The 3-day weekend ended with a surge in most agricultural futures markets, led by wheat and soy complex futures. The fuel for the soy rally was reductions in private forecasts of Brazilian soybean production and a jump in the price of palm oil.  The short-covering rally in all 3 wheat exchanges accelerated today as other markets rally and concern lingers about the degree of winterkill. Corn futures followed beans and wheat higher as the funds are now long corn and want the price to go up.

Outside markets were supportive today with a weaker US dollar and surging energy prices.  Energy futures rallied on expectations of declining U.S. oil inventories and increased geopolitical risk to supplies.

Cattle futures closed strongly higher following a sharp jump in beef values on Monday and follow-through strength again today.  Choice up 1.01 at 211.99; Select up 1.70 at 210.72/cwt.  Live Cattle haven’t reached the highs set in January but Feeder Cattle futures hit new contract highs.

Lean Hog futures closed sharply higher after gapping higher on the opening. April futures are now priced at an extreme premium to the cash market.  Presumably, the bullishness is tied to fears that PED Virus has reduced the pig crop coming to market in the weeks/months ahead.

Corn Mar +4 449 (444-50); Jly +5 460; Dec +4 464 (458-64) Bean Mar +23 1361 (1335-62); Jly +23 1330; Nov +7 1138 Meal Mar +7 457;  Oct unch 356 Oil +121 4036 Wheat Mar +13 612; Jly +11 611 KC +11 686;  MGE +13 679 Oats +7 429 Rice +27 1585

LC Feb +115 14375; Apr +102 14212; Oct +80 13525 FC Mar +122 17170; Apr +185 17320; Aug +155 17500 LH Apr +120 9737; Jun +120 10732; Oct +85 9077 Milk Feb unch 2314; Mar +22 2126

US$ -.1%

Dow -24 16130 SP +2 1841 NAS +29 4273 Tran -75 7232 VIX +.30 13.87

WTI +287 10317 Brent +149 11067 Gas +3.5 284 NG +35 556  +6.7% HO +2 310 Eth +4 209

Gold +3 1322 Slvr +52 2194

2-yr -.02 0.30% 5-yr -.05 1.48% 10yr -.04 2.71% 30yr -.02 3.68%

Blue Grass Stockyards Cattle Report for 02/18/2014

Receipts:  1,574   Last Tuesday:  720   Year Ago:  635

Compared to Monday’s sale steer calves under 600 lbs sold 5.00 higher with very good demand; over 600 lbs sold steady to firm with good demand. Heifer calves under 500 lbs sold 5.00 higher with very good demand; over 500 lbs sold steady to firm with good demand.  Quality was average through attractive.  Yearling steers sold 1.00 to 2.00 higher with very good demand compared to last week.  Yearling heifers limited comparison with last week.  Market very active especially for featherweight calves today.  Slaughter cows and slaughter bulls sold steady with very good demand. Total supply included 06% slaughter cows, less than 01% slaughter bulls, 01% replacements and 93% feeders.  Feeder supply 53% steers, 08% bulls, 39% heifers with 62% of feeders weighing over 600 lbs.

Foreigners own nearly half of U.S. government debt   Overseas investors held 48.8 percent of the $11.9 trillion in publicly tradable U.S. government debt outstanding at the end of 2013. For all of 2013, foreign holdings of Treasuries rose 4 percent or by $221.1 billion, the smallest rise since 2006.  China owns $1.27 trillion and Japan owns $1.18 trillion, according to Treasury data. Source:  Bloomberg.com

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