The rally in CBOT futures rolled on today with strong price moves in nearly every commodity, but especially in corn, wheat, soybean meal and soybean futures; these four closed at or near the day’s highs. Soybeans, up four straight days, were supported by news that China’s March 2016 soybean imports were record large (for March) and ideas that excessive rain is reducing Argentina’s soy crop. Yesterday, USDA raised U.S. soybean exports by 15 million bushels and lowered the 15/16 ending stocks estimate by that same amount. After this week’s sharp rally, soybean futures are considered “overbought” based on the RSI; this measure suggests the rally may need to pause or even correct lower.
The corn and wheat rally was fueled by short-covering by the spec funds and spillover support from the soy complex. May Corn has chart resistance at 3.78. KC Wheat lagged Chicago Wheat due to a rainy forecast in dry areas of the Plains. Also, USDA raised 15/16 ending stocks from 966 to 976 million bushels. CBOT rallied despite a sharp .8% jump in the US Dollar Index. Also ethanol production fell abruptly last week, but price is on the rise – up a nickel since Friday.
This strong price rally is occurring just as planting activity should accelerate given that the 6-10 day and 8-14 day forecasts call for above-normal temperatures and mostly normal precipitation.
Cattle futures closed sharply lower and near the day’s lows which came late in the session. Futures fell despite this week’s strong beef markets. Boxed beef values rose over one percent with Choice up 2.90 to 222.21 and Select up 2.89 to 212.53. Midday quotes were close to these prices. April LC is now at a sharp discount to last week’s cash cattle price; a steady or stronger cash market would likely bring futures back up. The weather in the eastern US is turning favorable for grilling.
Except for the April contract, Lean Hog futures closed strongly lower. The large premium the deferred LH contracts have to the cash index encouraged selling. Cash hog prices were mixed but pork values and movement were stronger. FOB Plant Pork jumped 1.12 to 78.12 with gains in all cuts except ribs. FPP was up 1.13 at midday.
Corn May +11 373; Jly +11 377; Dec +10 384
Bean May +19 956; Jly +20 964; Nov +18 966
Meal +8 293
Oil +27 3396
Wheat May +9 461; Jly +9 467; Dec +8 492
KC Jly +7 465; MGE +3 527
Oats +4 192
Rice +10 989
LC Apr -135 13217; Jun -112 12172; Oct -32 11735
FC Apr -47 15480; Aug -115 15080; Oct -120 14810
LH Apr -7 6652; Jun -110 7810; Oct -122 6817
Milk Apr -7 1374; May -8 1370
Dow +187 17908
SP +21 2082
NAS +75 4947
Tran +202 7961
VIX -.99 13.86 -6.7%
WTI -62 4155
Brent -80 4389
Gas -1 153
NG +3 155
HO -1 126
Eth +3 155
Gold -15 1244
Slvr +2 1624
2-yr +.011 0.750%
5-yr +.002 1.216%
10yr -.017 1.764%
30yr -.026 2.580%
Lexington Auction (Tues)
Weighted Average Report for 04/12/2016
Receipts: 473 Last Week: 1147 Year Ago: 1048
****Lexington Tuesday’s sale now held at Richmond yards due to fire that destroyed Lexington yards****
Compared to last Tuesday’s sale steer calves under 600 lb s sold 2.00 to 4.00 lower with moderate demand; over 600 lbs sold steady to firm. Heifer calves sold steady with moderate demand. Market more active today than yesterday due to increased buyer participation and some farmer participation in the market. Yearling steers traded steady to firm with moderate demand. Quality was average through good. Slaughter cows and slaughter bulls sold steady with moderate demand.