Trading in grain, soybean and livestock markets may be somewhat subdued as traders even their positions ahead of Monday’s Martin Luther King Jr. holiday. \r\n Overnight markets are fairly quiet with the broad trend lower, and Agrimoney.com quoted Benson Quinn Commodities saying the day could bring more profit taking, referring in particular to soybeans, which has risen $0.36 ½ since Friday’s settlement through Thursday’s settlement.\r\n Overnight soybean prices have eased, despite a firm market in China, the world’s top importing country, today, giving evidence that modest profit taking may be the rule of the day.\r\n However, Chinese soymeal futures lagged, leading some to theorize that the market was losing steam as livestock slaughter increased and soymeal demand eased ahead of the Lunar New Year’s holiday.\r\n Additionally, South American weather forecasts are more favorable for crop development, and corn and soy markets may be inclined to remove weather premium.\r\n But soybean demand may still be stronger than current stockpiles can supply comfortably through the year, according to Richard Feltes at RJ O’Brien in the Agrimoney story.\r\n “We see no change in narrative that US is using too many beans too fast, on the heels of accelerated US crush rates and brisk soybean inspections and sales,†Feltes said.\r\n And while traders remain concerned about Chinese soybean cancellations, it hasn’t happened yet, and US Gulf loadings continue at a good clip.\r\n Chinese rejections of corn cargoes for the presence of an unapproved GMO variety are a more tangible threat to trade. Many exporters have stopped selling to China, and alternative markets for rejected cargoes are hard to find. And the USDA reported Thursday that 170,000 tonnes of corn for China had been cancelled along with another 126,000 tonnes of unknown-destination corn that was widely thought to be headed for China.\r\n US wheat markets aren’t exciting either, market analysts said. Despite selling a load of Soft Red Winter wheat to Egypt, with rumors of a couple of Hard Red Winter wheat cargoes out of the Gulf, the presence of India with large volumes of wheat that could go to export overhangs the market.\r\n US wheat markets could get some support next week, however, as arctic air is forecast to drop into the US again, ending the January thaw. Much of the wheat now has no snow cover and would be vulnerable to winter kill. The problem with winter kill for the market is that it can hide from farmers until spring when the crop exits dormancy.\r\n The snow-cover problem is not an issue in Russia as reports indicate the crop has a good blanket and can withstand a blast of arctic air.\r\n Corn and soybean markets received support Thursday from better-than-expected export sales numbers from the USDA. Soybean sales already exceed USDA estimates by 2%, and 80% of the estimated US export sales of corn have already been sold as Taiwan overnight bought 60,000 tonnes of US corn.\r\n Cattle futures settled back from record highs Thursday but still closed at a record-high price. Tightening fed cattle supplies are generally cited for the increase.\r\n Boxed beef prices continued to climb Thursday, with the USDA’s choice cutout ending the day up $4.17 to $228.79 and select up $3.60 to $225.51. The choice/select spread widened to $3.28, and there were 99 loads of fabricated product sold into the spot market. \r\n Paul Georgy, president of Allendale Inc., pointed out that beef movement is down nearly 30% from the same period last year. He also said, “Futures markets are overbought and sharp setbacks could happen at any time.\r\n Lean hog futures are seeing spillover support from live cattle markets, and there is increasing talk of more interest in “the other white meat†from retailers, and backed-up hog supplies could be getting cleaned up.\r\n The CME Feeder Cattle Index for the seven days ending Wednesday is $171.34, up $0.18 on the day. By contrast, the Jan feeder cattle contract settled Thursday at $169.80 per cwt, up $0.40.\r\n
Cattle feeding is pretty straightforward - doing it profitably isn't.