Date: October 8th, 2018
Cash feedlot trade last week was mostly steady to $1 higher at $110 to $112 live and $174 to $176 on a dressed basis. African swine fever continues to spread across Asia and Europe with China confirming now over 30 individual cases and over 50K head culled. Globally, more than 361,000 infected wild boars and domestic pigs have been reported to the World Organization for Animal Health, with more than 119,000 deaths in 2018. Once the virus has been detected on a pig farm, the entire population must be culled.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – W/E 10/05/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 249,600 47,600 39,200 336,400
Last Week 185,400 47,000 1,900 234,300
Last Year 211,800 41,400 23,300 276,500
Compared to last week, feeder cattle traded firm to 2.00 higher on good demand. Calves sold unevenly steady with some areas of the country showing advances on weaned calves and a decline on un-weaned or short weaned calves. Demand was light for short weaned calves which is very typical for this time of year with unpredictable weather patterns. The extreme temperature changes this week across much of the trading areas had buyers and seller concerned about herd health.
For the week, Friday September 28th to Friday October 5th, October Live Cattle +$.35, December -$.70, October Feeder Cattle -$.40, November +$.17, January -$.27, October Lean Hogs +$6.02, December +$.37.
Cattle slaughter from Friday is estimated at 108,000 head, down 11,000 from the week previous and down 4,000 from last year. For the week, 643,000 head, down 7,000 from the week previous but up 7,000 from a year ago. Beef production at 530.9 million pounds last week compared to 534.8 the week previous and 523.8 last year. Hog slaughter from Friday is estimated at 461,000 head, up 4,000 from week previous and up 1,000 from last year. For the week, 2,503,000 head, down 57,000 from the week previous and down 16,000 compare to a year ago.
Boxed beef cutout values steady to weak on light to moderate demand and moderate offerings for a total of 112 loads sold.
Choice Cutout__203.25 -.61
Select Cutout__191.74 -.24
CME Feeder Index:__158.18 +.37
CME Lean Hog Index.__69.31 +.16
Pork Carcass Cutout__79.56 -.35
IA-S.MN Wtd Avg Live__ 48.43 -.78, Wtd Avg Carcass Base__64.27 +1.03
National Wtd Avg Live__ 49.07 +.75, Wtd Avg Carcass Base__63.63 +.40
October live cattle still trending higher but these past few weeks has been chopping sideways. Last Monday was the new recent high at $114.35 with support at $113 and $112. October feeders look similar with rangebound trade from $155.87 to $159.90 since September 14th. January though did score a new contract high last week at $156.57 with support at $154 and $153. October lean hogs with a new recent high Friday at $68.82, $21 higher than the contract low less than 2 months ago. The next resistance area is up around $70 with the contact high at $75.30.
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Grains were supported to end last week with harvest still stalled in many areas and through the weekend. Funds overall were buyers through October 2nd with much larger short covering in both corn and soybean oil than expected. USDA reported 134,000 metric tons of 18/19 meal to the Philippines and strong export sales were reported Thursday, both helping meal futures higher to test resistance levels. Egypt bought 180,000 MT of Russian wheat, Iraq bought 50,000 MT of Canadian wheat and Taiwan bought 110,000 MT of US milling wheat last week.
For the week, Friday September 28th to Friday October 5th, December Corn +$.12, March +$.12, November Soybeans +$.23 ½, January +$.23, December KC Wheat +$.13, March +$.11 ½, December Chicago Wheat +$.12, March +$.13, December MPLS Wheat +$.18 ¾, December Soybean Meal +$10.60/T.
Grains were weaker overnight along with equites around the world, gold and crude. Corn finished 2 lower, soybeans 1 lower and wheat steady to 3 lower.
Today is a federal holiday with banks and government offices closed. Weekly grain inspections are delayed until tomorrow morning and crop progress until tomorrow afternoon. We do have another monthly USDA crop report on Thursday with expectations for higher yields for both corn and soybeans. The Quarterly Stocks report also gave us a higher ending stocks from a year ago which means higher beginning stocks for this marketing year. The average trade estimate has corn yield up ½ BPA to 181.8 and ending stocks up 146 MBU to 1.92 BBU. Soybean yield is projected a ½ BPA higher as well with ending stocks up only 53 MBU to 898 MBU.
Brazil’s soybean planting is up to 10% complete now which is double the amount vs. a year ago and the average pace. Russia is expected to export another 5 MMT of grain this month matching last month as 1.5 MMT will be pulled out state reserves to reduce budget spending on servicing stockpiles.
Rains and harvest delays continue this week as the band of the heaviest rain still stretches from the Southern Plains into Western and Northern Corn Belt. Flash flood warnings are popping up in many areas this morning. There is also a band of heavy rain expected along the East Coast this week. The latest 6-10 day outlook oddly showing below normal moisture for the Northern Plains and Corn Belt and only above normal in the Southwest with below normal temps for all expect the West Coast and Florida.
December corn still trying but unable to break the $3.70 resistance with the first line of support at $3.64 ¾ then $3.59. November soybeans still trending higher since the contract low at $8.12 ¼ with resistance next at $9.07. December KC wheat choppy with support at last month’s low at $4.98 ¾ and resistance up at $5.35 then at $5.46. December Chicago wheat looks similar on the charts with support at $4.95 and resistance up at $5.32 & $5.37. December soybean meal reaching above the $320 resistance overnight with the next up at $340 and support down at $300.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700