Date: October 1st, 2018
Cash feedlot trade this past week was mostly steady again at $110.50 to $111 live but $1 lower at mostly $174 on a dressed basis. The Quarterly Hogs and Pigs report this week confirmed the hog industry is still expanding with a 3% increase in total hog inventory, breeding inventory and market hogs. Feeders and calves saw some pressure earlier in the week but stabilized when futures jumped higher midweek.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 09/28/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 185,400 47,000 1,900 234,300
Last Week 175,800 114,500 40,000 330,300
Last Year 166,500 42,700 1,800 211,000
Compared to last week, steers and heifers sold uneven; 2.00 lower to 2.00 higher. Good to very good demand for the larger strings of yearling steers and heifers coming off grass in the Northern Plains this week. Herd health programs are becoming more of an issue earlier this year as temperature swings in the Midwest are ranging from the lows in the 40’s to the highs in the mid 80’s in a matter of a couple of days.
For the week, Friday September 21st to Friday September 28th, October Live Cattle +$.37, December +$.40, October Feeder Cattle +$.10, November +$.25, January -$
.20, October Lean Hogs +$1.87, December +$.52.
Cattle slaughter from Friday is estimated at 119,000 head, matching the week previous and up 4,000 from last year. For the week, 650,000 head, up 7,000 from the week previous and up 2,000 from a year ago. Hog slaughter from Friday is estimated at 457,000 head, up 15,000 from week previous and up 5,000 from last year. For the week, 2,568,000 head, up 227,000 head from the week previous and up 40,000 compare to a year ago.
Boxed beef cutout values lower on Choice and higher on Select on light to moderate demand and light offerings for a total of 113 loads sold.
Choice Cutout__203.88 -.83
Select Cutout__193.44 +.88
CME Feeder Index:__156.89 -1.24
CME Lean Hog Index.__66.45 +1.11
Pork Carcass Cutout__80.08 -.43
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__62.98 -.27
National Wtd Avg Live__ 48.70 +.21, Wtd Avg Carcass Base__63.00 -.20
October live cattle holding a long term higher trend since mid-May. Mid-week, with the triple digit move higher, October tested the recent high from September 17th but unable to break through with that being the next resistance at $114 and support at $111.90. October feeders hit a new contract higher back on September 14th at $159.90 with support at $156. October lean hogs with a new recent high last week at $63.02, resistance next up at $66 with support near $57.40.
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Export sales this past week for finally good for all the grains but USDA threw another bearish report out Friday that took out the gains for the week. Corn Stocks Down 7% from last September but above the top end of the pre report trade estimates. Soybean Stocks Up 45% from a year ago and up 37 MBU from last month with an increase of 19 MBU to last year’s production. All Wheat Stocks Up 5% compared to a year ago and up 35 MBU from a month ago as exports are lagging. USDA increased all wheat production by 7 MBU vs. their estimates in August. HRW was increased 1 MBU, SRW though down 7 MBU but HRS plus Durum up 22 MBU.
For the week, Friday September 21st to Friday September 28th, December Corn -$.01, March -$.01 ¼, November Soybeans -$.01 ¾, January -$.01 ¾, December KC Wheat -$.14, March -$.13 ½, December Chicago Wheat -$.12 ¾, March -$.13 ½, December MPLS Wheat -$.10, December Soybean Meal +$.10/T.
Grains were mixed overnight but finished steady to firm. Corn finished 2 to 3 higher, soybeans steady to 1 higher and wheat steady to 2 higher.
Brazil’s corn and soybean planting is underway with favorable conditions. It is currently estimated that 5% of the soybean crop is planted vs. 2% last year and for an average pace. First crop corn is estimated at 33% planted vs. 23% last year and 26% for an average pace.
Russian wheat prices are higher for now the 3rd consecutive week with total grain exports in September at 4.5 MMT, down 16% from the month prior.
The U.S. reached a last minute deal with Mexico and Canada to revise NAFTA. President Trump will have the announcement later this morning. At first glance, the new USMCA not NAFTA 2.0, will help the dairy industry and eliminate any additional tariff ramp ups on all ag products.
Rains and harvest delays continue this week with the band of the heaviest rain for the week forecasted from the Southern Plains into the Northern Corn Belt. The latest 6-10 day outlook showing above normal moisture for all with below normal temps west and above normal east.
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 with resistance from $8.60 to $8.62 and then around $9.00. December KC wheat with the recent low last month at $4.98 ¾ and resistance up at $5.35 then at $5.50. December Chicago wheat looks similar on the charts with support at $4.95 and resistance up at $5.32 & $5.40. December soybean meal rangebound this past month and a half from $301.60 to $320.50 yet still holding a long term lower trend.