Date: November 23rd, 2018
Most salebarn reports so far this week reported higher undertones. Cash feedlot trade Tuesday & Wednesday at $116 to $117 in TX, $2 to $3 higher than last week, IA saw some trade at $113 to $115 live, call that $1 lower to $1 higher and light trade in NE at $116 live and $180 dressed, $2 to $4 higher. Wednesday midday, USDA released a friendly Cattle on Feed report along with a mixed Cold Storage report.
November 2018 Cattle on Feed
USDA Actual Avg Guess
Cattle on Feed Nov 1 at 11.7 million head 103% 104.4%
October Placements totaled 2.25 million 94% 99.8%
October Marketings totaled 1.89 million 105% 103.8%
On Feed numbers by state: (current vs previous year Nov 1) CO 104%, IA 101%, KS 103%, NE 103%, TX 102%
Placements by weight class (expressed as % of previous year)
640,000 head Under 600 lb, 95% vs. last year
525, head 600-699 lb, 89%
450,000 head 700-799 lb, 88%
363,000 head 800-899 lb, 98.6%
180,000 head 900-999 lb, 112.5%
90,000 head Over 1000 lb, 100%
Placements in October by state: (current vs previous year) CO 100%, IA 75%, KS 94%, NE 96%, TX 92%
Cold Storage October 2018
Total red meat supplies at 1.135 billion pounds were down 1% from the previous month and down 1% from last year. Total pounds of beef at 515.4 million pounds were up 2% from the previous month and up 2% from last year. Frozen pork supplies at 570.5 million pounds were down 3% from the previous month and down 5% from last year. Stocks of pork bellies at 26.7 million pounds were down 12% from last month and down 17% from last year.
Total frozen poultry supplies on October 31, 2018 at 1.391 billion pounds were down 9% from the previous month but up 4% from a year ago. Total stocks of chicken at 942.9 million pounds were down 2% from the previous month but up 8% from last year. Total pounds of turkey 444 .6 million pounds in freezers were down 21% from last month and down 4% from October 31, 2017.
• Record Highs this month for Chicken Breasts, Drumsticks Total Chicken, Pork Ribs, Total other Red Meat
Livestock Slaughter October 2018
All-Time Record High for Red Meat and Pork Production
October 2018 contained 1 more weekday compared to 2017
Commercial red meat production for the United States totaled 4.90 billion pounds in October, up 6 % from the 4.64 billion pounds produced in October 2017. January to October 2018 commercial red meat production was 44.4 billion pounds, up 3 % from 2017.
Beef production, at 2.43 billion pounds, was 5 % above the previous year. Cattle slaughter totaled 2.96 million head, up 6 % from October 2017. The average live weight was up 2 pounds from the previous year, at 1,363 pounds. The average live weight January through October down 3 pounds vs. the 2017 at 1,346 pounds with accumulated beef production up 3% from last year.
Pork production totaled 2.45 billion pounds, up 6 % from the previous year. Hog slaughter totaled 11.6 million head, up 6 % from October 2017. The average live weight was unchanged from the previous year, at 283 pounds. The average live weight January through October up 1 pound vs. the 2017 at 283 pounds with accumulated pork production up 3% from last year.
Cattle slaughter for Wednesday estimated at 118,000 head, matching last week but down 3,000 compared to last year. Hog slaughter for Wednesday estimated at 478,000 head, also matching last week and up 19,000 compared to a year ago.
Boxed beef cutout values steady to weak on light to moderate demand and moderate offerings for a total of 175 loads sold.
Choice Cutout__213.69 -.40
Select Cutout__198.26 -.17
CME Feeder Index:__147.81 +.41
CME Lean Hog Index.__58.02 -.21
Pork Carcass Cutout__66.97 +1.25
IA-S.MN Wtd Avg Live__N/A, Wtd Avg Carcass Base__50.33 -1.11
National Wtd Avg Live__40.22 -.59, Wtd Avg Carcass Base__50.76 -.51
China’s ag ministry confirmed another case of African swine fever in the Inner Mongolia region along with 2 case in the Beijing region. These are the first in the Chinese capital and brings their total to well over 70 cases confirmed since early August.
US Export Sales for the week ending November 15th…
Beef: Net sales bearish & exports flat to bearish. Net sales of 12,300 MT reported for 2018 were down 9% from the previous week and 24% from the prior 4-week average. Increases were reported for South Korea (4,100 MT, including decreases of 400 MT), Japan (3,100 MT, including decreases of 300 MT), Mexico (1,700 MT, including decreases of 200 MT), Canada (1,200 MT, including decreases of 200 MT), and Hong Kong (1,000 MT, including decreases of 400 MT). Reductions were reported for Vietnam (100 MT). For 2019, net sales of 4,100 MT were primarily for Japan (1,700 MT), Taiwan (1,000 MT), and Hong Kong (900 MT). Exports of 16,500 MT were down 3% from the previous week and 1% from the prior 4-week average. The primary destinations were Japan (5,300 MT), South Korea (3,600 MT), Hong Kong (2,100 MT), Mexico (1,900 MT), and Taiwan (1,100 MT).
