Date: October 22nd, 2018
Cash feedlot trade in the Southern Plains sold steady again at $111 live. This is the 6th consecutive week of steady money which actually can be construed as bearish due to the fact that normal seasonality pushes cash trade higher this time of year. Dressed sales in Nebraska sold steady as well, mostly $174, with live trade steady to $2 higher from $109 to $111. Fed Cattle Exchange online auction trade from earlier in the week had over 1,100 head consigned and zero sales. August 22 was the last time any cattle changed hands on the FCE.
Cattle on Feed as of October 1st was slightly below the average estimate at 105% vs. a year ago but still the largest inventory for October since the data series began in 1996. Placements were friendly at only 95% and marketings were at 96% with one less business day compared to last September which means it is actually at 100.5% vs. a year ago.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – W/E 10/19/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 270,300 25,400 27,700 323,400
Last Week 195,000 32,500 6,100 233,600
Last Year 305,200 36,300 18,500 360,000
Compared to last week, steer and heifer calves sold steady to 5.00 lower. Yearling steers and heifers sold steady to 3.00 lower. Receipts were much larger than last week as road conditions improved dramatically in certain areas as dryer and warmer weather permeated across the Plains. In the Northern Plains, calf runs are just getting started and high quality weaned calves are in demand. The demand for unweaned calves this week was moderate while demand for preconditioned and weaned calves was moderate to good. The lighter runs in recent weeks had northern backgrounders chomping at the bit to get those calves in yards or back out on grass. Great grazing conditions coupled with ample forage supplies, both growing and harvested, have moved calf runs in that area just a little later than normal. Yearlings are in demand this time of year as feedyards will try to get the new procurements in the processing plant prior to June becoming the front month on the CME.
For the week, Friday October 12th to Friday October 19th, October Live Cattle -$.07, December +$.60, October Feeder Cattle -$.05, November -$.52, January -$1.00, December Lean Hogs -$3.40, February -$3.20.
Cattle slaughter from Friday is estimated at 115,000 head, matching the week previous and up 1,000 from last year. For the week, 625,000 head, down 14,000 from the week previous and down 8,000 from a year ago. Beef production at 517.9 million pounds last week compared to 528.6 the week previous and 521.8 last year.
Hog slaughter from Friday is estimated at 464,000 head, up 5,000 from week previous and up 9,000 from last year. For the week, 2,589,000 head, up 100,000 from the week previous and up 121,000 compared to a year ago. Pork production at 541.2 million pounds last week compared to 519.4 the week previous and 520.9 last year.
Boxed beef cutout values higher on moderate to good demand and light to moderate offerings for a total of 107 loads sold.
Choice Cutout__207.93 +1.11, +5.22 for the week
Select Cutout__194.24 +1.89, +1.96 for the week
CME Feeder Index:__155.36 -.14
CME Lean Hog Index.__67.22 -.54
Pork Carcass Cutout__78.42 +.30, -1.62 for the week
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__58.50 -.30
National Wtd Avg Live__ 45.32 +.17, Wtd Avg Carcass Base__58.72 -.44
USDA will release monthly cold storage data later this afternoon. Expectations for U.S. pork supplies in cold storage of 597 million pounds, which would be down from 619 million pounds as of Sept. 30, 2017. Beef in cold storage is estimated at 534 million pounds, up from 496 million pounds a year ago.
October live cattle holding the $112 support with resistance at $113.67 and then $114.47. December support holding at $116 as the contract has been trending lower since hitting the contract high back on October 1st at $119.75. October feeders also trending lower this month, with support at $154 then $151. January looks similar with support at $148 and then at $144.50. December lean hogs gapped lower last Thursday breaking below all major moving averages with support next at $50.
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Wheat basis firming as mills running a little short with most grain movement focused on fall harvested crops. Futures have been rangebound and the range is tightening with a slight uptrend since the lows in mid-September. Buenos Aires Grain Exchange reported Argentine corn planting at 33% complete and wheat harvest just getting started at 1% complete, with early yield indications worse than expected due to frost.
Corn and soybeans both pulled back on Friday and for the week as harvest picked back up and provided the most pressure. Managed money were actually buyers over this past week, covering short positions. Thursday’s soybean sales cancellations to China and unknown destinations didn’t help current trade issues as sales were weak for all the grains.
For the week, Friday October 12th to Friday October 19th, December Corn -$.06 ¾, March -$.06 ¼, November Soybeans -$.10 ¾, January -$.11 ¼, December KC Wheat -$.08, March -$.07 ½, December Chicago Wheat -$.02 ½, March -$.03 ¼, December MPLS Wheat -$.08 ¼, December Soybean Meal -$3.80/T.
Grains were mixed overnight with corn and soybeans mostly higher while wheat traded lower. Corn and soybeans both finished steady to 1 higher while wheat finished 2 to 4 lower.
No export sales announced by USDA this morning. Algeria is in for a cargo of milling wheat for December; the trade likely goes to France. Syria picked up 200,000 MT or 7.3 MBU of Russian wheat at $255/MT which is up $30.50/MT from the last trade roughly one month ago.
Brazil forecasted to receive some rain which could slow the planting pace, but the soybean crop to date going in well. AgRural reported that 34% of the soybeans are planted nationwide, up 14% on the week and 14% ahead of last year. Plantings in Mato Grosso have reached 62% complete vs 27% last year. Accelerated plantings likely bode well for second season corn crops.
Some light rain expected during the week but nothing heavy except in the South and East Coast. The latest 6-10 day outlook still showing above normal moisture in the Northern Plains, Eastern Corn Belt and East Coast with below normal in the Southwest. Temps are still below normal east and above normal west.
December corn up to $3.78 ½ last week but now on a lower trend with support at $3.60. November soybeans reaching $8.92 last week still holding a higher trend since the contract low at $8.12 ¼ over a month ago, nearby support at $8.50. December KC wheat mostly sideways with a slight uptrend over this past month, support at $5.10 and resistance from $5.33 to $5.35. December Chicago wheat looks similar on the charts with support at $5.05 and resistance from $5.27 to $5.31. December soybean meal breaking below the trend line with support next at $3.10 and resistance up at $327.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700