CBOT futures closed mixed with soybean and meal futures breaking the pattern seen in the rest of the grain futures. The soy rally was powered by the expiring August Soybean contract which soared 34 cents due to cash market tightness and a lack of soybean stocks which can be used to satisfy the CBOT August contract. Those short the August contract are getting “squeezed” and have to pay up to get out. This is the reason farmer-hedgers are advised to NOT hold nearby futures positions into the month of delivery.

In two days, wheat futures have destroyed 50-75% of the price rally that took about 6 days to build. The funds are large shorts in wheat and added to that today. Traders will spend Monday getting positioned for Tuesday’s USDA Crop Production report and the updated WASDE.

Geopolitical turbulence hit the Cattle futures this week in a big way as cattle futures traded limit down for two straight days. In retaliation to recent sanctions the US has imposed on Russia for threatening Ukraine, Russia has banned the import of all US beef, pork and poultry, as well as the same from some other western countries. This will increase competition between exporters. The August LC contract has lost half its July rally and the October LC contract has lost all of its rally or about $11.00/cwt. Expect cattle futures to remain volatile as traders assess beef demand. Choice carcasses down 1.96 at 260.45; Select carcasses down 2.26 at 253.00.

Lean hog futures continue to head lower on ideas that hog numbers may be bigger than expected and from spillover pressure from the cattle pit. The pork cutout is chasing LH futures lower. FOB Plant Pork cutout fell 1.43 to 124.99/cwt.

Corn Sep -8 352; Dec -8 363; Dec’15 -6 406 Bean Sep +14 1114; Nov +7 1085; Nov’15 +1 1084 Meal Sep +4 368 Oil -18 3552 Wheat Sep -12 549; Dec -13 566; Jly -14 604 KC -17 629; MGE -16 619 Oats -1 358 Rice -7 1266

Cattle futures contracts closed LIMIT DOWN of $3.00/cwt LC Aug 15255; Oct 15000; Feb 15110; Apr 15020 FC Aug 21532; Oct 21397; Mar 20550 LH Aug -100 11422; Oct -92 9932; Dec -267 8915 Milk Aug +1 2177; Sep -22 2154

US$ -.15%

Dow +186 16554 SP +22 1932 NAS +36 4371 Tran +100 8092 VIX -.89 15.77

WTI +31 9765 Brent -74 10470 Gas -2 275 NG +9 396 HO -2 288 Eth +2 203 Gold -1 1310 Slvr -5 1994

2-yr +.012 0.448% 5-yr +.018 1.620% 10yr -.002 2.422% 30yr -.005 3.230%

Aug 8, 2014 USDA-KY Dept of Ag Market News Kentucky Weekly Livestock Summary for the week of Aug 1-7, 2014 Receipts This Week Last Week Last Year 19,285 19,183 22,092 Compared to last week steers sold steady to 2.00 higher with very good demand, heifer calves sold 2.00 to 4.00 higher with very good demand. Quality was good through attractive. Yearling steers sold 2.00 to 3.00 higher with very good demand. Yearling heifers sold steady in a light test. Market remains active for stocker calves especially for the few weaned calves on the market. Slaughter Cows and Slaughter Bulls sold steady to 3.00 higher with good to very good demand. Supply: Slaughter Cows 8 percent; Slaughter Bulls 2 percent; Feeder cattle 89 percent. In the feeder supply, Steers made up approximately 40 percent and Heifers approximately 34 percent. Steers and Heifers over 600 lbs totaled approximately 45 percent. Replacement cattle 1 percent.

 

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