Pork: Net sales bearish but exports bullish. Net sales of 14,600 MT reported for 2018 were down 29% from the previous week and 19% from the prior 4-week average. Increases were reported for Mexico (4,400 MT), Japan (2,300 MT), South Korea (2,200 MT), Canada (1,400 MT), and Hong Kong (1,300 MT). For 2019, net sales of 3,700 MT were reported for South Korea 2,100 MT), Australia (800 MT), and Mexico (200 MT). Exports of 27,100 MT–a marketing-year high–were up 2% from the previous week and 7% from the prior 4-week average. The primary destinations were Mexico (9,900 MT), South Korea (5,600 MT), Japan (3,800 MT), Canada (2,100 MT), and Colombia (1,500 MT).
December live cattle and cash now back in line with with support at $115.30 then around $114 and resistance up near $117. January feeders breaking the nearby lower trend with support at $145.50 and resistance now up near $151. December lean hogs with a new recent high on Monday at $61.42 with the next resistance area from $62 to $62.90 and support from $57.30 to $56.60.
****************************************************************************************************************************************************
Over in the grains, trade was mixed with some decent volume seen actually. Not much changed though with corn still holding support, wheat into new lows and soybeans remain stuck in a wait and see mode due to the potential for a breakthrough in trade negotiations with China at the G-20 summit in Argentina later this month.
The weekly EIA energy report leaned friendly for ethanol with the expected production decline, along with a larger-than-expected draw on inventory. Production dipped -2.4% wk/wk to a 1.042 mil bbl/day rate; carried forward, such a grind would consume 5.5 BBU of corn per year (slightly below current USDA estimates). The 3% wk/wk inventory draw popped the ethanol market higher.
No overnight markets, so the first breaking news to discuss is the Egyptian wheat purchase yesterday. They posted a tender for 55,000 MT or 2 MBU after the close Wednesday and ending up buying 240,000 MT or 8.8 MBU split evening between Russia, Romania and finally the U.S. Delivered values still show Russian wheat over $3/MT discount to U.S. but we did come in cheaper than the Romanians. Egypt purchased 60,000 MT or 2.2 MBU from both Russian and Romania while doubling that a buying 120,000 MT or 4.4 MBU
Next is the export sales reported for the week ending November 15th. All were in line with expectations, but near the bottom the range for all except corn.
Wheat: Net sales of 330,400 metric tons for 2018/2019 were down 25% from the previous week and 38% from the prior 4-week average. Increases were reported for Mexico (112,700 MT, including decreases of 700 MT), Indonesia (70,400 MT, including decreases of 100 MT), Philippines (57,600 MT), Bangladesh (53,000 MT, including 55,000 MT switched from Malaysia and decreases of 2,000 MT), and Honduras (28,600 MT).Reductions were reported for Malaysia (55,000 MT) and the United Kingdom (1,400 MT).
Corn: Net sales of 877,400 MT for 2018/2019 were down 2% from the previous week, but up 50% from the prior 4-week average. Increases were reported for Mexico (375,900 MT, including decreases of 50,300 MT), Japan (329,100 MT, including 60,200 MT switched from unknown destinations and decreases of 60,600 MT), Peru (133,600 MT, including 50,000 MT switched from unknown destinations), Colombia (58,800 MT, including 33,300 MT switched from unknown destinations), and Cuba (58,000 MT). Reductions were primarily for unknown destinations (181,000 MT), South Korea (64,700 MT), and Jamaica (2,700 MT). For 2019/2020, total net sales were reported for Mexico (5,000 MT).
Sorghum: Net sales of 37,200 MT for 2018/2019 resulting in increases for Spain (49,800 MT, including 55,000 MT switched from unknown destinations and decreases of 5,200 MT), Mexico (22,400 MT) and Japan (20,000 MT), were partially offset by reductions for unknown destinations (55,000 MT).
Soybeans: Net sales of 680,500 MT for 2018/2019 were up noticeably from the previous week and from the prior 4-week average. Increases were reported for Germany (191,700 MT), Taiwan (119,800 MT, including decreases of 100 MT), Bangladesh (112,500 MT, including 55,000 MT switched from unknown destinations), Thailand (80,400 MT, including 70,000 MT switched from unknown destinations), and Japan (74,600 MT, including 27,000 MT switched from unknown destinations and decreases of 1,600 MT). Reductions were reported for unknown destinations (290,200 MT) and China (66,000 MT). For 2019/2020, total net sales were reported for Japan (3,900 MT).
USDA announced a private sale of 120,000 MT or 4.4 MBU of soybeans for delivery to unknown destinations and 132,000 MT or 5.2 MBU of corn sold to South Korea. South Korea also purchased between 55,000 and 70,000 MT or 2.2 to 2.7 MBU of optional origin corn.
Markets do close early today, 12:05 for the grains and 12:15 for livestock futures.
South American conditions are broadly favorable; Brazil is nearly complete with first crop planting, while Argentina could take a while, given low overall progress and the prospect of replanting in some areas.
Heavy precip expected in the PNW over this next week with a winter storm moving through the KS and into the Corn Belt this weekend. The latest 6-10 day outlook showing above normal moisture for then entire U.S. except in the Northeast and temps above normal west and south with below normal for the eastern half of the U.S.
December corn trading sideways recently with about a 20 cent range, support at $3.60 and resistance up at $3.79. January soybeans also rangebound this month but holding a higher trend since the $8.26 ¼ low in September. Support holding so far at $8.70 with resistance up at $9 and $9.06. December KC wheat with a new low at $4.68 and a market getting very oversold, resistance up at $5.10. December Chicago wheat holding the $4.95 support and resistance at $5.21. December soybean meal with support from $304 to $303 with resistance up at $313 to $314.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700