Date: September 25th, 2018
Cattle futures continued under pressure to start this week as lean hog futures were mostly higher. The bearish cattle on feed report along with corn futures higher provided the initial pressure which could not be reversed out of. Beef prices were lower in the morning trade but bounced back to close higher on light volume.
Cold Storage Report for the end of August was overall bearish. Total red meat supplies up 4% from both last month and last year. Total pounds of beef in freezers were up 4% from the previous month and up 6% from last year. Frozen pork supplies were up 6% from the previous month and up 1% from last year.
Total frozen poultry supplies were up 5% from the previous month and up 11% from a year ago with total stocks of chicken up 6% from the previous month and up 19% from last year.
Oklahoma National Stockyards – Oklahoma City, OK
Livestock Weighted Average Report for 9/24/2018
Receipts Week Ago Year Ago
5,700 7,745 6,788
Compared to last week: Feeder steers traded unevenly steady. Feeder heifers steady to 2.00 higher. Steer calves 500-600 lbs. steady, 500-600 lbs. heifer calves steady to 3.00 higher. Lightweight steer calves sharply higher on a lighter test and lightweight heifer calves not well tested. Demand good. Quality plain to attractive.
Joplin Regional Stockyards – Carthage, MO
Livestock Auction Report for 9/24/2018
Receipts Week Ago Year Ago
5,007 4,885 5,757
Compared to last week, steer and heifer calves 3.00 to 5.00 lower, except steer calves under 400 lbs steady, yearlings steady to 4.00 lower. Demand and supply moderate.
Cattle slaughter from Monday is estimated at 119,000 head, up 5,000 from last week and up 2,000 from last year. Hog slaughter is back on track with Monday estimated at 472,000 head, up 56,000 from last week and up 13,000 from last year.
Boxed beef cutout values firm to higher on moderate to fairly good demand and light offerings for a total of only 89 loads sold.
Choice Cutout__206.16 +1.36
Select Cutout__195.39 +.68
CME Feeder Index:__157.30 +1.01
CME Lean Hog Index.__60.85 +1.76
Pork Carcass Cutout__80.02 +.84
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__61.59 +1.39
National Wtd Avg Live__ 44.76 -.48, Wtd Avg Carcass Base__60.53 +1.03
October live cattle holding a long term higher trend since mid-May. We have had no follow through from the limit higher move back on September 14th with resistance at $114 and support at $111. Feeders showing the same bearish flag pattern as fats. October has resistance up near $160 with support down at $151. October lean hogs continue to build strength testing resistance just shy of $62 with support at $58.
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Wheat gapped higher on the weekly close, there was quite a bit of export trading last week and Russian wheat prices were higher all of which helped support U.S. wheat futures to start this week. We still need to some of this world demand shift to the U.S. though to trigger a sustainable rally. Corn is on a 4-day rally although volume has been fairly light. Soybeans started the week under pressure as trade talks were cancelled between the U.S. and China.
Export inspections for the week ending September 20th were again strong for corn but still light for soybeans, wheat and grain sorghum. Corn totaled 49.7 MBU, soybeans 25.5 MBU, wheat 15.0 MBU and grain sorghum only 124,000 BU shipped to Mexico. China may not be importing soybeans directly from the U.S. or grain sorghum, but they did purchase 5.7 MBU of corn and 1.8 MBU of wheat this past week.
Crop progress on Monday showed 72% of the nation’s corn mature compared to 53% average and a sluggish week of harvest now at 16% compared to 11% average. Soybean harvest is 14% complete compared to 8% average. Cotton harvest is now 16% complete compared to 9% average pace. Grain sorghum harvest is slightly behind now at 30% complete with 50% of the crop mature. Winter wheat planting now 28% complete compared to 22% last year at this time and 26% 5-year average.
Grains were mixed overnight with corn and wheat flipping lower and soybean higher. Corn finished 2 lower, soybeans 3 higher, wheat steady to 3 lower and meal $2/T higher.
USDA reported a private sale of 239,630 MT or 9.4 MBU of corn sold to Mexico this morning. Japan’s Ministry of Agriculture seeking 109,150 MT or 4 MBU of food-quality wheat from the U.S., Canada or Australia after already purchasing a like amount of mixed quality optional origin wheat.
Rains continue this week for the eastern 1/3 of the U.S. The latest 6-10 day outlook showing above normal moisture for all except the East Coast. Temperatures are forecasted above normal for the southern half of the U.S. but well below normal and freezing temps in the Northern Plains and Northern Corn Belt.
December corn off its recent contract low at $3.42 ½ with the first line of resistance is at $3.70. November soybeans also off from the contract low at $8.12 ¼ last week but still under pressure with a massive U.S. crop and the Chinese trade war ongoing. December KC wheat back to test the recent high from earlier this month with the next line of resistance up at $5.50 and good support at $5.00. December Chicago wheat looks similar on the charts with support at $4.95 and resistance up at $5.40. December soybean meal rangebound this past month from $301.60 to $320.50 yet still holding a long term lower trend.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700