are generally good and dry areas of Argentina have received rainfall. Brazil's Ag Minister, via Reuters, states Brazil's 2013/14 crop could "easily" top 95 million tons.
Corn was lower on fund and technical selling, hitting more than three year lows. Corn followed through on the new contract lows set Wednesday as traders got ready for the USDA numbers out on Friday. The reports should be bearish with a record U.S. crop and large increases for both the quarterly and the ending stocks. That said – it's a big question just how much of that bearishness is already dialed in and whether or not corn can bounce off the recent lows or generate new interest at current price levels. Ethanol futures were mixed. Dow Jones Newswires reports there's been some much needed rain in Argentina and while there has been some damage from recent heat, it's fairly isolated and on a small percentage of what could still be that nation's second largest crop ever.
The wheat complex was mixed in consolidation trade, with Chicago down and hitting new two year lows. Kansas City was mostly weak, the exception was the March contract, and Minneapolis was narrowly mixed. Wheat was also getting ready for the USDA reports, expecting a year to year rise in winter wheat acreage, but with tighter ending stocks. Even with a possible reduction in stocks, buying interest was light and there was no fresh supportive news. DTN reports India sold 25,000 tons of new crop wheat, but did not list a buyer.
Northern bids on the cattle seemed to be improving on Thursday afternoon with regionals bidding as high as 220.00 in parts of Nebraska and Iowa. There were also a few bids on a live basis at 138.00 according to private sources. Asking prices are around 139.00 to 140.00 in the South and 220.00 to 222.00 in the North. It looks like prices will be higher for the week. The kill totaled 117,000 head, 4,000 below last week, and 9,000 smaller than last year.
Sharply higher boxed beef values on moderate to fairly good demand and light offerings. Choice boxed beef was up 1.92 at 212.05, and select was 1.98 higher at 209.05.
Live cattle contracts on the Chicago Mercantile Exchange closed higher with the exception of April. Futures traded in a mixed range much of the session following the erosion of early gains. Traders were focused on the potential of shifts in the cash cattle markets as well as positioning trades ahead of Friday's USDA crop report. Significantly higher boxed beef values at midday gave a boost to futures. February settled .02 higher at 136.55, and April was down .10 at 136.87.
Feeder cattle futures ended the session 07 to 67 points higher with support coming from lower corn futures values and higher boxed beef prices. January settled .67 higher at 169.15, and March was up .27 at 168.82.
Feeder cattle receipts at the Huss Platte Valley Auction in Nebraska totaled 5600 head. Compared to the last fully tested market, steers weighing less than 700 pounds suited for summer turn out sold mostly 8.00 higher, over 700 pounds steady to 3.00 higher. Heifers weighing less than 550 pounds sold 9.00 higher, over 550 pounds 2.00 to 3.00 higher. Demand was good from start to finish from a large crowd of buyers. 439 feeder steers averaging 733 pounds brought 178.00 per hundredweight. 400 heifers weighing 676 traded at 169.56.
Lean hogs settled 12 t0 to 45 points lower. Futures bounced higher and lower through the morning, and regained losses seen early in the session. Traders remained concerned about the lack of support in the morning cash market report, which drew increased pressure into the complex. February settled .32 lower at 86.25, and April was down .37 at 90.72.
Barrows and gilts in the Iowa/Minnesota direct trade closed .01 higher at 78.25 weighted average on a carcass basis, the West was down .67 at 77.56, and Eastern hogs were 1.36 higher at 77.46. Missouri direct base carcass meat price was steady from 73.00 to 76.00. Terminal hogs were 1.00 lower to 2.00 higher from 51.00 to 56.00 live.
The pork cutout value was up 1.38 FOB plant at 84.64.
Iowa live weights jumped to a new record high last week with barrows and gilts averaging 282.9 pounds, 0.6 pounds bigger than the prior week and 6.6 pounds greater than 2013.
Despite the slow start to the slaughter week, pork processors appear to be planning a Saturday kill no larger than 145,000 head. This could be a reliable sign that they see live inventory significantly tightening.
The hog slaughter was estimated at 429,000 head, 3,000 less than last week, but the same as last year.
