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The Cattle Range Weekly Market Summary provides market data for the informed cattleman. Current industry news & commentary as well as a comprehensive comparison of the past week's prices from around the country in comparison to the previous week, month, 6 months ago, 1 year ago, & 5 year average.  The data is compiled from a variety of sources and is organized to provide insight in determining market movement and trends.
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The "Nord Fork"

Replaces Flankers at Branding

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SAMPLE... Market Summary for the week ending January 30th:
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  • Bullish: CME Cattle Futures managed to close higher for the week after being pummeled for over a month.
  • Bearish: The U.S. dollar has appreciated over 15% against other currencies in recent months, making U.S. beef more expensive for export and imported beef less expensive.
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The Cattle Range 10-Day Market Trend:
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An indicator of overall cattle/beef market strength. The angle indicates direction & velocity of the trend.
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The Trendline is based on daily market factors for the last 10 days.
Each daily factor is the aggregate weighted total of the Gain/(Loss) for 10 major market indicators compared to the previous trading day.
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National Feeder & Stocker Cattle Weekly Summary:
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RECEIPTS:    Auctions   Direct    Video/Internet  Total
This Week     216,900     22,500         5,600          245,000
Last Week     302,500     29,700        75,100         407,300
Last Year       253,000     47,900        51,400         352,300
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Compared to last week, the downtrend again continued this week with last Friday’s sales and early week sales this week catching the full brunt of price declines as Cattle futures last Friday were limit lower and sharply lower on Monday to start the week.  Early week sales were 10.00-20.00 lower with several sales 25.00-30.00 lower.  The Board showed some footing on Tuesday with sharp gains and some light follow through buying on Wednesday made cattle feeders feel a little better for a change as prices from mid-week on were mostly uneven, trading 5.00-10.00 lower in most cases. 

The most decline this week was on calves weighing 450-650 lbs with the 5 weight steers feeling the full decline.  Cattle buyers showed some caution this week on calves that will go to grass as they try to fill their needs early enough to get their stockers assembled and straightened out before offerings tail off.  Bearish signals continue to lead the way in the cattle markets as pressure comes from several factors: the CME Board remains very volatile searching for direction after the enormous sell-off in December and January; declining boxed-beef prices; a steadily rising U.S. dollar that is at a near 11 year high.  All when added together can become troublesome on the market. 

The Stock Market has also had a rough time this week as stocks tumbled on weak data and disappointing earnings of Blue-Chip companies this week.  With the dollar at an 11 year high, exporters are hurt as their goods become more expensive on the global landscape.  It also eats into the profits of companies that see a significant amount of their sales abroad.  Two weeks ago, boxed-beef prices hit an all-time high at 263.81 on Choice product and it seems this was all but ignored.  Since then Choice product has fell over 21.00, closing on Friday at 242.44. 

The bearishness of the feeder and fed cattle markets have also spilled over into the slaughter cow market.  This market is seeing steep declines of 10.00-20.00 lower over the last several weeks.  This past fall saw droves of feeding cows being bought with competition from ranchers/feeders looking to either harvest another calf from the old girl or put some cheap weight on her.  With much cheaper feed and a good outlook made feeding cow outlook attractive.  Three months later and markets are lower with supplies of these cows coming back to the auctions especially in the Northern plains with packers bidding substantially lower.   The feeder cattle prices seen over the last couple of weeks may be more realistic than the record prices we saw last year. 

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Stocker Steers:
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Feeder Steers:
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Five Year Moving Average - Stocker Steers, Feeder Steers, & Slaughter Steers:
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Cattle Futures: Total red meat production under Federal inspection for the week ending Saturday, January 31, 2015 was estimated at 952.7 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 2.5 percent lower than a week ago and 3.8 percent higher than a year ago.  Cumulative meat production for the year to date was 4.4 percent lower compared to the previous year.
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Selected Auction Reports:
"Click" on individual auction links for complete report
Oklahoma National Stockyards - Oklahoma City OK
Actual Receipts: 7968     Last Monday: 12,522     Year Ago Monday: 8,406
Compared to last week:  Feeder steers and heifers traded 10.00 to 15.00 lower.  Steer and heifer calves mostly weak on a light test.  The CME Feeder and Live Cattle contracts fell hard again last week, which has once again expanded the limits to 6.75 on Feeders and 4.50 on Live Cattle.  This along with fat cattle selling mostly 5.00 lower in the country last week has put downward pressure on today's market.

El Reno Cattle Narrative - El Reno OK
Receipts:  5796    Last Week:  8782    Year Ago:  4236
Compared to last week:  Feeder steers traded 1.00 to 3.00 lower.   Feeder heifers 2.00 to 4.00 lower.  Steer and heifer calves sold with weak undertone  on limited comparable offerings.

Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts:  5587    Week Ago:  11762    Year Ago:  9135
Compared to last week, feeder steers 10.00 to 25.00 lower and feeder heifers 5.00 to 15.00 lower.

Tulia Livestock Auction - Tulia TX
Receipts:  2262    Two Weeks Ago:  1748    Year Ago:  1536
Compared to two weeks ago:  Feeder steers and heifers sold 5.00-10.00 lower.  Slaughter cows and bulls not well tested.

Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 1357       Week ago: 963           Year Ago: 1566
Compared to week ago:  Feeder steers and heifers under 400 lbs not well tested; 400-600 lbs 8.00-10.00 higher and over 600 lbs 2.00-4.00 higher.  Slaughter cows and bulls steady.

Denison Wtd Avg Feeder Cattle Auction - Denison IA
Receipts:  2677    Last Week:  2422
Compared to last weeks Precondition sale, Steers 500 to 650 lbs were 13 lower, 650 to 700 lbs were steady and 700 to 900 lbs were 10 lower. Heifers 550 to 700 lbs were 11 lower and 700 to 900 lbs were 4 lower.

