By: NATHAN STUEDLE
St. Joseph Post
GRAINS:
July corn closed up 3 cents per bushel at $4.48 1/2 and September corn was down 2 1/4 cents at $4.25 0/1. July soybeans closed down 26 1/2 cents at $10.51 1/4 and August soybeans were down 27 1/4 cents at $10.47 1/4. July KC wheat closed up 5 1/4 cents at $5.28 1/4, July Chicago wheat was up 8 cents at $5.32 3/4 and July Minneapolis wheat was up 3 cents at $5.80.
Corn futures were mixed Thursday with spot July firmer on ongoing strong exports, while new-crop December continues to leak lower on the rapid planting pace and prospects for Corn Belt rain next week. Last week's corn export sales were again impressive, amounting to 86 million bushels (mb) of old and new combined. With total commitments now 28% higher than last year, it seems very evident that, even with the recent USDA increase, they are still underestimating U.S. corn demand. Wednesday's EIA petroleum report showed a 3% decline in ethanol production, but it is still running at a solid pace. Adding a bit of bearishness to new-crop corn was the decision by CONAB to raise Brazil corn production to 126.9 million metric tons (mmt) -- still shy of the USDA but a testament to better yields.
Soybean futures plunged Thursday, pressured by not only increasing South American soy estimates, but also pressured by the limit-down move in soybean oil. Bean oil, one day after ascending to a 2 1/2 year high and five consecutive higher finishes, fell hard to limit losses Thursday. Pressured by the fall in crude oil on the potential for rising stocks and on its own on biofuel news, spot July and deferred months fell to the daily permissible limit. Ideas that perhaps the extension of biofuel credits could take longer than first expected and that renewable mandates might be less than what the trade desired combined to weigh on oil. Also pressuring oil was unwinding of long bean oil, short bean meal spreads.
The wheat markets continued the mini-correction on Thursday, with Kansas City and Chicago up for the third consecutive day. Minneapolis is up for the first time after having scored another new contract low on Wednesday. Supporting wheat are a few weather issues around the globe, with both northern European and Chinese wheat areas looking dry for the next two weeks. Both of those areas have been shortchanged on moisture. Also supportive is word from consultancy Sov Econ that Russian wheat stocks have fallen to just 20.3 mmt and down 7.2 mmt from last year at this time. The Wheat Quality Council Tour's final yield came in at 53.0 bushels per acre.
LIVESTOCK:
It's another lower-trending day for the live cattle complex as traders seem to be growing anxious that they've overly supported the market here lately. Not helping the futures market's weakness is the mixed signaling from this week's fed cash cattle prices, as prices are currently trading steady/somewhat lower in the South but higher in the North. Live cattle in Texas are currently traded at $218, which is $1.00 lower than last week's weighted average, but a few sales have been reported in Kansas at $220, which is $1.00 higher than last week's weighted average. Meanwhile, dressed sales are being reported in Nebraska at $358, which is $2.00 higher than last week's weighted average. It is helpful, however, that boxed beef prices were higher today.
With the live cattle complex lower push, the feeder cattle complex has reacted even more aggressively as most contracts traded more than $6.00 lower into Thursday's closing bell. More than anything, today's move seems to be a sharp correction from traders' big push last week/early this week.
The lean hog complex bravely fronted a rally through Thursday's session, as the market pressures resistance thresholds that seemed too significant to challenge earlier in the week. But with a slightly improved export report and with pork cutout values a bit higher, traders are feeling encouraged to push the contracts higher.
Click HERE for audio