Date: February 25th, 2019
Only light cash feedlot trade in the Western Corn Belt at $127 to $128 live and $202 dressed through Friday afternoon. This is a solid $2 higher than the week previous yet such little volume and nothing in the South. After the close, USDA updated Cattle on Feed as of January 1 at 11.7 mln head which was in line with expectations at 102% vs. a year ago. Placements were friendly coming at 98% vs. an expected 101% but may have little impact due to delay in the data. December Marketings were in line at 99% compared to a year ago.
Placements by State (versus previous year)
Iowa at 85%, Kansas 99%, Nebraska 89%, Texas 106%, South Dakota 156%, Oklahoma 67%
Placements by Weight Class (expressed as % of previous year)
Under 600 lb 95%, 600-699 lb 112%, 700-799 lb 90%, 800-899 lb 102%, 900-999 lb 90%, Over 1000 lb 89%
Beef net sales for that six week period were reported at 90,100 MT, which equates to 15k MT per week essentially. Actual exports were 72,100 MT or a little over 12k MT/week. Pork net sales were 122,900 MT, which is 20,483 MT/week. Actual exports were 124,600 MT and that equates to 20,766 MT/week. Decent pork numbers, but the beef totals were neutral.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 02/22/2019
RECEIPTS: Auctions Direct Video/Internet Total
Last Week 208,200 57,700 48,600 314,500
Last Week 223,800 78,200 3,600 305,600
Last Year 222,100 44,900 39,000 306,000
Compared to last week, steers and heifers sold uneven; 1.00 lower to 2.00 higher in the North and South Central areas while the demand for steers and heifers waned in the Southeast for a steady to 4.00 lower price trend. Even though auction receipts just barely topped the 200K mark for this report, feedlots and grazers were ready to procure cattle this week if producers could get them to town. Many auction locations are still reeling from a winter storm last Friday and earlier this week as many locations received more snow than anticipated, making feeding stock the main priority when daybreak comes. Calving season has started in many areas now and producers are somewhat concerned with the abundance of moisture received in recent weeks. Some early born calves are coming into this world seeing snow and anecdotes of rancher neighbors having either bad or good luck this year is abundant. One issue that some are happy about is the above normal snowfall. After last year’s drought that encompassed much of the grassland regions, ranchers like to see the snow as previous generations remind the newer stewards of the land that “snow makes grass”.
For the week, Friday February 15th to Friday February 22nd, February Live Cattle +$2.05, April +$1.70, March Feeder Cattle +$.30, April +$.07, April Lean Hogs -$4.07, June -$.82. Boxed Beef, Choice +$2.54 @ $219.39, Select +$1.36 @ $212.35.
Cattle slaughter from Friday estimated at 114,000 head, up 3,000 from the week previous and up 6,000 compared to a year ago. For the week, 577,000 head, down 19,000 from the week previous but up 2,000 from a year ago. Beef production estimated at 474.6 million pounds compared to 492.2 million the week prior and 471.9 million pounds last year.
Hog slaughter from Friday estimated at 472,000 head, up 7,000 from the week previous and up 23,000 compared to a year ago. For the week, 2,512,000 head, down 2,000 from the week previous but up 120,000 from last year. Pork production last week estimated at 537.9 million pounds compared to 537.7 the week prior and 512.1 million pounds last year.
Boxed beef cutout values higher on good demand and light offerings for a total of 82 loads sold.
Choice Cutout__219.39 +1.32, +2.54 for the week
Select Cutout__212.35 +.94, +1.36 for the week
CME Feeder Index__141.31 +.20
CME Lean Hog Index__53.65 -.41
Pork Carcass Cutout__59.01 -2.22
IA-S.MN Wtd Avg Carcass Base__46.30 +.28
National Wtd Avg Carcass Base__46.76 +.42
February live cattle still holding the higher trend that has been in place since mid-November and into a new contract high last week at $128.75. The next area of resistance is up near $130 from the weekly charts and going back to last February. March feeders still chopping sideways to lower with support at $142 and resistance up at $145.50 then $147.50. April lean hogs still holding a lower trend, hitting a new contract low last week at $52.25, a drop of over $20 since early December.
******************************************************************************************************************
Over in the grains, export sales were updated for the previous six weeks through the week ending February 14th. Wheat sales were above expectations at 3.575 MMT. Corn sales of 6.057 MMT were in line with expectations. Soybean sales though were near the bottom of the trade range at 6.532 MMT with China listed at 3.9 MMT. China is now at the top of the list with over 7.4 MMT of soybeans booked so far this marketing year, but that is still 72% behind a year ago. After the close USDA Ag Sec Perdue via twitter said China has committed to buying an additional 10 MMT of US Soybeans.
Trade talks in Washington between the U.S. and China negotiators were extended by a couple more days. It was reported that the sides have reached an agreement on currency issues and they have made progress on some very important structural issues and purchases although much work still has to be done to bridge remaining gaps. The March 1 deadline remained in place when the markets closed on Friday but shortly after President Trump stated he would extend the deadline on raising additional tariffs with trade talks progressing well.
The USDA held its outlook forum last week plugging in model and trendline data for the 2019/20 crops. These are not official UDSA estimates and do not include any producer survey data.
Soybean acres projected at 85 million, plugging in a 49.5 trend yield for a total crop of 4.175 BBU which is 369 MBU below 18/19. Exports were raised by 150 million bushels from 18/19 to 2.025 bb which is still below recent years but hard to realize without a significant bump in Chinese business. Ending stocks come down by 65 MBU from 18/19 to 845 MBU.
Corn acres were projected at 92 million with a trendline yield 176.0 would place production at 14.9 BBU, 3% higher than 18/19. Ending stocks are projected at 1.7 BBU, down 5% from 2018/19. Wheat acreage at 47.0 million with a yield at 47.8 would result in a production estimate at 1.9 BBU and ending stocks down 66 MBU to 944 MBU.
For the week, Friday February 15th to Friday February 22nd, March Corn +$.00 ½, New Crop December +$.02 ½, March Soybeans +$.02 ¾, New Crop November +$.02 ½, March KC Wheat -$.18, New Crop July -$.19, March Chicago Wheat -$.17 ½, New Crop July -$.14 ¼, March MPLS Wheat -$.06 ¼, March Soybean Meal -$.90/T.
Overnight grains were mixed with corn 1 to 2 higher and soybeans 6 to 8 higher while wheat finished 3 to 5 lower.
USDA reported private sale of 279,400 MT or 11 MBU of corn for delivery to Mexico. Of the total, 88,500 MT or 3.5 MBU is for delivery during the 2018/2019 marketing year and 190,900 MT or 7.5 MBU is for delivery during the 2019/2020 marketing year.
Hopefully the last round of winter weather comes in later this week. Temps remain much below normal in the North through the end of the month. The latest 6 to 10 day outlook still showing below normal temps for all except in the Southwest and Southeast. Precipitation forecasts are above normal form the West Coast into the Central Plains and the eastern 1/3 of the U.S.
March corn bumping up against resistance at $3.78, still stuck in the wider rangebound trade since this past fall from $3.67 to $3.90. March soybeans still holding the long term higher trend from this fall with support at $9.00 and resistance at $9.31. March KC wheat crashing lower these past couple weeks into a new contract low and finding support near $4.50 with resistance up at $4.95. March Chicago wheat hitting a new contract low at $4.75 ¾ and resistance up at $5.18. March soybean meal still rangebound but on a lower trend so far this year testing the long term support around $303 last week but holding so far.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700