Tri-State Livestock Auction Market - McCook NE
Receipts:  2100    Last Week:  2600    Year Ago:  2200
Compared to last week, steers and heifers were 9.00 – 19.00 lower.

Huss Platte Valley Auction - Kearney NE
Cattle Receipts:  4680     Last week:  5420     Last year:  4500
Compared to last week, steers and heifers sold unevenly steady to 2.00 higher. An average size crowd of buyers bid readily from start to finish for Wednesday’s supply of longtime weaned calves and feeders.

Clovis Livestock Auction - Clovis NM
Receipts:  1384                Week Ago: 3638            Year Ago: 1656
Compared to last week:  No accurate comparison on steers under 450 lbs.  450-600 lbs 6.00-10.00 higher, over 600 lbs 1.00-2.00 lower.  Heifers under 600 lbs 2.00 higher, over 600 lbs 1.00 lower on limited comparable sales.  Slaughter cows and bulls steady to strong on limited comparable sales.

Toppenish, WA Livestock Auction - Toppenish WA
Receipts:  1550    Last Week:  1100    Year Ago:  1100
Compared to last Thursday at the same market, stocker and feeder cattle steady to weak in a light test. Trade slow with light demand. Slaughter cows steady to 2.00 higher with most advance on lean type Holsteins. Slaughter bulls steady.

Farmers & Ranchers Livestock Commission Co. - Salina KS
Receipts:  4370    Last Week:  4550    Year Ago:  4736
Compared to last week: Steers 700-1000 lbs 2.00-7.00 lower, 700 lbs and under 2.00-4.00 lower in a limited supply. Heifers 400-800 2.00-6.00 lower.

Sioux Falls Regional Livestock wtd Avg Report - Worthing SD
Receipts:  4347    Last Week:  5793    Year Ago:  3697
Compared to last week:  Steers 400-500 lbs sharply lower, 500-600 lbs 15.00 to 20.00 lower with instances to 30.00 lower, 600-900 lbs 5.00 to 10.00 lower with the exception of 650-700 lbs 1.00 to 3.00 lower, over 900 lbs very lightly tested.  Heifers 500-600 lbs 15.00 to 20.00 lower with instances to 25.00 lower, 600-650 and 700-750 lbs5.00 to 10.00 lower, 650-700 lbs sharply lower, over 750 lbs had no comparable sales lower undertone noted.
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Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts:  4943    Last Week:  4517    Year Ago:  6116
Compared to last week:  Steers 500-550 lbs steady, 550-650 lbs10.00 lower, 650-700 lbs steady, 700-800 lbs 7.00 to 12.00 lower,800-900 lbs 5.00 to 10.00 lower, 900-950 lbs 4.00 to 5.00 lower,over 950 lbs had no comparable sales.  Heifers under 550 lbs lightlytested, 550-600 lbs 5.00 to 10.00 lower, 600-700 lbs 3.00 to 4.00lower, 700-750 lbs 3.00 to 7.00 lower, 750-800 lbs unevenly steady.

Weekly Auction Summaries:
Kentucky Weekly Livestock Summary
Receipts  This Week 26,791    Last Week 23,630     Last Year 22,435
Compared to last week, Steer Calves below 500 lbs sold mostly steady with instances to 5.00 higher and good demand, above 500 lbs mostly steady to 4.00 lower with moderate demand. Heifer Calves below 500 lbs sold mostly steady with good demand, above 500 lbs 2.00 to 4.00 lower with moderate demand.  Yearling steers were 2.00 to 4.00 lower with moderate demand and Yearling Heifers 10.00 lower with a limited comparison available.Slaughter Cows sold steady to 3.00 lower with moderate demand and Slaughter Bulls steady to 2.00 lower with moderate demand.

Tennessee Weekly Auction Summary
Receipts on 12 TN Auctions 4,755 12 Last Week 9,500 10 Last Year 6,500
Trends:  According to the Federal-State Market News Service, comparedto the same sales one week ago, slaughter cows 4.00 to 5.00 lower.Slaughter bulls 3.00 to 4.00 lower. Steers/bulls 5.00 to 12.00 lower.Heifers 1.00 to 7.00 lower.

Mississippi Weekly Livestock Summary
Cattle Receipts:    4,096       Last Week:      6,498       Last Year:    4,207
Compared to last week, slaughter cows sold 1.00 to 3.00 lower  and bulls sold steady. Feeder steers sold 5.00 to 10.00 lower and heifers sold 5.00 lower.

Alabama Auctions Weekly Summary
Total estimated receipts this week 7,700, last week 12,927 and 7,981 last year.
Compared to one week ago: Slaughter cows and bulls sold mostly 3.00 to 4.00 lower. Replacement cows and pairs sold mostly steady. All feeder classes sold 7.00 to 14.00 lower.

Georgia Cattle Auctions Weekly Review
Cattle receipts at 25 markets 7,058 compared to 11,001 last week and 6,187 year ago
Compared to one week earlier, slaughter cows 2.00 to 3.00 lower, bulls steady to 1.00 lower, feeder steers steady to 3.00 lower,bulls 2.00 to 4.00 lower, heifers 2.00 to 4.00 lower, steer calves 2.00 to5.00 lower, bull calves 3.00 to 7.00 lower, heifer calves 3.00 to 6.00 lower,replacement cows steady to 3.00 higher.

Colorado Auction Feeder Cattle Summary
Receipts:  1,164     Last Week:  4,237     Last Year:  2,792
Compared to last week: Not enough comparable sales on feeder steers or heifers for an adequate market trend.

