Date: September 8th, 2020
Livestock futures finished last week on a higher note, cattle lower though week over week as hogs continue to rally. Cash feedlot trade losing some ground with live sales reported last week from $102 to $104 and dressed trade from $162 to $165, both of which $2 to $4 lower than the week previous.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 09/04/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 160,800 27,900 5,200 193,900
Last Week: 156,200 38,700 280,300 475,200
Year Ago: 106,800 58,100 14,700 179,600
Compared to last week, steers and heifers sold 1.00 to 5.00 lower. Around the Labor Day holiday, many auctions proceed to have customer appreciation sales. Many ranchers set their marketing plan around selling cattle around the holiday. This year, selling cattle a couple weeks ago would’ve made the check a few dollars heavier. Drought designation of D0 and higher has now enveloped over 57 percent of the country, the most prevalent in the Western half of the United States. The whole state of Colorado has a circle drawn around it on the University of
Nebraska’s drought monitor map, which delineates dominant drought impact. Many in higher elevations are hoping for a wet fall and more snow in the winter; just so they can get some moisture back in the soil. It did snow in some higher elevations this week in Wyoming, so there could be some optimism moving forward. Calf runs could start earlier than normal in the Northern Plains if freezing temperatures come early. Ranchers will be content to move those calves off the cows as it is easier to feed a calf in the backgrounding yard instead of having that cow lose condition going into winter.
For the week, Friday August 28th through Friday September 4th, October Live Cattle -$.45, December -$.02, September Feeder Cattle -$2.37, October -$1.67, October Lean Hogs +$6.17, December +$3.05. Boxed Beef, Choice -$3.55 @ $225.85, Select -$5.56 @ $209.30. Pork Carcass Cutout +$9.17 @ $80.56.
Cattle slaughter from Friday estimated at 115,000 head, down 1,000 from the week previous and down 3,000 from last year. Saturday’s kill was estimated at 44,000 head bringing week to date up to 589,000 head, up 1,000 from the week previous and up 119,000 from last year. Beef production estimated at 527.3 million pounds compared to 544.6 million the week previous and 466.3 million pounds last year. Year to date beef production is down 1.8% compared to last year with cattle slaughter -4.4%.
Hog slaughter from Friday estimated at 460,000 head, down 21,000 from the week previous but up 31,000 compared to a year ago. Saturday’s kill was estimated at 119,000 bringing the week to date up to 2,484,000 head, down 173,000 compared to the week previous but up 267,000 compared to a year ago. Pork production last week estimated at 524.1 million pounds compared to 560 million the week previous and 466.5 million pounds a year ago. Year to date pork production is up 2.5% compared to last year with hog slaughter up 1.7%.
Boxed beef cutout values sliding lower with 108 loads sold on Friday.
Choice Cutout__225.85 -1.39
Select Cutout__209.30 -3.20
CME Feeder Index__140.20 +.52
CME Lean Hog Index__58.64 +.51
Pork Carcass Cutout__80.56 +.37
IA-S.MN Wtd Avg Carcass Base__47.17 +.73
National Wtd Avg Carcass Base__45.89 -.47
October live cattle holding a lower trend since mid-August with support next at $102.50 and resistance at $106 then $109. September feeders also holding a lower trend, now down $12 since peaking in early August, with support next at $135 and resistance at $141.50. October lean hogs sharply higher last week and $12 off the contract low from earlier this summer with resistance at $61 and support around $53.
Grains were mixed to end last week and steady to higher week over week. Managed money or funds continue to buy corn and soybeans, now estimated long 140K soybean contracts and only short 25K corn. Export sales continued last week bringing total outstanding new crop corn to 621 MBU, 3 times that of a year ago and nearly half of that total allocated to China. Soybean new crop sales are at 888.7 MBU, 4 times that of year ago and grain sorghum sales are at 89.9 MBU compared to only 405,000 BU at this time a year ago. Rainfall has been spotty at best this past week. This week will bring in a massive cold front concerning some in the Northern Corn Belt but with it some moisture relief across the Corn Belt.
For the week, Thursday August 28th through Friday September 4th, December Corn -$.01 ¼, March -$.00 ¾, November Soybeans +$.17 ½, January +$.17 ¼, December KC Wheat +$.00 ¼, March +$.00 ¾, December Chicago Wheat +$.01 ½, March +$.02 ¼, December MPLS Wheat +$.03 ¼, March +$.04 ¾, October Soybean Meal +$8.00/T, December +$7.50/T.
Grains traded both sides of unchanged overnight and faded to finish lower with corn 1 lower, soybeans 4 lower and wheat 2 to 7 lower.
Australia raised its wheat production estimate for this year another 2.2 MMT to 28.9 MMT. This also coming off last year’s severely drought stricken crop that produced only 15.2 MMT. USDA will update both domestic and world supply and demand estimates this coming Friday morning at 11 CST.
Chinese year to date soybean imports through August reported at 64.74 MMT, up 15% from a year ago. August imports totaled 9.6 MMT, down 5% from July yet slightly higher than a year ago. USDA announced private sales of 664,000 MT or 24.4 MBU of soybeans sold to China and 101,600 MT or 4 MBU of corn sold for unknown destinations.
Weather this week could be wild with the cold front passing through, dropping temps in Colorado from upper 90’s on Monday to a hard freeze tomorrow. Heavy rains are forecasted for the Southern Plains and Western Corn Belt with heavy snow for the Rockies. By midweek, temps warm back up for a more seasonal pattern. The 6-10 day outlook still showing below normal temps across the middle of the U.S. and above normal on both coasts with above normal moisture in the South and East and now below normal from the PNW into the Corn Belt.
December corn testing the resistance area overnight up to $3.63 ½, last week’s high at $3.64 ¼, support at $3.53 then $3.48. November soybeans did reach up for a new recent high overnight at $9.77, a price not traded since January 9th. The high for this year is at $9.82 ¾ with support at $9.50 and $9.40. December KC wheat hit a new 3-month high on September 1st testing the $4.90 resistance but since has pulled lower now testing support around $4.66. December Chicago wheat also spiked higher last week to test resistance around $5.70 with support down around $5.30. December soybean meal testing resistance around $318, the highs from early March, with support at $308 then $298.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700