After several days of weaker prices, CBOT futures rose strongly today, beginning after the 830 am CT open. Wheat and Corn futures outperformed soybeans. Overnight futures weakness with no follow-through selling combined with positive export news encouraged buying that was amplified by technical buying as prices rose.  Brazil’s soybean harvest has been slowed by rain; a stronger Brazilian Real vs the US$ has also slowed sales by farmers. Market reports indicated that the spec funds were buyers on this first day of February. Wheat futures were supported by short-covering as the 2-week forecast has little precipitation for the southern Plains. Corn was supported by news that last week’s ethanol production hit a new record high, over 10% above year-ago levels. USDA reported that corn used for ethanol in December 2016 was 5.7% more than December 2015.

Interestingly, old and new-crop soybean futures peaked today at the 20-day moving averages.

Cattle futures traded both sides of unchanged with some trading ranges exceeding $2.00/cwt.  But at the close, Live Cattle were little changed and Feeder Cattle closed slightly lower on Monday’s Cattle inventory report and CBOT futures’ upside surprise. The February LC contract remains about $3.00 discount to today’s light-volume cash trade at $118-119, down $2-3 from last week. Stronger boxed beef values were supportive. Choice carcasses closed up 0.88 at 193.75; Select carcasses up 1.92 at 190.85. Midday quotes were 193.52 and 190.29. Technically, last week’s gap-down on the charts point toward $120 for April FC and $119 on the May FC.

Lean Hog futures closed narrowly mixed. February LH were supported by higher cash hog prices, but the pork cutout was weaker. FOB Plant Pork closed down 1.36 at 82.91 with lower values for hams, picnics and loins.  The midday quote was better at 83.71.  The February LH contract peaked at 70.00 today, essentially the contract high set in October 2015 and June 2016 – this makes for a triple top.  See CHART here.

Energy futures rose strongly on signs that Russia and OPEC are cutting output – even as U.S. oil, gasoline and distillate stocks increased more than expected.

Corn Mar +8 368; Jly +9 383; Dec +9 396 (386-96)

    New-crop Bean/Corn Ratio = 2.56

Bean Mar +12 1037; Jly +12 1054; Nov +11 1012 (995-1012)

  Meal +1 336

  Oil +46 3431

Wheat Mar +13 434; Jly +12 460 (443-60)

  KC +11 440; MGE +7 556

Oats +6 251

Rice unch 953

 

LC Feb -2 11557; Jun +2 10422; Aug +25 10022

FC Mar -70 12207; may -70 12062; Aug -80 12165

LH Feb +35 6942; Apr -15 6910; Jun +7 7767

Milk Feb +7 1678; Mar +3 1718
 

US$ +.2%

Dow +27 19891

SP +1 2280

NAS +28 5643

Tran -21 9171

  VIX -.19 11.80

 

WTI +107 5388

Brent +47 5570

Gas +3 158

NG +5 317

HO +4 167

Eth unch 151

Gold -3 1208

Slvr -9 1745

 

2-yr +.016 1.220%

5-yr +.027 1.933%

10yr +.026 2.477%

30yr +.031 3.082%

Lexington Auction Weighted Average Report for 01/31/2017
Receipts:  543    Last Week:  597    Year Ago:  451
   **Lexington Tuesday sale held at Richmond yards while new yards is under construction**

Compared to last Tuesday steer calves sold steady to 2.00 lower with moderate demand and heifer calves sold 2.00 to 5.00 lower with light demand.  Yearlings lightly tested. Quality was average through good. Market softer this week due to last Friday's bearish USDA cattle on feed report.  Slaughter cows sold steady with moderate demand. Slaughter bulls sold 3.00 higher with good demand.

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