Grain, Soybeans Mixed; Soybeans Provide Support

Grain and soybean futures are mixed in overnight trading as soybeans provide support to other markets as tight-ending-stocks worries keep investors buying.\r\n   Many traders were said to be expecting further gains in March soybeans now that Jan is off the board.  \r\n   Chinese demand has pushed sales of US soybeans above the USDA estimates.  Traders keep expecting China to cancel some orders but beans continue to be loaded out of US Gulf ports actively.\r\n   Chinese buyers are expected to turn to Brazil for their next wave of soybean purchases as the harvest there progresses, but so far they have made no moves to cancel US orders and switch to Brazil.\r\n   The National Oilseed Processors Association’s monthly crush report is scheduled for today, and many expect the association to report robust, even record, crush activities as positive crush margins kept the plants humming in December.\r\n   The latest forecasts from South America indicate possible rains in Argentina over the weekend and early next week.  The rain is expected to cool temperatures and relieve crop stress in growing regions.\r\n   AgResource reported that China had rejected another two cargoes of US DDGs for the presence of a banned GMO gene.  Gulf DDG bids were said to be steady, however.\r\n   Farmers continue to sell corn on the advice of market analysts who see the coming South American crop and more-than-adequate US stocks as bearish in the long term.  Many also want to be sold out before those South American crops have a chance to undermine current US prices appreciably.\r\n   Paul Georgy, president of Allendale Inc., pointed out that the Baltic Dry Index, which reflects the daily charter rate for vessels carrying dry cargo, is down 18% in the last two days.\r\n   At the same time, stocks are generally firmer in overnight trading, and the US Dollar is up as well as optimism over the US economy nudges them higher.  Stocks are expected to rise today after a four-session retracement linked to nervousness after the December jobs report, according to the Financial Times.  \r\n   A higher US dollar could be cutting into world demand for dollar-based commodities, which in the long run would limit price advances and could be part of the lower Baltic Dry Index.\r\n   As beef prices hit new record highs day after day, there is a growing unease among traders that the market will top out and then plummet, especially since cheaper pork and chicken products are available.\r\n   The USDA’s pork cutout was up $2.73 per cwt Tuesday as futures rallied and left strong technical signals for today, so some product switching at the wholesale level may already be taking place.  At the very least, retail meat buyers could be playing beef against pork, and what better way to do that than to buy a little more pork.\r\n   However, beef cutout levels continue to rocket higher as tight supplies allow packers to pass along most of the latest cost increases for fed cattle, market analysts said.\r\n   The USDA reported sharply higher boxed beef prices Tuesday, setting another record high for the eighth straight day amid moderate demand and light-to-moderate offerings from the packers.\r\n   The USDA’s choice cutout Tuesday was reported at $221.04 per cwt, up $4.10 on the day, while the select cutout also set a new record high at $219.35 per cwt, $4.59 on the day.\r\n   The choice/select spread narrowed to $1.69, and AgResource said it expects it to get near zero as product availability tightens, and buyers seek the less-expensive select product.  There were 116 load of fabricated product sold into the spot market Tuesday.\r\n   Cash cattle prices established another record high last week, trading $2 to $3 per cwt higher at $139 to $140 and at $220 to $222 on a dressed basis.  \r\n   No cash cattle trading was reported in the Plains Tuesday.  Asking prices were holding at $141 to $142 per cwt on a live basis and around $225 or higher in dressed markets.  The combination of lower showlists and higher boxed-beef prices encourages sellers to hold on.  \r\n   No bids are being reported.\r\n   The CME Feeder Cattle Index for the seven days ending Monday is $171.15, down $0.05 on the day.  By contrast, the Jan feeder cattle contract settled Tuesday at $168.60 per cwt, up $0.77.\r\n