Aided by a weak US dollar, CBOT futures rallied sharply on fund buying as more traders believe actual crop yields will be lower than USDA’s estimates from early August. Any cut in supply has to be met with reduced demand and that should require higher prices. But we’ll know how high of price it takes to get the job done ONLY AFTER the fact and prices have dropped.

Technically, soybean futures broke up through the top of triangle formation on Monday, followed by a move above the highs posted during July 2012.  The nearby September contract faces resistance at the $17.77 ¾ high posted by the August 2012 contract in mid-July.  This is the all-time record high for the nearby soybean futures contract.

CBOT wheat futures matched gains in corn today. Support comes from more wheat being fed in place of corn and worries that global wheat production is coming down.

Live Cattle futures dropped on pressure from a weaker boxed beef value.  Feeder cattle prices were hurt by the continued rise in feed costs.

Note in the chart below that the recent rise in the CHOICE Beef Cutout value mirrors the rise seen at the same time in 2010 and 2011. However, the seasonal trend will work against beef prices over the next few weeks.

Corn Sep +16 831; Dec +15 839; May +12.5 829

Bean Sep +50 1753.5; Nov +49 1732.5; May +44.5 1529

Meal +11 544

Oil +168 5557

Wheat Sep +21 900; Dec +19 922; Jly +7 861

KC +17 908; MGE +14 945

LC Aug -170 11965; Oct -85 12462; Feb -32 13177

FC Aug -75 13980; Oct -165 14240; Jan -140 14632

LH Oct -10 7580; Dec -55 7305; Feb -15 8095

Milk Aug -1 1764; Sep +10 1915

Oats +8 397

Rice +12.5 1572

The Pork Cutout value dropped $2.09 to $89.56/cwt. Lean Hog futures closed down slightly on the negative cash market tone.

Energy futures continue to edge higher supported by the weaker US dollar and media reports that Israel may attack Iran before November.  Higher energy futures also lifted soybean oil futures to 3 percent gains.

 

US$ -.65%

Dow -68 13204

SP -5 1413

NAS -9 2067

Tran +4 5194

VIX +1.00 15.02

WTI +73 9699

Brent +102 11472

Gas +3 306

NG +5 282

HO +3 312.5

Eth +4 267

Gold +16 1636

Slvr +67 2926

2-yr +.004 0.291%

5-yr -.005 0.787%

10yr -.010 1.800%

30yr -.024 2.900%

 

Blue Grass Stockyards

Cattle Report for 08/21/2012  Close

Receipts:  989   Last Tuesday:  1,061   Year Ago:  1,602

Compared to Monday's sale steer calves sold steady with good demand.  Heifer calves sold steady to 2.00 higher with good demand.  Yearling steers sold steady with good demand.  Yearling heifers limited comparison.  Slaughter cows and slaughter bulls sold steady with good demand.

Total supply included 04% slaughter cows, 2% slaughter bulls, less than 1% replacements and 94% feeders.  Feeder supply 63% steers, 13% bulls, 24% heifers with 62% of feeders weighing over 600 lbs.