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Representative Sales of Cow & Pairs:
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  • Ericson, NE
    • Bred Cows:  Medium and Large 1 Heifers AI Bred calve February 1000-1140 lbs 2510.00-2925.00; Bull Bred calve in March 1070-1160 lbs 2425.00-2600.00.  Medium and Large 1-2 AI Bred: 950-1000 lbs 2275.00-2500.00; Bull Bred 960-1050 lbs 2410.00-2535.00. 
    • Cows:  Medium and Large 1 3 yrs 1200 lbs 3200.00; Solid Mouth 1460-1630 lbs 2325.00-2475.00; Aged 1390-1500 lbs 1835.00-1900.00.   Medium and Large 1-2 1240-1450 lbs 1675.00-1920.00; Aged 1185-1415 lbs 1450.00-1660.00.
  • Torrington, WY
    • Bred Cows:  Medium and Large 1 Heifers 900-1225 lbs 2500.00-2900.00, Lot 880 lbs 2275.00; Young 1050-1375 lbs 2800.00-3175.00; Middle Aged Solid Mouth 1250-1550 lbs 2700.00-3070.00, Few 2475.00-2625.00; Aged Short Solid 1475-1625 lbs 2325.00-2560.00; Aged Short Term 1150-1475 lbs 1900.00-2200.00.
  • Riverton, WY
    • Bred Cows:  Medium and Large 1-2 Young 850-1150 lbs 2000.00-2500.00; few 1600.00-1975.00, few (late) 755-975 lbs 1200.00-1550.00; Young 925-1540 lbs 2000.00-2900.00, several 1700.00-1925.00, few 1400.00-1550.00; Middle Aged (Short Solids) pkg 1585 lbs Reputation Quality 2300.00, several 1260-1560 lbs 1500.00-2050.00; Aged (Short Term)  Reputation 1650 lbs 2100.00, several 1500-1850.00, few 1300.00-1450.00. 
    • Pairs: Medium-Large 1 Young few 825-1225 lbs w/75-200 lb calves 1900.00-2075.00. 
  • Miles City, MT
    • Bred Cows:  Medium and Large 1-2 Heifers Mar-May 925-1065 lbs 2400.00-2500.00, pkg 2325.00; 20 day May calving 2100.00; June 1st 1875.00. 
    • Bred Cows:  Medium and Large 1-2  Young (3-4 year olds) 1046-1172 lbs for March-May calving 2600.00-2825.00, red angus pkg 2400.00; Average quality 2025.00-2100.00; 5-6 yrs March-May calving 1172-1435 lbs 2600.00-2775.00, May-June 1825.00; Middle Aged (solid mouth) for March-May calving 1383-1438 lbs 2025.00-2385.00, Red Angus pkg 2500.00; Non Legible tattoos 2000.00; Average quality 1800.00; Aged (broken mouth) for March-May calving 1297-1495 lbs 1650.00-1775.00; Non legible tattoos 1585.00-1610.00, average quality 1450.00-1585.00.
  • Woodward, OK
    • Bred Cows:  Medium and Large 1-2 Heifers 1000 lbs 6-8 months 2500.00; 3-6 yrs 1150-1300 lbs 6-8 months 2375.00-2400.00; 7-10 yrs 1150-1325 lbs 6-7 months 1500.00-1800.00. 
    • Pairs:  Medium and Large 1-2  2-3 yrs 950-1200 lbs w/200-350 lb calves 2800.00-3200.00; 4-6 yrs 1200 lbs w/100 lb calves 2900.00; 5-9 yrs 1225-1300 lbs w/100-275 lb calves 2400.00-2675.00. 
  • Oklahoma City, OK
    • Bred Cows:  Medium and Large 1-2  2-6 yrs 1100-1325 lbs 5-7 months 2000.00-2550.00.  Medium and large 2  2-4 yrs 1050-1150 lbs 2-6 months 1550.00-1800.00; 7-10 yrs 1000-1350 lbs 3-7 months 1260.00-1800.00. 
  • Joplin, MO
    • Bred Cows:  Medium and Large 1-2  3 yrs to short solid 1100-1350 lbs 2nd-3rd stage 1800.00-2300.00, few blks 3rd stage 2625.00-2675.00, 1st stage 1090-1375 lbs 1400.00-1750.00; short solid mouth to aged 2nd and 3rd stage 1100-1315 lbs 1315.00-1500.00.  Large 1-2  5 yrs to broken mouth 2nd and 3rd stage 1360-1620 lbs 1590.00-1780.00. 
    • Pairs:  Medium Large 1-2  2-5 yrs 1060-1285 lbs w/baby to 285 lb calves 2500.00-2900.00. 
  • West Plains, MO
    • Bred Cows:  Medium and large 1-2  2-6 yrs 1000-1600 lbs 2nd-3rd stage 1950.00-2500.00; 7 yrs to short-solid 1125-1525 lbs 3rd stage 1800.00-2100.00.  Medium and Large 2  2-7 yrs 855-1495 lbs 1st to 3rd stage 1600.00-1975.00; Short-solid to broken mouth 985-1525 lbs 1st to 3rd stage 1350.00-1800.00.  Medium 1-2  Short-solid to broken mouth 755-1040 lbs 1st to 2nd stage 750.00-1100.00. 
    • Pairs:  Medium and Large 1-2  2 yr to short-solid mouth 798-1300 w/100-300 lb calves 2200.00-2450.00, two pairs 3 yrs 760 lbs w/200 lb calves 2600.00.  Medium and Large 2  2 yrs to broken mouth 725-1205 lbs w/75-200 lb calves 1600.00-2000.00. 
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Bred Cows & Heifers in 2nd & 3rd Stages of Pregnancy:
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Prices are from USDA market reports which seldom reference breed or quality.
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Canadian Cattle:
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Alberta Beef Producers:  Alberta direct cattle sales so far this week have seen light trade develop with dressed sales steady with the previous week. US packer interest has been noted but no sales have been confirmed. Depending on dressing percent and feedlot location bids from south of the boarder are working back in the low to mid 180's/cwt which is comparable with local sales. Cash to futures basis levels did weaken this week, for the most part showlist volumes have been cleaned up.
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Canadian Cattle Prices:
Prices have been converted to U.S. $/CWT.  Grades changed to approximate U.S. equivalents
Exchange Rate: Canadian dollar equivalent to $0.7966 U.S. dollars
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Prices for the week ending January 23rd:
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January 30th USDA Cattle Inventory Report - January 1 Cattle Inventory Up 1 Percent:
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All cattle and calves in the United States as of January 1, 2015 totaled 89.8 million head, 1 percent above the 88.5 million on January 1, 2014.

