“Buy the rumor, sell the fact,†appears to be the case this morning in grain and soybean futures markets after Crimeans voted Sunday to secede from Ukraine and join Russia. After building in risk premium last week on the prospect of the vote, the market appears to be taking it out now that the vote is done. Overnight prices are lower.\r\n News reports indicate most Ukranians are becoming resolved to losing the Crimean peninsula, but they are beginning also to express disappointment with western countries for their lack of support during the uprising. Western nations are poised to launch economic sanctions as soon as today, targeting dozens of Russians with Asset freezes and travel bans, but many Ukranians want the US and the EU to get tougher with Russia, saying sanctions won’t be enough to discourage Russia from accepting Crimea into Russia.\r\n But even though Russia appears to have broken its promise to respect the territorial sovereignty of Ukraine in the 1994 Budapest Memorandum, the US and Britain, which also signed the agreement, are reluctant to jump in with anything more than the sanctions.\r\n Meanwhile, things are moving swiftly in Crimea. Parliament has already adopted the Russian Ruble as the official currency with the Udranian Hryvnia to be the second official currency until 2016, according to news reports.\r\n But ports remain largely unaffected by the Ukranian unrest, and traders appear to be more comfortable with the ownership. \r\n What is affecting grain export possibilities more than the unrest itself is the slower farmer selling, market analysts say. The threat of inflation and core banking stability is encouraging farmers to hold inventory as a hedge against inflation, which has a secondary effect of withholding it from export markets as well.\r\n\r\nCHINA ECONOMY SHOWS FURTHER WEAKNESS\r\n\r\n Aside from the lack of Ukranian farmer selling, perhaps more important to world markets is weakness in the Chinese economy. The Yuan weakened slightly on Monday after the People’s Bank of China doubled the width of the currency’s allowed trading band against the US Dollar to 2% from 1%. \r\n The South China Morning Post said the last time the PBOC widened the trading band, in April 2012, it prompted an abrupt rise in spot market volatility in the Yuan and lifted it to the top of the band quickly.\r\n This time, things are calmer, but concerns about China’s economic growth have traders worried about prospects for further import growth as the Yuan sinks to an 11-month low against the US Dollar.\r\n Corn and soybean futures also are being pressured by talk of China reducing state reserves of both. The move could put extra stocks on the market either through sales or a lack of fresh government buying and take prices lower.\r\n That news joins continuing reports of China reselling Brazilian soybean orders because of a glut of soybeans there and very negative crush margins. Some sales also were attempted into the US with rumors of some loads coming to Eastern US ports, market analysts said.\r\n\r\nCATTLE MARKETS REMAIN STRONG\r\n\r\n Cash cattle markets were steady last week at $148 to $152 per cwt on a live basis and at and around $240 dressed, steady with last week’s record levels. \r\n Cattle markets this week could be delayed by the approaching monthly Cattle-On-Feed report Friday. Packers may be hoping that February’s slower slaughter rates will show up as a sharp drop in marketings and pressure cash cattle prices. Seasonal increases in placements also could lead to price pressure.\r\n Slaughter rates last week exceeded the prior week by 11,000 head, rising 2.02% to 555,000 head from 544,000 the previous week. However, slaughter was 7.35% below the 599,000 of a year ago.\r\n Packer margins may be squeezed this week if beef prices continue Friday’s slump. The USDA reported choice boxed-beef Friday at $240.44 per cwt, down $0.86 and select at $236.50, off $0.37. The choice/select spread narrowed to $3.94, and the number of fabricated loads sold into the spot market was only 76.\r\n Weekly boxed-beef prices, however, were up, with choice rising 1.87% from $236.02 and select moving up 1.56%.\r\n The CME Feeder Cattle Index for the seven days ended Wednesday was $173.60, down $0.10 while the March futures contract closed Thursday at $173.97, unchanged.\r\n
Cattle feeding is pretty straightforward - doing it profitably isn't.