Market Update - January 20, 2015

Posted on Jan 20, 2015
CBOT futures are lower to sharply lower (in soy complex). Outside markets are weighing on prices as the US Dollar is stronger and energy futures are lower. Soybeans are under pressure from favorable weather in South America and by China’s cancellation of some U.S. export cargoes (switching to South American source as harvest ramps up). Also China’s GDP growth is the lowest in many, many years. The IMF lowered global GDP growth for this year and 2016. The US Dollar is supported by expectations that the European Central Bank will announce a large bond-buying program (quantitative easing) to lower interest rates in the EU.

Cattle futures started the day near unchanged but aggressive selling quickly took futures down sharply with Live Cattle now down the daily $3.00/cwt limit. Boxed beef dropped about a dollar/cwt yesterday, so last week’s downtrend in cash markets may be continuing. Much of the downside in cattle futures has been from liquidation of the speculative long position – this apparently continues today.

Lean Hog futures are down sharply on spillover pressure from widespread selling in commodities. Cash markets are also weak. FOB Plant Pork is down .62 to 83.91 on weaker belly values. The February LH contract is now at a new contract low, dropping below its price when trading started in August 2013. This contract rallied to $100 last July and was as high as $93 in mid-November.

Corn Mar -3 384; Jly -3 398; Dec -3 412 Bean Mar -19 973; Jly -19 984; Nov -15 960 Meal Mar -5 321 Oil -47 3292 Wheat Mar -7 526; Jly -5 533 KC -10 567; MGE -5 579 Oats +1 290 Rice -5 1127

LC Feb -300 limit 15145; Apr -300 14995; Oct -282 1487 FC Jan -37 21372; Mar -337 20147; Aug -340 20580 (limit=450) LH Feb -207 7242; Apr -265 7502; Jun -212 8452 Milk Jan unch 1601; Feb -10 1433

US$ +.4%

Dow -.7% SP -.5% NAS -.4% Tran +.2% VIX -.8% 20.78

WTI -4% Brent -.8% Gas -2% NG -9% HO -1.8% Eth +.4% Gold +1.5% Slvr +1.1%

5-yr -.030 1.255% 10yr -.042 1.773% 30yr -.056 2.381% Blue Grass Stockyards Cattle Auction Report for 01/19/2015 Receipts: 1245 Last Week: 1175 Year Ago: 1686 Compared to last week steer calves sold steady with moderate to good demand except 500-700 lbs 3.00 lower with moderate demand, featherweights firm with good demand. Heifer calves sold steady to 3.00 lower on middleweights with moderate demand, except featherweights were firm with good demand. Quality was average through attractive. Yearlings lightly tested. Slaughter cows and slaughter bulls sold steady with good demand. Total supply included 11% slaughter cows, 02% slaughter bulls, 02% replacements and 85% feeders. Feeder supply 35% steers, 26% bulls, 39% heifers with 39% of feeders weighing over 600 lbs.

Tagged Post Topics Include: Economics, Market updates