Uncertainty ahead of today’s USDA World Agricultural Supply and Demand Estimates report is pressuring most grain and soybean futures in overnight trading and could take cattle futures lower as well.\r\n As of 7:45 AM CT, March corn was down 4 ¼ cents a bushel to $4.76 3/4. CBOT Wheat was mixed with March up 6 ¼ cents to $6.52 ½ while May sank 4 1/4 cents to $6.49 3/4. Kansas City March wheat was down 3 ¼ cents to $7.12. And soybeans were down 9 1/4 cents to $14.48 ¼.\r\n Chinese crushers are said to have very negative margins, and cancelled some Brazilian soybean orders Friday, analysts said. Many feel it’s too late to cancel US orders, though, which is underpinning a weaker overnight trade.\r\n The USDA’s WASDE report is expected to show slight declines in US soybean ending stocks but small increases in stocks of corn and wheat. Estimates for world stocks, however, are expected to be down in all three major crops.\r\n Harvesting and logistical hiccups in Brazil are supporting soybean prices currently, analysts said. And if predictions for lower Brazilian production are accurate, the USDA may be forced to trim its production estimate, which it raised last month to 90 million tonnes from 89 million.\r\n Dry conditions in some areas of Brazil and flooding in others are being cited for lower soybean production estimates. Current guesses by analysts point to a figure just above 88 million tonnes, and two well-known analytical firms have even lower estimates: Oil World is at 84 million, and Cordonnier estimates 87 million.\r\n Argentine soybean production estimates average 53.5 million tonnes, down from February’s USDA estimate of 54.0 million, which was down from January’s 54.5 million. Some analysts have estimates below 53.0 million, but while many think weather issues there this year may have cut the crop to those levels, they feel the USDA is likely to make incremental cuts in its estimate.\r\n At the same time, a lack of US cancellations by Chinese soybean importers has many thinking the USDA may nudge its US soybean export estimate. \r\n Political issues in Ukraine are keeping corn traders nervous. The conflict has the potential to disrupt exports, even though it hasn’t so far. Some traders feel the USDA could bump its estimate of US exports based on continued demand, but many feel it may be too soon for USDA economists to make that move based on Ukraine issues. \r\n Live cattle futures appear to have stabilized after Wednesday’s reversal day. Thursday’s lower trade did not fill a gap on the daily chart for April futures, but Friday’s market turned in an inside day, trading between the previous day’s high and low, and closed right on its open, a “doji†on candlestick charts, which shows indecision.\r\n Given that feedlot supplies of slaughter-ready cattle remain tight going into the greatest demand period of the year, some see last week’s setback as just a little speculative profit taking that touched off some sell stops. They see the fundamental demand picture as unchanged amid slower beef production.\r\n Total slaughter last week was estimated by the USDA at 548,000 head, 3.86% lower the 570,000 of a week earlier and 9.01% below the 598,000 of a year earlier. \r\n The USDA estimated beef production last week at 438.6 million pounds, down 19.4 million, or 4.2% from 458,000 the previous week, and down 35.8 million, or 7.5% from a year earlier. Year-to-date beef production, at 4.326 billion pounds is down 7.0% from a year earlier.\r\n Cash cattle prices declined this week with average prices for fed steers and heifers ranging from $148 to $150 per cwt on a live basis, down $1 to $2 from $150 to $152 the previous week. \r\n The USDA reported mixed boxed-beef prices Friday, which may have accounted for the indecision in futures. The USDA’s choice beef value, at $236.02 per cwt was up $0.44, while select was $232.87, down $0.13. The choice/select spread widened to $3.16, but the number of fabricated loads sold into the spot market was a paltry 61.\r\n Feeder cattle moved higher Friday as corn prices declined, and further declines in corn today could increase buying interest again.\r\n The CME Feeder Cattle Index for the seven days ended Thursday was $172.48, up $0.22 while the March futures contract closed Friday at $172.37, up $0.97.\r\n
Cattle feeding is pretty straightforward - doing it profitably isn't.