All cows and heifers that have calved, at 39.0 million, were up 2 percent from the 38.3 million on January 1, 2014.

  • Beef cows, at 29.7 million, were up 2 percent from January 1, 2014.
  • Milk cows, at 9.3 million, were up 1 percent from January 1, 2014.
Other class estimates on January 1, 2015 and the change from January 1, 2014, are as follows:
  • All heifers 500 pounds and over, 19.2 million, up 1 percent.
  • Beef replacement heifers, 5.8 million, up 4 percent.
  • Milk replacement heifers, 4.6 million, up 1 percent.
  • Other heifers, 8.8 million, down slightly.
  • Steers weighing 500 pounds and over, 15.8 million, up 1 percent.
  • Bulls weighing 500 pounds and over, 2.1 million, up 3 percent.
  • Calves under 500 pounds, 13.7 million, up 1 percent.
  • Cattle and calves on feed for slaughter in all feedlots, 13.1 million, up 1 percent.
  • The combined total of calves under 500 pounds, and other heifers and steers over 500 pounds outside of feedlots was 25.2 million, up 1 percent.
Calf Crop Up 1 Percent
  • The 2014 calf crop was estimated at 33.9 million head, up 1 percent from 2013. 

  • Calves born during the first half of 2014 were estimated at 24.6 million, up slightly from 2013.
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Positive Weekly Close in Feb LC on Tap:
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Very volatile market action has become commonplace in live cattle futures. Nerves remain raw and traders unsettled by the enormous sell offs in December and January. Lately, each time cattle futures sell-off traders wonder “is it here we go again?”

Which makes the fact that Feb LC is posting a huge outside week and will close higher than last week’s settlement of $150.35 mildly remarkable. The way the week unfolded was positive too, a Monday low made during a capitulation panic. A nerve-wracking brief sell-off Wednesday that saw a respectable recovery.

This week’s positive action has been accompanied by a stabilization in the decline in OI and positive turn up in stochastics. In fact there’s a rather pretty potential bottom on the daily Feb LC chart that a close above $155.47 will project a rally north of $160. Though many still call a visit to the 50-day moving average of $161.95 before expiration unlikely if not impossible. While on the topic of positives, Feb/Apr keeps chugging and has made another new high at +327.

Cash Trade Mostly Steady

Cash cattle trade got underway yesterday at mostly steady money, also mildly remarkable considering it was a lock cash would be lower on Monday and that packers have mega-contracts scheduled to slaughter next week. Packers still seem to need inventory, which could make next week’s buy much more interesting than this week. Carcass weights are dropping rapidly, as reported by the USDA yesterday, trimming beef production.

New Bearish News?

But just as the tide feels as if it could be turning, bearish talk is renewed as some packers busily share plans to cut next week’s kill. Typically beef packer margins are lousy in February and its true since cash ended up steady this week that margins have eroded thanks to slipping boxed beef values this week. Also true, available supplies of market ready fed cattle, not already spoken for, are quite tight. Cattle continued to get hauled hundreds of extra miles to fill in gaps.

Another Year, Another Wall of Worry

Cattle futures will probably trade significantly discount in 2015. No one will soon forget the punishing breaks or the growing belief that +$170 was it and a major top has been made. But with the open interest flush behind us and a boatload of bearish news in the market, the cash market must decline enough to justify prices well below where cash prices averaged in 2014, $154.42. Thus far, cash prices haven’t even been able to test the low reached in December.

The Beef

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Photo of the Week:
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  • Red Angus Bred Heifers... Southwest MO*
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    The Futures and the Market Theories:
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    There has been a general and hostile reaction to the crash in the cattle markets, led by futures, but certainly followed by cash markets in fed and replacement cattle.  Whether sourced from hedgers who have been unable or unwilling to protect positions or open operators, the complaint has been a errant futures market that has come uncoupled from market fundamentals. 

    In an open letter to commodity and fund managers, one commentator pleaded for reconsideration of an investment opportunity. The commentator insists that no rational humans think that fed cattle can fall as low as the low $140s this summer except for fund managers. He asks them to look at market fundamentals and stop selling and start buying if they are looking to profit.

    Other operators in the live cattle sector are pointing to the packers with charges of market manipulation by paying super high prices early this year as a way of tricking futures buyers into longs positions then shorting thousands of contracts in order to drive the market down.

    During the past year there were certainly times when futures doubted the sustainability and price level of fed cattle and doubters shorted the markets and suffered the consequences as the fundamentals drove prices higher. The evidence for waning support for fed prices this time is present and material. A runaway dollar is making exports more expensive and imports of beef cheaper. A west coast docks strike has interrupted export flows of beef and resulted in loss of some export sales. And finally, rising supplies of pork and poultry will challenge beef on the grocer's meat counter.

