Wednesday's Closing Grain and Livestock Futures
Sep. corn closed at $3.57 and 1/4, down 19 and 1/4 cents
Sep. soybeans closed at $9.18 and 1/2, down 62 and 1/2 cents
Sep. soybean meal closed at $323.70, down $18.00
Sep. soybean oil closed at 29.10, down 106 points
Sep. wheat closed at $4.92 and 1/4, down 15 cents
Aug. live cattle closed at $148.70, down $1.47
Aug. lean hogs closed at $77.85, up $1.12
Sep. crude oil closed at $43.30, up 22 cents
Dec. cotton closed at 64.69, up 287 points
Sep. rice closed at $11.71, down 8 cents
Aug. Class III milk closed at $16.44, unchanged
Dec. gold closed at $1,123.60, up $15.90
Dow Jones Industrial Average: 17,402.51, down 0.33 points
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Market News Summary
Soybeans were sharply lower on fund and commercial selling. The USDA’s production, yield, and new crop ending stocks numbers were larger than expected. On the world projections, new crop ending stocks were tighter, with a bigger production guess canceled out by bigger crush and export estimates. USDA also raised the 2015/16 Chinese import estimate from 77.5 million tons to 79 million, and increased Brazil’s export expectation slightly. China devalued its currency again, continuing the concerns about that nation’s economic health. Soybean meal and oil were sharply lower, following beans. CONAB held Brazil’s 2014/15 soybean production estimate at 96.2 million tons, compared to USDA’s estimate of 94.5 million.
Corn was sharply lower on fund and commercial selling. The USDA’s projected production, average yield, and new crop ending stocks were also larger than expected for corn. If realized, it’d be the second highest average yield and third largest U.S. crop on record. Globally, 2015/16 corn ending stocks were increased to 195.09 million tons, with a slight decrease in the global production estimate. The USDA lowered the production projections for the European Union and China, while raising the outlook for Brazil. World exports were increased by less than a million tons, with an increased estimate for Brazil. Ethanol futures were lower. For 2014/15, CONAB has Brazil’s corn crop at 84.3 million tons, compared to their July projection of 81.8 million, and the USDA’s current guess of 84.0 million.
The wheat complex was lower on fund and commercial selling. The domestic USDA numbers reflect the bearish supply and demand fundamentals. Also, international ending stocks were up on the month, from 219.81 million tons to 221.47 million tons. The world production guess was hiked by about 4.6 million tons with larger expectations for Turkey and the entire former Soviet Union against decreased outlooks for Argentina, Canada, and the European Union.
The cash cattle trade remained essentially untested on Wednesday afternoon. A few deals were reported in parts of Nebraska at 237.00 to 238.00, but certainly not enough to constitute a test. Such business may have been tied to weakness in the cattle futures and basis opportunities. Generally speaking showlists continue to be priced around 153.00 plus in the South and 245.00 in the North. The slaughter was estimated at 104,000 head, 2,000 more than last week, but down 10,000 from last year.
Boxed beef cutout values were sharply higher on choice and firm on select on fairly good demand and light to moderate offerings. Choice beef was up 3.09 at 244.02, and select was up .65 at 235.45.
Chicago Mercantile Exchange live cattle contracts settled 105 to 255 points lower following wide price shifts in both grain and feeder cattle markets. The market was pressured by significant volatility in outside markets and further long liquidation. Trade remained light through the late session. August settled 1.47 lower at 148.70, and October was down 2.55 at 146.60.
Feeder cattle contracts settled 7 to 85 points lower significantly selling off midday highs linked to bearish corn production news. August settled .20 lower at 213.87, and September was down .35 at 210.07.
Feeder cattle receipts at the Loup City, Nebraska Commission Company totaled 3116 head on Tuesday. This is the first reported sale in recent weeks so a trend was not given. Demand was good from a capacity crowd in attendance for the annual barbeque appreciation auction. Buyers bid on fresh and weaned calves, and feeders coming off the summer grass and a few from grow yards. Feeder steers medium and large 1 averaging 766 pounds traded at 221.26 per hundredweight. 759 pound heifers brought 210.84.
Lean hogs settled 112 points higher to 90 lower. The nearby contracts held moderate to strong gains. Although traders quickly backed away from triple digit session highs following the bearishness of the USDA crop report that pushed grain markets sharply lower. Deferred futures turned lower as the softness in the grain markets may rekindle talk of expansion and add to the already abundant supply levels through the middle to end of 2016. August hogs settled 1.12 higher at 71.85, and October was up 1.02 at 63.37.
Barrows and gilts in the Iowa/Minnesota direct trade closed 1.50 higher, the West was up 1.69 with both at 75.97 weighted average on a carcass basis, Eastern hogs closed at 72.00 with no price comparison. Missouri direct base carcass meat price was steady from 67.00 to 72.00. Midwest hogs on a live basis were fully steady from 46.00 to 55.00.
The pork carcass cutout value was down .69 at 90.08 FOB plant. Loins and ribs were lower, bellies were higher.
This week’s hog slaughter is on track to be significantly larger than last week, especially given preliminary plans for a Saturday kill as large as 90,000 head.
The hog kill was estimated at 425,000 head, the same as last week and 16,000 greater than last year.