Date: October 29th, 2018
All livestock futures finished higher last Friday jolted by higher cash feedlot trade. KS traded at $111 live for 6 weeks straight, but finally popped to $114 to $115 this week. A year ago, this same week we jumped from $111 to $117 to $119. TX jumped $4 higher to mostly $115 live as well with trade in the North at $114 to $115 live and $6 higher at $180 dressed.
USDA reported YTD Cattle Slaughter through September is 2.6% above last year and 8.6% above the previous 3-year average. YTD steer and heifer slaughter is 1.2% below and 7.6% above last year respectively. Also, YTD Beef cow slaughter is 10.7% above a year ago and 22.8% above the previous 3-year-average.
Monday’s cold storage report listed total pounds of red meat in freezers up 1% from last month and down 1% from last year. Total pounds of beef in freezers were up 1% from last month at 508.6 million pounds and up 3% from last year. Frozen pork supplies were up 1% from last month at 588.9 million pounds and down 5% from last year. Total pounds of chicken came in at 959.4 million pounds, up 17.3% from last year.
For the week, Friday October 19th to Friday October 26th, October Live Cattle +$1.62, December +$1.62, November Feeder Cattle +$.70, January +$.95, December Lean Hogs +$6.32, February +$7.35. Boxed Beef, Choice +$5.54 @ $213.47, Select +$4.59 @ $198.83.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 10/26/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 357,700 57,600 16,500 431,800
Last Week 270,300 25,400 27,700 323,400
Last Year 309,800 37,900 9,900 357,600
Compared to last week, steer and heifers sold uneven; 2.00 lower to 2.00 higher. Auction receipts this week are the largest since January 12, 2018 and the nation has a very small percentage of the true yearlings left to move in the market place. Several auctions in South Dakota had two sales this week to accommodate producers willing to sell cattle and the state accounts for over 18 percent of the auction receipts.
Cattle slaughter from Friday is estimated at 107,000 head, down 8,000 from the week previous but up 1,000 from last year. For the week, 633,000 head, up 8,000 from the week previous and compared to a year ago. Beef production at 524.8 million pounds last week compared to 517.9 the week previous and 518.0 last year.
Hog slaughter from Friday is estimated at 472,000 head, up 8,000 from week previous and up 16,000 from last year. For the week, 2,569,000 head, down 20,000 from the week previous but up 54,000 compared to a year ago.
Boxed beef cutout values firm on moderate to fairly good demand and light offerings for a total of only 73 loads sold.
Choice Cutout__213.47 +.37
Select Cutout__198.83 +.52
CME Feeder Index:__154.01 +.36
CME Lean Hog Index.__64.61 -.42
Pork Carcass Cutout__77.54 -.32
IA-S.MN Wtd Avg Live__ 45.80 no comparison, Wtd Avg Carcass Base__57.93 +.58
National Wtd Avg Live__ 45.70 +.81, Wtd Avg Carcass Base__57.06 +.04
October live cattle still the front month for a couple more days but most of the volume had already moved to the December contract. December support holding at $116 with a higher trend now in place over these past couple weeks. Friday’s move was a key reversal higher, lower low and higher high than the previous day while finishing higher. The next resistance is the contact high from October 1st at $119.75. November feeders now the front month with a lower trend in place since the first of the month. It also had a key reversal higher on Friday with support $152.87 and resistance up at $157. January looks similar, but no key reversal higher on Friday with support at $148 and resistance at $152. December lean hogs recovered last week pressing nearby price resistance from $58 to $60.
******************************************************************************************************************
Cargill took a good shot, offering SRW to Egypt, and initial reports indicated Egypt passed. They did end up purchasing 350,000 MT or 12.86 MBU from Russia, 60,000 MT or 2.2 MBU from both Ukraine and the U.S.
Australia announced a further reduction in their crop down to 16.6 MMT while Turkey reduced their crop a million tons and the EU lowered their wheat production to 127.4 excluding spring wheat production.
The Chinese government put out guidelines to lower the protein content in hog feed. China’s Feed industry association on Friday approved new standards lowering protein levels in hog feed by 1.5% and lowering chicken feed protein levels by 1%. The new standards are not enforceable, so some question whether there will be any impact from the guidelines. Rationing has already been in place with high domestic prices. China’s Ag Ministry said the new standards will curb soybean consumption by 14 MMT or 514 MBU and soymeal consumption by 11 MMT.
For the week, Friday October 19th to Friday October 26th, December Corn +$.00 ¾, March +$.00 ½, November Soybeans -$.11 ¾, January -$.12 ¾, December KC Wheat -$.16, March -$.14, December Chicago Wheat -$.09 ½, March -$.10, December MPLS Wheat -$.10, December Soybean Meal -$5.80/T.
Grains were higher overnight with corn finishing steady to 1 higher, soybeans 4 higher and wheat 1 to 4 higher.
USDA reported a private sale of 120,000 MT or 4.4 MBU of soybeans sold for unknown destinations.
It should be a dry week here in the Plains but some additional moisture expected in the Corn Belt with the heaviest in the Ohio River Valley. The latest 6-10 day outlook showing above normal moisture in the Northern Plains and Corn Belt with below normal in the Southwest. Temps are below normal here in the central U.S. with above normal on both coasts.
December corn breaking the higher trend last week that was in place from mid-September, but with a close higher today the charts still look positive. Support is still at $3.60 with resistance up at $3.78 ½. November soybeans with first notice day on Wednesday, remember to get those positions rolled or exited this week, support at $8.40 with resistance up at $8.60 and then $8.90. December KC wheat breaking into new recent lows last week at $4.85 ¼, resistance next at $5.15 then around $5.30. December Chicago wheat looks similar on the charts with last week’s new recent low at $4.85 ½ and resistance from $5.27 to $5.31. December soybean meal still trending lower but unable to take out support from $303 to $300 with 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