    That is not to say the sell off in cattle futures is not overdone. Time will tell. Emotion and exuberance is well known to take markets past reasonable pricing. It is to say that the price movements are not without reason. Competition in the meat sector in general and the beef sector in particular is unlikely to continue at the lofty price levels of the past year.  The quantitative easing occurring on the global front led by the EU, and joined by Canada, Japan and others, will impair our commodity markets as the dollar value thrives amid deterioration in the other currencies.

    Ag Center Cattle Report

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    Shootin' the Bull:
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    In my opinion, futures are anticipated to continue to climb a wall of worry.  It is perceived that the change in sentiment is coming with prices at the low end of the most recent decline.  The decline was anticipated, it materialized, and now I anticipate the formation of a sideways trading range that is anticipated to be within the wide range established between contract high and this weeks low per respective contract month.  I anticipate that the days trading ranges will begin to narrow some as the adrenalin caused by the high volatility begins to subside. The anticipation of a wide trading range suggests that there could be multiple moves up and down within the range.  Therefore, cattle marketed this spring are anticipated to vary greatly in sale prices.  I urge producers to put pencil to paper and attempt to narrow the time frame for which you will be marketing this spring.  If this can be narrowed to within a couple of weeks, it may help in being a deciding factor whether to use futures or options to hedge, or remain open until the sale. 

    I have looked at the inventory report.  Whether you agree, disagree, or are indifferent, the USDA perceives that expansion has begun.  While this is not anticipated to be a factor for much of this year, it is anticipated to be in 2016.  Therefore, one may want to be overly cautious on what price one pays for replacement cattle this spring or summer and potentially use hedging practices with significant time to potentially offset a perception of an increase in inventory.  With this inventory number, comes the aspects that a 5 year bull market in feeders has been completed.  If so, then we have already seen what is anticipated to the first of many more down markets to come.  As I stated above, at present, a sideways trading pattern is anticipated to unfold.  This is perceived a correction of the initial decline.  Therefore, it will be perceived crucial to use any gains made in the anticipated formation of the sideways pattern to lock in future sales of inventory. 

    December corn traded below $4.00 today but could not close below it.  This is not necessarily a signal to buy, but I do not anticipate corn to get much cheaper going into the planting season.  So, as corn remains soft, one may consider wanting to buy December corn in anticipation of anything that can go wrong in planting. 

    Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com

    An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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    Margin between the Choice Boxed Beef Cutout & Feeder Steers:
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    5 Year Average: $ 44.35-- This Week: $39.57
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    Out of Kilter:
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    A good way to determine if something is, “going on” in a market is by noticing when market relationships are out of kilter. Cattle and grains typically have a positive correlation. They tend to move in tandem. Moderately increase the price of corn and the cattle will follow suit. The opposite is also true as the cost of feed declines, so does the cost of production. However, when this relationship breaks down, its because one market can't keep pace or pass on the costs of the other. 

    That is what occurred in the spring of 2012 with cattle and corn. The price of feed exceeded the livestock market's ability to pass on the costs.  Over the 2013 summer months, the gap was erased and corn went "Out of Kilter" last fall.  A correction started in January but ran out of steam in view of surging cattle prices and plummeting corn prices.

    Normally, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers.

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    5 Year Moving Average:
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    Crude/Cattle Correlation:
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    The chart below shows a fairly consistent correlation between the price for a barrel of crude oil and the per cwt. price for slaughter cattle.  Since it is unlikely the price of cattle affects the price of oil on the world market, it might be assumed the price of crude oil affects the price of cattle, but that is unlikely as well.  It is more likely that economic factors affecting demand for crude oil have a similar effect on demand for beef.

    Accordingly, in the absence of geo/political events disrupting or distorting oil supply, since price trends occur slightly sooner in the crude oil market, crude oil has been a good indicator of the direction of near term cattle prices. However, with increased supplies of crude oil and decreased supplies of slaughter cattle, an "Out of Kilter" situation between the two commodities has developed.

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    5 Year Moving Average:
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    Restaurant Burgers Had A Banner Year in 2014:
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    Higher beef prices incent casual dining restaurants to add more burgers and consumers to choose burgers over beef entrees

    Against tough competition from other sandwiches and flat to declining restaurant traffic, burgers ordered at U.S. restaurants and foodservice outlets had a banner year in 2014, finds foodservice market research from The NPD Group, a leading global information company. There were 9 billion servings of burgers ordered at U.S. restaurants and foodservice outlets last year, an increase of 3 percent compared to prior year, according to NPD’s ongoing foodservice market research.

    Corresponding with the servings ordered at restaurants are ground beef shipments from foodservice distributors to restaurants and other foodservice outlets. Bulk ground beef unit shipments to total foodservice outlets increased by 2 percent, reports NPD’s SupplyTrack®, a monthly service that tracks every product shipped from major broadline distributors to foodservice operators. Bulk ground beef case shipments to quick service restaurants increased by 3 percent, by 4 percent to quick service hamburger restaurants, which drive 70% of bulk ground beef sales, and 1 percent to full service restaurants.

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    Slaughter Cows & Bulls:
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    Slaughter cows steady to firm in the West and 2.00-4.00 lower in the Southeast. Slaughter bulls steady in the West and 5.00 lower in the Southeast. 

    USDA's Cutter cow carcass cut-out value Friday afternoon was 238.59 -- Down .29 from last Friday.

