Nice day of upward movement in the grains yesterday, but it was a lot different story in the meats. In the cattle complex, the live market was quietly mixed at the close and after a nasty drop on Tuesday that took futures way under last week’s cash, it had everyone scratching their head wondering whether futures were going to stop, or whether it was going to break cash really hard. As of the futures close yesterday, cash hadn’t actively traded anywhere and packer bids in the north were within $2 of last week on the bottom side. By the end of the day, some $247 dressed business had taken place up north, which is $2 under last week and Texas had moved a few at $153 live, which is down $2 as well. Still a positive basis for any of those sellers that were hedged, but also still no convergence in the delivery window here.
Weekly export sales data for the meats finally made the decisive switch from current year sales dominating the totals, to 2023 business being the bulk of the action. Net beef sales were 17,900 mt’s total and only 1600 of that was for this year. Actual exports were 16,900. Both of those numbers are at the midpoint of the friendly category. South Korea, China and Japan were the top three buyers. South Korea, Japan and Mexico were the top three destinations for actual shipments.
Net pork sales were a combined 10,300 mt’s, which is terrible. Actual exports were solid though at 32,500 mt’s. Mexico, Columbia and China were the top three buyers. Mexico, China and Japan were the top three takers in actual shipments.
Cattle slg.__127,000 -1k wa +7k ya
Choice Cutout__248.96 +6.31
Select Cutout__219.77 +.63
Feeder Index:___179.02 +.49
Lean Index.__82.78 –.16
Pork cutout___84.45 -5.37
Hog slg.__492,000 -2k wa +15k ya
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We got a good ol’ dead cat bounce in wheat after dropping hard for three straight sessions and then rallying hard yesterday. KC and Chicago were both up over 20c at times, although Chicago was the only market closing that high. Rumors were starting to float around again regarding Russia and the use of nukes and that likely spooked the market just enough to switch the trend, at least for the moment.
Beans were up double digits as well and that was day #4 of higher closes in beans, brought to you in part from dryness and heat in Argentina being a big focus of attention. It’s a legit focus of attention as well if you follow long term weather statistics versus recent temp and rainfall data from down south there. If you remember back to 5 sessions ago, beans tanked to the tune of 40c and that was on the heels of bean oil being limit down, which was US related, not a world issue. Argentina weather has been a progressive build in futures market premium. Beans started an uptrend back in early October and aside from a few wild big swing days, it has been a very regimented trek higher. Yesterday’s peak almost poked into new recent highs, but didn’t quite get there. Last night the Jan bean contract did hit new recent highs and now the next resistance levels on the chart are $14.93 and $15.12. Not that $14 sounds bad for beans, but $15 certainly has an even better ring to it!
Corn finished the day higher, but just mildly. There’s been some talk this week about China easing their hard line restrictions on Covid and big picture, that’s friendly to everything ag, if in fact it happens. Weekly EIA ethanol data for corn showed production up 6% from the previous week, which is obviously very friendly. On the flipside, imports averaged 10k barrels/day, down a little from last week’s 25k number, but prior to that it had been a decent string of weeks with zero imports. Blender demand was down 5% and stocks increased by 1.7%.
Fund activity yesterday had them estimated buyers of 4k wheat, 5k corn and 4k beans.
Weekly export sales in the grains were bullish beans, a little bearish corn and solid bearish in milo and wheat. Wheat didn’t manage to make it into double digit territory, coming in at 7 mln bushels of old crop and zero new. Milo sales were 100k bushels total. Corn sales were 27.2 mln old crop and zero new. Soybean sales were 63.1 mln bushels of old crop and 1.1 mln new.
The top buyer in everything was Mexico in corn, followed by China and China was the top buyer in everything else, including wheat.
8am daily export reporting showed 718,000 mt’s of US soybean sales to unknown destination and another 118k mt’s of US beans to China. There was nothing in the 8am reporting system yesterday, but back on Tuesday there was 514k mt’s in total bean business.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com