Date: October 15th, 2018
Compared to last week, live sales in the Southern Plains sold steady again at $111. Dressed sales in Nebraska sold at mostly $174, $1 lower than last week. This is the fifth consecutive week that live sales in the Southern Plains sold at mostly $111 although the range this past week was a little lower from $108 to $111.50 and $171 to $176 dressed. Fed Cattle Exchange online auction trade from earlier in the week had over 1,200 head consigned and zero sales. August 22 was the last time any cattle changed hands on the FCE.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 10/12/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 195,000 32,500 6,100 233,600
Last Week 249,600 47,600 39,200 336,400
Last Year 254,500 32,300 900 287,700
Compared to last week, steers and heifers sold 1.00 to 5.00 lower, except for the North Central area sold weak to 2.00 higher. Demand was reported as mostly moderate to good nationwide this week as buyer were willing to take on inventory. Consignment sheets were curtailed this week as moisture fell nationwide with some areas of Missouri receiving 8-10 inches of rain. Poor travel conditions in Nebraska and South Dakota after rain and snow in some areas left back country roads impassable. Limited receipts from the Carolina’s and Florida this week due to Hurricane Michael’s path from the Gulf to the Northeast. Health concerns are the biggest factor with the big temperature swings this time of year. Last week, temperatures were in the 80’s, while lows in the 30’s and 40’s followed just a few days later. These big fall temperature swings coupled with wet weather and mud can create health issues in a hurry for new owners of feeders. Extensive preweaning and vaccination programs enacted by producers are sought after by buyers.
For the week, Friday October 5th to Friday October 12th, October Live Cattle -$1.47, December -$1.97, October Feeder Cattle -$3.05, November -$3.60, January -$4.62, October Lean Hogs +$6.57, December -$2.92.
Cattle slaughter from Friday is estimated at 115,000 head, up 7,000 from the week previous and up 8,000 from last year. For the week, 639,000 head, down 4,000 from the week previous but up 3,000 from a year ago with year to date 2.5% ahead of last year. Beef production at 527.6 million pounds last week compared to 530.9 the week previous and 523.8 last year with year to date 2.9% ahead of a year ago.
Hog slaughter from Friday is estimated at 459,000 head, down 2,000 from week previous but up 2,000 from last year. For the week, 2,489,000 head, down 14,000 from the week previous and down 30,000 compared to a year ago with year to date 2.1% ahead of last year. Pork production at 518.9 million pounds last week compared to 521.9 the week previous and 529.6 last year with year to date 2.2% ahead of a year ago.
Boxed beef cutout values steady on light to moderate demand and moderate to heavy offerings for a total of 117 loads sold.
Choice Cutout__202.71 +.20, -.54 for the week
Select Cutout__192.28 -.21, +.54 for the week
CME Feeder Index:__157.48 -.89
CME Lean Hog Index.__68.99 -.29
Pork Carcass Cutout__80.04 +1.43
IA-S.MN Wtd Avg Live__ 48.49 no comp, Wtd Avg Carcass Base__60.65 -.59
National Wtd Avg Live__ 47.65 +.12, Wtd Avg Carcass Base__61.45 -.24
China reported another case of African swine fever, this time on a farm of 20,000 hogs, the largest farm yet to contract the disease. This is the first large scale, corporate owned hog farm to report the disease but it is located in the same province that reported 4 new cases last week.
October live cattle holding the $112 support last week with resistance up at $114.47. December with a key reversal lower on Friday with support at $116 then $114. December has been trending lower since hitting the contract high back on October 1st at $119.75. October feeders also trending lower this month, breaking through the support at $156 on Friday with the next down at $152. January looks similar although the long term higher trend is still in place with support at $148.40. December lean hogs now the front month with support at $54 and resistance up at $60.
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Export sales announced Friday morning were disappointing for all the grains but it seems the wet weather across the U.S. may just have been the supportive factor heading into the weekend. Corn export sales were just over 1 MMT, the lightest seen in a month. Soybeans sales included a reminder that relations with China are poor as they canceled 118,000 MT. Wheat should continue to see support with problems in the EU crop as well as in Argentina and Australia. Private estimates have the 2018 EU wheat crop at 132 MMT vs. USDA leaving their estimate the same at 137.50 MMT. Yields coming out of the Argentine harvest remain disappointing and the subsequent lowering of their crop estimates last Thursday was a positive sign. USDA did drop Australia’s estimate for the 2018/19 crop 1.5 MMT to 18.5 MMT.
For the week, Friday October 5th to Friday October 12th, December Corn +$.05 ½, March +$.05 ¾, November Soybeans -$.01 ½, January -$.00 ¾, December KC Wheat unchanged, March +$.01 ½, December Chicago Wheat -$.03 ¾, March -$.02 ¾, December MPLS Wheat +$.04 ¾, December Soybean Meal -$2.70/T.
Grains traded both sides of unchanged overnight with corn finishing ½ to 1 lower, soybeans reaching new recent highs overnight but coming back to finish steady to ½ lower and wheat finished steady to 1 higher.
NOPA September crush comes out later this morning with the trade looking for a 157.4 MBU crush compared to 158.8 MBU in August which had one more day of grind. If realized it would be the largest September crush on record. Last September’s crush was 136.42 MBU with the record at 139.9 back in 2007.
Brazil’s corn and soybean planting still ahead of the average pace with corn at 44% complete compared to 38% average and soybeans at 20% complete compared to 10% average. USDA will update crop conditions and progress here for the U.S. later this afternoon. I wouldn’t expect to see much harvest progress and both corn and soybeans behind pace now.
Rains this week staying in the South and Southeast should allow some areas to get back to fall harvest. The latest 6-10 day outlook still showing the above normal moisture for the South but below normal from the PNW into the Corn Belt. Temps are still below normal east and above normal west.
December corn breaking through the $3.70 resistance last week with the next up at $3.82 then $3.88, support down at $3.60. November soybeans still trending higher since the contract low at $8.12 ¼ with resistance at $8.75 and then $9.07. December KC wheat choppy with support at last month’s low at $4.98 ¾ and resistance up near $5.40. December Chicago wheat looks similar on the charts with support at $4.95 and resistance around $5.33. December soybean meal trending higher over this past month with resistance at $322 then $340 and support down at $310 then $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