                   %Lean    Weight        Colorado        Oklahoma         Alabama 
    Breakers  75-80%   1100-1600     102.00          102.00-108.00  108.00-112.00
    Boners     80-85%   1000-1450  102.00-108.00  103.00-110.00  110.00-115.00
    Lean        85-90%   1000-1300  101.00-105.00   96.00-103.00   98.00-102.00
    Bulls        88-92%   1300-2500  134.00-138.00  128.50-136.00  125.00-130.00

                         Confirmed  Week Ago Year Ago   Week to Date    Week Ago    Year Ago
    NATIONAL          6,617     7,315        6,397         38,457              38,195         32,460
    S CENTRAL       1,847     1,827         1,636          9,184                9,177           7,864
    N CENTRAL          669       713            686          3,366                3,056           2,913
    EAST                1,511     1,999         1,494          9,924                9,840           8,073
    WEST               1,727     1,597         1,527          9,725                9,688           7,952
    MIDWEST            863     1,179         1,054          6,258                6,434           5,658


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    Weekly Hay Reports:"Click" on links for detailed report
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    Weekly Feedstuffs Market Review:
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    The USDA Market News Service reports feed ingredient prices for the week ending January 27, were mixed but mostly lower compared to last Tuesday. 
    • Soybean Meal was mixed 12.30 lower to 12.70 higher, mostly 5.10 to 10.10 higher.  Cottonseed Meal was 5.00 lower to 5.00 higher, mostly steady.  Canola Meal was mixed 50.00 lower to 10.10 higher, mostly 5.00 lower to 10.10 higher.  Linseed Meal was steady.  Sunflower Meal was steady. 
    • Whole Cottonseed was mixed 3.00 lower to 5.00 higher. 
    • Crude Soybean Oil was 167 to 192 points lower.  Crude Corn Oil was steady. 
    • Ruminant Meat and Bone Meal was steady to 36.00 lower, mostly 5.00 to 20.00 lower.  Ruminant Blood Meal was 100.00 to 235.00 lower.  Feather Meal was steady to 25.00 lower. Menhaden Fishmeal was steady to 10.00 lower. 
    • Corn Hominy was steady to 2.00 higher. Corn Gluten Feed was mixed 20.00 lower to 10.00 higher, mostly 3.00 to 20.00 lower. Corn Gluten Meal was mixed, 40.00 lower to 35.00 higher. 
    • Distillers Dried Grains were mixed 12.00 lower to 20.00 higher, mostly steady to 15.00 higher. 
    • Wheat middlings were steady to 30.00 higher.  Wheat millrun offers were steady to 15.00 lower.

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    Est. Weekly Meat Production Under Federal Inspection:
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    Total red meat production under Federal inspection for the week ending Saturday, January 31, 2015 was estimated at 952.7 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 2.5 percent lower than a week ago and 3.8 percent higher than a year ago.  Cumulative meat production for the year to date was 4.4 percent lower compared to the previous year.
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    Bullish/Bearish Consensus:
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    The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
    • They get too bullish after prices have risen, and too bearish after they have already fallen.
    Because of this tendency, there are often extremes in opinion right before major changes in trend:
    • When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead. 
    • And when they become too bearish, then prices tend to rise.
    So when Public Opinion moves above the red dotted line in the chart, it means that compared to other readings over the past year, you're seeing excessive optimism.  You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion.  Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.

    Conversely, when Public Opinion moves below the green dotted line, then the public is excessively pessimistic about the commodity's prospects for further gains compared to their opinion over the past year.  Looking for absolute readings under 20% (or especially 10%) often indicates an upturn in the market.

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    Bullish/Bearish Consensus - Cattle
    Last Updated: January 27th
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    Bullish/Bearish Consensus - Corn
    Last Updated: January 27th
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    Economic News:
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    Stocks skid on earnings concerns: Stocks fell for the week, dragged lower by earnings reports and a renewed decline in oil prices. Markets experienced sharp selling pressure as trading began Tuesday morning, and sentiment remained poor throughout much of the rest of the week. The technology-heavy Nasdaq Composite Index outperformed the large-cap Standard & Poor's 500 Index, helped, in part, by the strong performance of Apple. The smaller-cap indexes held up better than large-cap blue chip stocks. Small-caps typically have less reliance on export markets, which are growing slowly and have become more challenging for U.S. firms because of the strong dollar.

    U.S. multinationals are facing challenges of strong dollar: The challenges facing U.S. multinationals, particularly those tied to the global economic cycle, played a large role in Tuesday's sell-off. Equipment giant Caterpillar led the Dow Jones Industrial Average lower after offering a disappointing outlook for 2015. The company cited the declining price of oil and other commodities, such as copper and iron ore, which is reducing demand for mining and other production equipment. Industrials analysts expect revenues in the sector to face continued pressure in the coming months, but they believe that lower prices for oil and other commodities will eventually boost consumer spending and provide a tailwind for industrials stocks.

    Several signs indicate the U.S. consumer is growing healthier: Indeed, investors received several pieces of good news about the U.S. consumer during the week, which may have moderated the market's decline. The University of Michigan and Thomson Reuters confirmed their earlier estimates that consumer sentiment had reached its highest level in 11 years, thanks in part to falling gasoline prices. The Commerce Department reported that consumer spending had expanded at a solid annualized pace of 4.3% in the final quarter of last year, although its first estimate of fourth-quarter gross domestic product was 2.6%, significantly less than the 5.0% annual growth in the third quarter.

