Market Closes - September 20, 2013

Posted on Sep 20, 2013
Several factors pressured CBOT futures today with many contracts losing about two percent. More rainfall in the Corn Belt is relieving stress on soybeans that aren’t mature.  Harvest pressure will increase in the weeks ahead.  Financial markets continued their losses from Thursday, negating the sharp gains made Wednesday following the FOMC “no taper” decision (today one official suggested tapering may come in October). However, the US dollar held near steady.

Wheat futures lost the big gains made Thursday, pressured by lower prices in corn and soybeans, as well as talk that the Canadian crop could be larger than expected.

Technically, corn and wheat futures remain above key support, but soybean futures and soybean meal closed well below the support previously discussed around the chart gap.

A reminder: large funds are short corn and wheat futures, but long soybeans.

Cattle futures closed mostly higher with Feeders posting larger gains as CBOT futures fell. This afternoon’s Cattle on Feed Report showed smaller placements and smaller on-feed inventory than the average trader guess, so it’s expected cattle futures should strengthen next Monday.  COF results are shown below. Choice carcasses down 0.62 at 192.39; Select carcasses down 0.94 at 175.96/cwt.

Lean Hog futures closed sharply lower. Interestingly, the losses came during overnight trading followed by a sideways range during the day.  The Pork Cutout ended higher on the day.  The selling may have been some liquidation of the very large long position held by funds.

Corn Dec -8.5 451; Jly -8 479; Dec14 -7 491 Bean Nov -24 1315; Jly -23 1270; Nov14 -15 1171 Meal Oct -8 413; Jly -8 389 Oil -62 4209

Wheat Dec -11 646; Jly -11 657 KC -9 693; MGE -9 700

Oats -3 309

Rice -13 1555

LC Oct +2 12595; Dec +2 12975; Apr +22 13275 FC Sep -5 15710; Oct +85 16022; Jan +42 16040 LH Oct -110 9005; Dec -122 8607; Feb -72 8805 Milk Sep -2 1812; Oct +9 1809

US$ +.1% Dow -185 15451 SP -12 1710 NAS -15 3775 Tran -35 6692 VIX -.04 13.12

WTI -169 10470 Brent +53 10929 Gas -1 269 NG -3 369 HO steady 301 Eth -1.5 187

Gold -43 1326 Slvr -147 2177

2-yr unch 0.34% 5-yr -.01 1.48% 10yr -.02 2.74% 30yr -.04 3.77%

United States Cattle on Feed Down 7 Percent   Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 9.9 million head onSeptember 1, 2013. The inventory was 7 percent below September 1, 2012.

Placements in feedlots during August totaled 1.79 million, 11 percent below 2012. Net placements were 1.73 million head. During August, placements ofcattle and calves weighing less than 600 pounds were 405,000, 600-699 pounds were 338,000, 700-799 pounds were 430,000, and 800 pounds and greater were615,000. Placements for the month of August are the lowest since the series began in 1996.

Marketings of fed cattle during August totaled 1.88 million, 4 percent below 2012. Monthly marketings for August are the second lowest since the series began in 1996.

Kentucky Weekly Livestock Summary for September 13-19, 2013 Receipts This Week    Last Week   Last Year 22,801       23,138      20,114

Compared to last week:  Steers and Heifers sold steady to 2.00 higher.  Demand moderate to good.  Quality improved over last week as Spring Calves continue to filter into town.  Buyers becoming more selective on calves as the weather transitions from summer to fall which continues to complicate health conditions on fresh weaned calves.  The most notable shift in prices this week, however, took place in the Slaughter Cow and Bull market.  Compared to last week Cows and Bulls were 2.00-4.00 lower with instances of up to 6.00 lower on Bulls in some markets.  This comes with the closing of a medium size cow plant that has been in operation in Southeast for more than 50 years.

Supply:  Slaughter Cows 9 percent; Slaughter Bulls 3 percent; Feeder cattle 87 percent.  In the feeder supply, Steers made up approximately 41 percent and Heifers approximately 36 percent.  Steers and Heifers over 600 lbs totaled approximately 44 percent.  Replacement cattle 1 percent.

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Tagged Post Topics Include: Economics, Market updates