Profit Taking, Macro Concerns Take Grains, Soybeans Lower

Grain and soybean futures are lower in overnight trading as traders take profits on long positions and macro-economic concerns about the viability of US exports over the next few months sharpen.\r\n   However, live cattle and lean hog futures are up amid tightening supplies and steady consumer demand.\r\n   Margin liquidation also is a dominant force going into first notice day and the last trading day of February.\r\n   Tuesday’s USDA announcement that an additional 568,000 tonnes of old-crop soybeans had been sold to an unknown destination initially supported futures and was partly behind Tuesday’s rally.  However, further consideration led traders to wonder why anyone would buy this much US soybeans when Brazilian product is so cheap some US traders are thinking of importing it.\r\n   If shipped, ending stocks would fall to 72 million bushels, below what is considered “pipeline supplies,” said, quoting Anne Frick, broker at Jefferies Bache.\r\n   Traders now think the sale will be rolled into new crop soybeans and many lean toward counting it as such already or assume it will be cancelled.\r\n   And Chinese crush margins are deeply in the red, discouraging further soybean purchases at a time when millions of bushels are already on the way to Chinese ports.\r\n   Meanwhile, corn and wheat markets are softening as pressure on the Ukrainian currency, the Hryvnia, takes it to record lows against the US Dollar, making Ukrainian exports much cheaper than they were just a week ago.  The Hryvnia has been declining all year but accelerated the pace after former President Viktor Yanukovych was ousted over the weekend.\r\n   Currency traders expect the country will have to devalue its currency significantly to secure much-needed financial assistance, Dow Jones Newswires reported.\r\n   Grain and soybean support is coming from weather concerns in Brazil.  After a near-perfect growing season, areas of dryness contrasted with other areas of flooding are working to reduce production expectations.  \r\n   And weekend flooding hamstrung Brazil’s main highway to the ports, washing out all but one lane of highway BR-163, according to  This bottleneck threatens to slow export shipments.\r\n   Bitter cold is forecast for the central US for the next week to 10 days as the fifth polar vortex of the winter descends out of Canada.  Moderation is not expected until mid-March.\r\n   The event will not be as severe as previous systems, but more cold and snow will dampen the economy, threaten the winter wheat and possibly delay early corn planting in southern states.  The snow that accompanies the cold could protect the wheat if it’s deep enough, but coverage may not reach parts of the Hard Red Winter crop in the Plains.\r\n   No cash cattle sales were reported Monday.  Packer bidding has been light so far this week with a few token bids at $144 per cwt on a live basis in Kansas, steady with the low end of cash action last week.\r\n   However, cattle owners rebuffed those bids and are asking $147 or more live and $236 on a dressed basis for their slaughter-ready supplies.  \r\n   Cash cattle traded last week at $144 to $145 per cwt in the southern Plains and up to $148 in the Northern Plains, all up from $142 the previous week.\r\n   Market analysts are calling for steady to slightly higher cattle prices this week since beef markets appear to be holding their own.  Despite the latest polar vortex, spring is coming, and with it the promise of more back yard grilling.  This usually means more beef sales.\r\n   However, the transition from winter’s favorites of roast and ground beef to more steaks and ground beef in the spring and early summer is slow.  The next meat-related observance is St. Patrick’s Day, with its emphasis on corned beef, but it’s not as big of a deal as the meats associated with other holidays.\r\n   The USDA reported higher beef cutout values Tuesday, with choice boxed-beef at $216.50 per cwt, up $0.68, while select product was up $1.31 at $213.98. The choice/select spread narrowed to $2.52, but there were only 90 fabricated loads sold into the spot market.\r\n   The CME Feeder Cattle Index for the seven days ended Monday is $170.32 per cwt, down $0.25. The March Feeder Cattle futures contract settled Tuesday at $171.07, up $0.87.\r\n