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    • The U.S. economy grew by a 2.6% annual pace in the fourth quarter, slowing from a 5.0% pace in the third quarter, according to a preliminary government estimate released by the Commerce Department Friday. Consumer spending, which is a main source of economic activity, rose 4.3% following a 3.2% rise in the third quarter. This is the biggest gain since the first quarter of 2006. But growth slowed because of slower business and government spending and higher imports. The PCE index, the Fed's preferred inflation gauge, fell at a 0.5% annual rate in the October-to-December period, compared to a 1.2% gain in the third quarter. That's the biggest drop since the first quarter of 2009.The core PCE that excludes food and energy, rose at a 1.1% clip, down from 1.4%.
    • Orders for durable U.S. goods plunged 3.4% in December, the fourth decline in the past five months, the Commerce Department said Tuesday. The decline was well below expectations. Economists had expected durable-goods orders to rise 0.1%. Adding to the sense of weakness, durable-goods orders for November were revised to show a 2.1% decline instead of a drop of 0.9%. Transportation led the decline in December, dropping 9.2%. Orders for core capital goods - a measure of business investment - fell 0.6% in December for the second straight month. Shipments of core capital goods, a category used to calculate quarterly economic growth, slipped 0.2% in December.
    • U.S. house prices edged back by 0.2% in November, to lower the year-on-year advance to 4.3%, according to the S&P/Case-Shiller 20-city composite released Tuesday. On a seasonally adjusted basis, home prices advanced 0.7%, the report said. Pending home sales cooled in December, which the National Association of Realtors attributed to fewer homes available for sale and a slight rise in prices. The pending home sales index fell 3.7% during December, though the year-on-year gain was 11.7%, the highest since June 2013.
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    "Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
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    Looking Ahead:
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    • Over the next 5-7 days, temperatures are expected to be below normal for most areas east of the continental divide. The greatest departures are projected to be over the upper Midwest and Great Lakes regions while temperatures are expected to stay above normal over the western United States. Models are in fairly strong agreement on a strong storm system developing over the southwest and ejecting onto the plains. This system does pull some Pacific moisture into it, bringing a good chance of precipitation over Arizona, New Mexico and the desert regions of southern California. As this system tracks to the east, much of the southern plains, lower Mississippi River valley, and Mid-Atlantic are expecting to see precipitation of up to 1.50 inches.
    • The 6-10 day outlook continues to show that the western third of the United States has the highest probabilities of above-normal temperatures. After being above normal during the last few weeks, the eastern half of the country looks to get back into a more seasonal pattern, with the best chances of below-normal temperatures over New England. The drought in the west will not see much relief through the first week of February as the area remains likely to have below-normal precipitation. There are also above-normal chances of below-normal precipitation through much of the plains, Midwest, Gulf Coast and Ohio River valley, while portions of the central and northern Rocky Mountains and the southeast look to have the best chances of receiving above-normal precipitation.
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    Beef Packers Block Plan To Revive Growth-Promoting Drug:
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    For more than a year, a once-popular drug that makes cattle put on weight faster has been stuck in a kind of veterinary purgatory.

    As far as the Food and Drug Administration is concerned, the drug, Zilmax, is legal to use. But large meat packers, which dominate the industry, have ostracized it after the drug was accused of making animals suffer. The drug's manufacturer, Merck, has been working on a plan to rehabilitate it. But that effort has stalled.

    Merck suspended sales of Zilmax in August 2013, after Tyson, a leading beef processor, announced that it would no longer buy cattle that had been treated with Zilmax, and other cattle buyers followed Tyson's lead. Tyson's move followed reports that Zilmax-treated cattle were more likely to suffer from what some researchers call "cattle fatigue syndrome." At an industry conference, an animal welfare expert from the meat packer JBS showed a video of Zilmax-treated cattle that appeared immobile, unable to move properly.

    Merck responded with a "five-step plan" to examine the safety of Zilmax. Last November, it unveiled new procedures for using the drug, including guidelines and training that are intended to prevent overdosing cattle with the drug.

    But the centerpiece of Merck's plan, a large "field evaluation" of Zilmax, remains in limbo. This study was supposed to include up to 240,000 cattle, at a variety of commercial feedlots. Merck recruited a university researcher to carry it out, and it was supposed to begin last year.

    Feedlot operators are refusing to participate, though, because they don't want to be stuck with cattle that they can't sell. And some beef processors also remain skittish. "We're not accepting cattle fed with Zilmax," says Mike Martin, from Cargill, one of four companies that dominate the beef industry. (The others are Tyson, JBS, and National Beef.)

    Cargill's reluctance to take Zilmax-fed cattle, Martin says, is based in part on continued uncertainty about what caused those health problems in cattle. But he also mentioned another reason: The drug can complicate beef exports. Some countries won't accept beef from cattle that were fed Zilmax.

    Kelly Goss, a spokesperson for Merck Animal Health, says that organizing the Zilmax study has "been more time intensive and complicated than we anticipated." But she says the company still hopes to proceed with it. "Our intent is not to rush this," she says.

    Zilmax is part of a class of drugs called beta agonists, which are chemically similar to the human hormone adrenaline. Another beta agonist, called ractopamine, is commonly fed to pigs. They cause animals to grow more muscle.

    Dan Thomson, a researcher at Kansas State University who has studied the effects of Zilmax on cattle, says that Merck has been acting responsibly in its efforts to revive sales of the drug. "I think that the changes they've made have been all for the better," he says.

    Thomson also says that beta agonists such as Zilmax are not the sole cause of "fatigued cattle syndrome." Those symptoms, he says, are a reaction to stress. Beta agonists may contribute to it, but so do heat, being transported in trailers and interactions with humans. "We have been able to study it in cattle that were fed beta agonists and cattle that were not fed beta agonists," he says.

