Date: August 29th, 2018
Cattle futures gave back half their gains from Monday on yesterday disappointing follow through. Lean hog futures opened higher but sellers stepped in pressuring the markets for the rest of the day with the nearby October contract touching over $3 lower in the last few minutes of trade. There have been a couple thousand of cash fed cattle trade so far this week at $106 to $108.50 live and $168 to $170 dressed, $1 to $4 lower than last week. Fed Cattle Exchange online auction scheduled for later this morning with 751 head consigned compared to last week’s 359 head of which 280 head sold at $109.50.
Cattle slaughter from Tuesday is estimated at 119,000 head matching last Tuesday and up 2,000 from last year. Hog slaughter from Tuesday is estimated at 468,000 head, up 1,000 from the week previous and up 18,000 from last year.
Boxed beef cutout values weak to lower on light to moderate demand and offerings for a total of 101 loads sold.
Choice Cutout__212.53 -1.10
Select Cutout__204.41 -.44
CME Feeder Index:__150.60 -.04
CME Lean Hog Index.__47.09 -.70
Pork Carcass Cutout__64.90 -.09
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__36.77 -.11
National Wtd Avg Live__ 30.37 +1.12, Wtd Avg Carcass Base__37.03 -.14
China’s Ag Ministry now saying it is still unclear how the African swine fever virus has been spreading, nor how widely it has spread. They also expressed uncertainty as to how the situation will develop, but noted the virus had been in neighboring countries for some time, and transmission risk remained large. China has reported four outbreaks of African swine fever in four provinces in less than a month and has culled more than 25,000 pigs, highlighting the challenge of containing the highly contagious disease.
Both August live cattle and feeders expire the end of this week. Live cattle futures still holding a lower trend. October has support around $106 and resistance up at $112. Feeders have been trending lower since mid-July. September with support at $147.90 then around $146 with resistance up at $151. October lean hogs with an island top from last week, recent high at $59.50 and the contract low from earlier this month down at $47.82.
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Corn and soybeans were both under pressure yesterday and only a few cents from the contract lows hit in mid-July. Wheat futures held steady to a couple lower with Russia selling another big chunk of wheat to Egypt. Prices are higher this round and stocks are dwindling though. Australia is still hot and dry helping to provide some support to world wheat as well.
Overnight, grains bounced back higher led by the wheat complex finishing 12 to 17 higher. Soybeans were 4 to 5 higher and corn 2 higher. More rumors coming out that Russia will be curbing wheat exports.
Trade is still leading the news headlines this week with the U.S. and Mexican side of NAFTA done and Canada in this week to try and wrap it up. Not much out there though on progress with China though.
Heavy rains are still in the forecast from eastern KS and MO up through the Great Lakes. The latest 6-10 day outlook still showing normal to above normal precip and above normal temps for all except the PNW.
September corn with the contract low as the next support at $3.37 ¼, resistance at $3.67 and $3.74. December corn with the contract low down at $3.50 ¼ and resistance at $3.82 and $3.88. November soybeans contract low at $8.26 ¼ with resistance at $9.14 and $9.22. September KC wheat show a key reversal higher from last night with resistance up at $5.39 and support down at $4.70. September Chicago wheat did not make a new recent low overnight, testing resistance around $5.20 with the next up at $5.63 and support at $4.80.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener / Alex Gasper
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700