Market Closes - March 4, 2014

Posted on Mar 4, 2014
The situation in Ukraine is fluid, with somewhat calmer rhetoric leading to reversals in the energy, equity and Treasury markets.  However, the grain markets rebounded from morning weakness to post strong closes.  Declining private estimates for South American production and global stocks boosted corn and soybean markets. Corn and wheat futures pushed higher steadily throughout the day.  Soybean strength relied entirely on the soaring soybean oil market which is probably due to heavy short-covering.

Cattle futures closed sharply higher with the deferred contracts beginning to track the nearby strength.  As Lean Hog futures and cash prices rally, cattle traders may be convinced that beef and cattle prices can continue to push even higher.  Feedlots appear to be offering cattle at $3-4/cwt higher than last week’s $150-151 trade. Today’s closing beef values are Choice carcasses up 2.64 at 231.76 and Select up 1.93 at 229.74/cwt.

The first five Lean Hog contracts closed up the limit of $3.00/cwt. April LH futures outpaced the rise in cash hog prices.  April LH is almost $13.00 premium to the CME Lean Hog Index.  The Pork Cutout value reversed morning losses of about a dollar/cwt to finish the day up about $1.30.

Lean Hog electronic trading has already reopened for trade date March 5. Futures are up over a dollar/cwt on top of the $3.00 gains posted Tuesday.  Fear of the unknown impact of PEDv on 2014 hog supplies is likely encouraging speculative buying.  When will high prices cure high prices?  Poultry producers see lots of opportunity resulting from expensive beef and pork.

The CME Group raised Lean Hog Futures margins by 20 percent due to the higher valued contracts and increased volatility and price risk.

Corn May +14 484 (465-85); Jly +13 488;          Dec +10 486 (471-87) Bean May +14 1423 (1404-26); Jly +15 1396 Nov +10 1181 (1169-84) Meal May -1 450; Oct -1 363 Oil +133 4371 Wheat May +12 643; Jly +11 647 (625-49) KC +9 709;  MGE +13 685 Oats +11 493 Rice +4 1543

LC Apr +150 14562; Jun +210 13700; Oct +147 13772 FC Mar +112 17290; Apr +127 17435; Aug +127 17685 LH Apr +300 limit 11167; Jun +300 11575; Oct +235 9620 Milk Mar +21 2210; Apr unch 2026

US$ +.1%

Dow +228 16396 SP +28 1874 NAS +75 4352 Tran +163 7466 VIX -1.90 14.10  -12%

WTI -159 10333 Brent -217 10903 Gas -4 298 NG +17 466 HO -4 304 Eth -1 228

Gold -16 1334 Slvr -26 2119

2-yr +.03 0.33% 5-yr +.08 1.54% 10yr +.10 2.70% 30yr +.09 3.65%

Blue Grass Stockyards Cattle Report for 03/04/2014

Receipts:  214 Last Tuesday:  1,408 Year Ago:  955 Compared to Monday’s sale no comparison - sale cancelled yesterday due to winter storm Sunday night.  Light run of cattle this week due to heavy snow over much of the state that brought school closings to every county in the state on Monday.  Quality was plain through average.  Market was mostly steady on all classes in a light test compared to last week.  Yearling steers and heifers not tested.  Slaughter cows and slaughter bulls and slaughter bulls sold steady in a light test.

Total supply included 20% slaughter cows, 02% slaughter bulls, 13% replacements and 65% feeders.  Feeder supply 65% steers, 22% bulls, 33% heifers with 31% of feeders weighing over 600 lbs. 

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Tagged Post Topics Include: Economics, Market updates