    NPR

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    Feedyard Closeouts: Profit/(Loss)
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    • Typical closeout for steers sold this week & hedged when placed on feed: ($68.47)
    • Typical closeout for un-hedged steers sold this week: ($75.35)
    • Projected closeout based on the futures & estimated Cost of Gain for steers placed on feed this week: ($184.46)
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    Slaughter Cattle:
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    Friday negotiated cash trade was slow on light demand in Nebraska and the Western Cornbelt. In Nebraska few dressed sales have sold today at 254.00.  Thursday in Nebraska few live sales sold from 160.00-160.50. In the Western Cornbelt a few dressed sales sold today at 254.00 with a few live sales ranging mostly from 157.00-160.00. Trade was limited on light demand in Kansas and Colorado. On Thursday in Kansas live sales sold from 159.00-160.00 with the bulk of sales at 159.00. In Colorado this week a few live sales have sold from 158.00-160.00. Trade was inactive on light demand in the Texas Panhandle with a few live sales trading at 159.00 on Thursday.
     
    Livestock Slaughter under Federal Inspection:
                                     CATTLE     CALVES  HOGS       SHEEP
    Friday 01/30/2015        (est)    105,000      2,000      424,000      5,000
    Week ago (est)                      108,000      2,000      419,000      5,000
    Year ago (act)                        113,000      3,000      414,000      6,000
    Week to date (est)                 550,000      9,000    2,144,000    38,000
    Same Period Last Week (est) 541,000    10,000    2,116,000    39,000
    Same Period Last Year (act)   570,000    13,000    1,978,000    37,000

    Saturday 01/31/2015      (est)    13,000         0         116,000         0
    Week ago (est)                        35,000         0          202,000        0
    Year ago (act)                            2,000         0         151,000         0
    Week to date (est)                  563,000      9,000   2,260,000    38,000
    Same Period Last Week (est)  576,000    10,000    2,318,000    39,000
    Same Period Last Year* (act)  572,000     13,000   2,129,000    37,000
    2015 Year to Date                2,365,000    40,000   9,720,000   158,000
    2014 *Year to Date               2,634,000    62,000   9,877,000   167,000
    Percent change                    -10.2%      -35.5%      -1.6%      -5.2%

    Negotiated prices paid for Slaughter Steers and Heifers:

    Live basis             Steers                               Heifers
    Over 80% Choice    156.00-160.00 avg 157.52   156.00-161.00 avg 159.69
    65 - 80% Choice     160.00-160.00 avg 160.00         -
    35 - 65% Choice            -                                 160.00-160.00 avg 160.00
    0 - 35% Choice              -                                      -
    Total all grades    156.00-160.00 avg 158.49   156.00-161.00 avg 159.72

    Dressed basis
    Over 80% Choice    252.00-254.00 avg 253.92   252.00-254.00 avg 253.85
    65 - 80% Choice     254.00-254.00 avg 254.00   251.00-254.00 avg 252.28
    35 - 65% Choice            -                                    -
    0 - 35% Choice              -                                    -
    Total all grades     252.00-254.00 avg 253.93   251.00-254.00 avg 253.09

     

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    National Grain Summary:
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    Compared to last week, grain and soybean bids were lower.  Corn saw pressure from favorable crop conditions in South America.  Wheat had losses on weak export demand and plentiful world supplies.  The higher dollar also triggered losses in the trading pits.  Soybeans saw spillover pressure from other grains and better than average yields in South America.  Weekly export sales for corn was listed at a total of 42.7 mb (1,084,200 mt), with 42.1 mb (1,068,200 mt) for the 2014-2015 marketing year.  Export sales for soybeans came in at 33.4 mb (909,000 mt) with 32.6 mb (888,200 mt) for the 2014-2015 marketing year.  Wheat export sales showed a total of 20.8 mb (565,400 mt), with 20.0 mb (544,400 mt) for the 2014-2015 marketing year.  Wheat was mostly 18-26 cents lower.  Corn was mostly 10-15 cents lower.  Sorghum 21-22 cents lower.  Soybeans traded 3-9 cents lower.

    Corn Futures Summary: Financial news and events seemed to depress commodities Friday. U.S. GDP during the last quarter of 2014 fell short of expectations, which sent most financial and commodity markets lower. The news may delay any Fed moves to raise interest rates, thereby undercutting the dollar. Deflationary news out of Europe may also have weighed on the ag markets. CBOT corn declined despite a reduced private estimate of Brazil’s crop and firm gulf quotes. March corn slipped 1.5 cents to $3.70/bushel Friday afternoon, while July sagged 1.75 to $3.86.

    Soybean Futures Summary: Brazilian currency losses apparently spurred CBOT soy losses. A surprisingly large deficit run up by Brazil’s government and a Brazilian official’s statement that the country is unlikely to support the real sent the currency sharply lower versus the dollar this morning. The implicit drop in the cost of Brazilian beans and products sent CBOT meal and soybean futures tumbling. Conversely, news of a big Pakistani purchase of U.S. soyoil and today’s crude rebound apparently supported soyoil. March soybean futures dropped 7.25 cents to $9.61/bushel at Friday’s close, while March soyoil rallied 0.46 to 30.00 cents/pound, whereas March meal dove $8.0 to $329.9/ton.

    Wheat Futures Summary: Wheat futures may have been reacting to Russian news. The same factors dragging the corn market lower seemed to depress wheat as well. We also wonder if traders were reacting to a report that Russian wheat destined for Egypt is stuck in Russian ports despite Sunday’s deadline for imposing its export tax. Egypt will apparently be exempt from the fee. Wire service reports simply cited technical factors and the long-standing global supply glut. March CBOT wheat tumbled 5.0 cents to $5.0275/bushel as the closing bell sounded Friday, while March KC wheat sagged 3.75 to $5.4025/bushel, and March MWE wheat sank 2.5 to $5.5675.

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    Five Year Moving Average - Corn & Wheat
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    Your Suggestions:
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