Market Closes – April 25, 2014

Looking at the week overall, corn and wheat futures and new-crop soybeans trended higher after taking a hit on Monday, but old-crop soy futures trended lower until today’s sharp rally that wiped out about half of this week’s losses.

Fundamental factors remain the same with market support coming from drought in the Plains, delayed corn planting due to weather, and tensions in the Ukraine.  Old-crop soy futures have been weighed down by China’s cancellation of nearby shipments from Brazil (which some of these beans diverted to the U.S.).

So far the large funds are sticking with their huge long positions in corn and soybeans.  After liquidating some during the week ending April 22 (CFTC report), they probably have been buyers since then.

Cattle futures closed higher today finishing off a good week that began Monday when April LC bounced off chart support in the $142.50 area. Although beef values and cash cattle traded lower today ($145-146), traders are optimistic that retail demand will support the market as grilling season ramps up.  Boxed beef: Choice down 0.97 at 232.83; Select down 0.43 at 221.64/cwt.  AFTER the close, USDA released the Cattle on Feed Report (see below); traders consider it friendly since March feedlot placements came up quite short of expectations. March marketings were the lowest on record.

LH futures closed lower and near the day’s lows, with a sharp loss in the nearby May contract.  Pressure came from much lower cash hog prices and weakness in the pork cutout. FOB Plant Pork dropped .57 to 116.13/cwt.  May LH futures have traded within the $120-124 range the past two weeks.  The June LH contract has been trending higher for the past three weeks after a sharp drop during March and early April.

Corn May +6 507 (hi 511); Jly +5 513; Dec +3 506 (503-10)
Bean May +26 1498 (hi 1500); Jly +24 1494; Nov +9 1240 (1227-41)
Meal May +10 491; Oct +5 393
Oil +33 4292
Wheat May +11 700; Jly +12 708 (695-710)
KC +14 779; MGE +10 749
Oats +1 402
Rice +1 1542

LC Apr +75 14500; Jun +92 13677; Oct +80 13967
FC May +40 18000; Aug +57 18462; Oct +87 18512
LH May -197 12092; Jun -102 12452; Oct -52 10177
Milk May -16 2270; Jun +2 2083

US$ unch
Dow -140 16361
SP -15 1863
NAS -73 4076
Tran -124 7586
VIX +.74 14.06

WTI -134 10060
Brent -75 10958
Gas -1 307.5
NG -6 465
HO -3 299
Eth +4 225

Gold +10 1301
Slvr unch 1969

2-yr -.01  0.435%
5-yr -.015 1.725%
10yr -.015 2.665%
30yr -.015 3.445%

United States Cattle on Feed Down 1 Percent
     Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.9 million head on April 1, 2014. The inventory was 1 percent below April 1, 2013. The inventory included 7.07 million steers and steer calves, up 2 percent from the previous year. This group accounted for 65 percent of the total inventory. Heifers and heifer calves accounted for 3.71 million head, down 6 percent from 2013.

Placements in feedlots during March totaled 1.80 million, 5 percent below 2013. Net placements were 1.73 million head. During March, placements of cattle and calves weighing less than 600 pounds were 425,000, 600-699 pounds were 290,000, 700-799 pounds were 465,000, and 800 pounds and greater were 615,000.

Marketings of fed cattle during March totaled 1.66 million, 4 percent below 2013. Marketings for March are the lowest since the series began in 1996.

Kentucky Weekly Livestock Summary for April 18-24, 2014
Receipts
This Week     Last Week   Last Year
22,870        21,584      23,387

Compared to last week:  Steer and Heifer calves mostly 2.00 to 4.00 higher with instances of up to 10.00 higher on calves under 400 lbs.  Yearling Steers and Heifers sold steady to 2.00 higher.  Demand good to very good on an average to attractive offering.  Attractive set of calves offered this week was well met.  Many who have waited for lower prices have finally given in to current price levels and were active this week, providing push on the calf market.  Feeder and yearling type steers aided by positive moves in Boxed Beef and higher futures.  The looming question in producers minds now is the value of replacement females.  Many purebred sales are including commercial females, which have set the precedent for replacement cattle.  The obvious demand for those quality females lent support to the Heifer complex this week in particular, as cheaper feed becomes more readily available in the form of forages.  Receipts likely to begin their seasonal decline as field work is on the minds of many producers which could also have been supportive to prices for the week.

Slaughter Cows steady to 2.00 higher.  Slaughter Bulls steady. Slaughter prices remain surprisingly strong given that one regional packer had been out of the market.  This underscores the reality of short numbers and the demand for lower priced protein.

Supply:  Slaughter Cows 9 percent; Slaughter Bulls 1 percent; Feeder cattle 88 percent.  In the feeder supply, Steers made up approximately 37 percent and Heifers approximately 38 percent.  Steers and Heifers over 600 lbs totaled approximately 38 percent.  Replacement cattle 2 percent.
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