Market Closes - November 21, 2016 - Kentucky Farm Bureau

Market Closes - November 21, 2016

Posted on Nov 21, 2016

CBOT futures closed higher, led by a sharp move up in the soy complex. Soy futures moved higher on Sunday evening, paused during the night, then charged higher throughout the daytime trading. Initial buying may have been technical in nature, encouraged by Friday’s close above the key 200-day moving average. Futures were also supported by the strong palm oil market. The second wave of buying kicked in this morning with USDA reporting last week’s export shipments were much better than traders expected. Adding support were outside markets, including a weaker US Dollar Index and sharply higher energy futures. For soybean futures to rally much, soybean meal has to as well – and it led the way today with a 3% jump.  Corn futures gained better than one percent with support from the soy complex, a weaker US Dollar and strong weekly export shipments(inspections).

Live Cattle futures closed slightly higher but well off the day’s midday highs on late-day profit-taking. Futures rose quickly following the opening bell on support from Friday’s neutral Cattle on Feed Report and last week’s strong cash cattle market which averaged $107.91/cwt per USDA (a high of $110 reported); this is 13.6% below the year-ago cash market. Last week’s beef production was 9.1% greater than a year ago. (Pork production was up 4.6% and broiler meat production up 5.2%). Boxed beef was stronger today with Choice up 2.73 at 185.68; Select up 1.72 at 168.73. 

This chart from USDA’s Weekly Livestock, Poultry & Grain Market Highlights report shows the spread between the Dressed Steer Price and the Choice Beef Cutout (wholesale value) has narrowed considerably recently.

Feeder Cattle futures traded wide ranges today but closed lower with a sharp sell-off in the final 30 minutes of trading.

Lean Hog futures closed higher with sharp gains in the December and February LH contracts. Gains were made at the opening bell and continued into the close. Stronger pork cutouts were supportive and technical buying kicked in as LH futures rose above the 3-week sideways trading range. LH futures are at a 2-month high. Large packer margins suggest there’s room for hog prices to rise. FOB Plant Pork gained .49 to 73.49 with large variation in price changes for different cuts: Butt +6%, picnic +5%, and ham -4%.

This USDA chart shows how large the hog packer margins have grown since June. This is the same time frame when December LH futures dropped from mid-$60s to low $40s.

Corn Dec +4 350 (345-50); May +4 364

Bean Jan +26 1020 (995-1021); May +25 1036

  Meal +9 320

  Oil +59 3464

Wheat Dec +2 410; Jly +1 455 (451-57)

  KC +1 414; MGE -2 527

Oats -8 225

Rice +17 981


LC Dec +70 10902; Apr +62 10952; Jun +40 10077

FC Jan -80 12417; Apr -80 11957; Aug -75 11950

LH Dec +197 4977; Feb +220 5637; Jun +107 7432

Milk Dec +4 1698; Jan +7 1640

US$ -.3%

Dow +89 18957   New record highs in stock indexes.

SP +16 2198

NAS +47 5369

Tran +41 8897

VIX -.68 12.17  -5.3%


WTI +179 4748

Brent +211 4897

Gas +6 140

NG +13 297

HO +7 153

Eth +3 160

Gold +5 1214

Slvr -5 1657

2-yr +.016 1.076%

5-yr -.008 1.771%

10yr -.018 2.319%

30yr -.017 3.000%

Kentucky Weekly Livestock Summary for the week of Nov 14-19, 2016.
This Week            Last Week         Last Year
27,494               20,038            18,700

Compared to last week steer and heifer calves were mostly 1.00 to 3.00 higher with instances 5.00 to 8.00 higher noted for feeders below 600 lbs.  Demand was moderate to good for a good to very good quality offering.  Yearlings sold 2.00 to 5.00 higher with light to moderate demand.  Slaughter cows and slaughter bulls sold mostly steady to firm with moderate to good demand. Unseasonably warm temperatures prevailed this week as severe drought conditions and wildfire threats continued to grow in the region.

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