Big day for the hogs on Monday in reaction to Friday’s bullish Hog and Pig report data. Total inventory numbers came in 4% below last year, breeding herd numbers were down 2% and market hog numbers were down 4%. Adding a little more spice to the mix, summer farrowings were down 7% and 2nd intentions for Sep-Nov were down 4%. That full gamut of friendly news resulted in $4+ higher closes across most contract months with the only exceptions to that being the front month October and a couple of deep deferreds.
Contrary to the hog reports bullish numbers, COF data was mildly bearish versus the expectations and hogs didn’t provide any spillover into the cattle futures. The live cattle closed mildly weaker and with corn off to the races higher, feeders got thumped. The November contract was the weakest, closing $3 lower. Everything else was in the $1-$2 lower range.
For the October contract in feeders, yesterday’s drop took out the spike low from two weeks ago, making the chart look really bad again. Granted, that was the only contract month to drop into new recent low values, but that contract becomes the spot month after Thursday’s close on the last day of the month when Sept futures go off the board. Chart technicals do NOT look good in cattle.
Cattle slg.__ 119,000 unch wa +3k ya
Choice Cutout__302.70 -.62
Select Cutout__274.38 -.15
Feeder Index:___154.87 +.83
Lean Index.__91.51 +.04
Pork cutout___111.95 +1.18
IA-S.MN direct avg__74.73 no comp
Hog slg.__478,000 +15k wa -12k ya
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In the grain and oilseed trade, it was a slow day for wheat complex trade, but the fall crop markets got exciting to the upside shortly after the open. Corn and beans were both up double digits for quite a while, but the beans faded to just mildly higher net changes by the closing bell. Corn stayed above the 10 higher mark. Everything energy sector related saw good gains yesterday, including the ethanol side of the corn equation, which probably also helped corn hold the higher levels.
That’s odd trade for the fall crop markets in the middle of a very active harvest pace across the country, but then again, we have a big quarterly stocks report coming up this Thursday, so volatility is naturally going to uptick into that important data. In that report, the stocks numbers we get for corn and soybeans will end up being the old crop ending stocks totals in the next S&D report. There is also a small grains summary coming out that is the final production numbers for this year’s wheat crop.
Weekly export inspections data showed corn and bean numbers starting to pick up in the aftermath of Hurricane Ida. Bigger exports than a week ago, but still not full steam ahead obviously. Plus, in the bigger picture, the numbers this week were on the light side in everything. Corn export loadings were 20.4 mln bushels versus a weekly pace needed to hit USDA’s export target of 49.6 mln. Milo came in at 4.6 mln bushels and need 6.4 mln/wk. Soybeans were 16.2 mln and need 41.9 per week to keep up with USDA’s target pace. Wheat needs 15.4 mln per week and we got a whopping 10.5 mln. There were two weeks in a row with good wheat sales and shipments and then poof, it was gone. Bad sales last Thursday, bad shipments yesterday.
The top destination in each were; Nigeria for wheat, Mexico in corn and China for milo and soybeans.
Fund activity yesterday had them estimated sellers of 1k wheat and buyers of 2k beans and 10k corn.
Crop progress data yesterday showed 74% of the nation’s corn crop mature and 18% of it harvested. That’s an 8 point jump in harvest versus last week and 3 points ahead of the 5 year average. 75% of the soybean crop is dropping leaves and 16% of the crop is off already. That was a gain of 10% over last week and 3 points ahead of the average pace. Milo harvest is 31% done versus 32% normally.
In the wheat, 34% of winter wheat acres are seeded. Last week it was 21% and it’s also 2% ahead of normal. Nebraska is 61% done, Kansas 27%, Colorado 57%, Oklahoma 28% and Texas 37% complete.
6-10’s last night showed normal to below temps for the Panhandle and most of Texas. From Kansas north and all through the Corn Belt, temps were above normal. Precip chances were below normal from Nebraska and Iowa north and that clipped the northern edge of Illinois. Everywhere south of that line was a mix of normal to above on precip chances.
8am daily export reporting yesterday showed 334k mt’s of US soybean sales to China. Today there was 150k mt’s of US corn reported sold to Mexico.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com