Date: January 7th, 2019
Packers paid $123 live and $195 dressed on Thursday jumping forward to avoid a Friday standoff. Packer margins have declined some recently but still remain in the black. Not all sellers were willing to accept steady money and left offers firmly at $125. This did not bode well Friday with futures tanking and packers pull bids back. Trade in the North Friday was at $122 to $122.50 live but still held at $195 dressed.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 01/04/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 79,300 23,200 7,400 109,900
2 Wks Ago 183,800 16,900 4,000 204,700
Last Year 116,000 21,400 5,600 143,000
Compared to two weeks ago, steers under 700 pounds were mostly 1.00-4.00 higher, instances up to 9.00 higher in Nebraska; steers over 700 pounds moved at price points that were steady to 4.00 lower. The Southeastern region saw sharply higher prices on all classes, due to good demand and very light receipts. Muddy pen conditions as temperatures increased in the North and rain and snow in the South have caused concerns, especially on the placements of heavier weight cattle. This week’s receipts across the country were hindered for several reasons. Not all markets were operational this week, due to the holiday interruptions early week; heavy rains throughout the Southeast and winter storms on much of the North Central and South Center regions.
For the week, Friday December 28th to Friday January 4th, February Live Cattle -$2.25, April -$2.40, January Feeder Cattle -$4.17, March -$4.05, February Lean Hogs +$1.30, April +$.25.
Cattle slaughter from Friday estimated at 119,000 head, up 4,000 from the previous week and steady compared to a year ago. For the week 520,000 head, up 82,000 from the previous week but down 25,000 from last year.
Hog slaughter from Friday estimated at 477,000 head, up 10,000 from the previous week and up 28,000 compared to a year ago. For the week 2,262,000 head, up 378,000 from the previous week and up 140,000 compared to last year.
Boxed beef cutout values lower on light to moderate demand and heavy offerings for a total of 116 loads sold.
Choice Cutout__214.51 -1.98
Select Cutout__207.66 -1.72
CME Feeder Index:__145.60 -.46
CME Lean Hog Index.__53.63 +.38
Pork Carcass Cutout__69.70 -.20
IA-S.MN Wtd Avg Carcass Base__49.26 +.55
National Wtd Avg Carcass Base__48.22 +.79
February live cattle hit a new contract high at $124.95 last Monday but then reversed lower for a bearish close. The uptrend from mid-November was taken out last Friday with the next line of support at $121. January feeders also with a key reversal lower after hitting a new recent high at $149.85, still unable to take out the $150 resistance. The higher trend also taken out last week with support next at the recent low at $143.30 then the low from November at $142.67. February lean hogs held support at $60.20 after losing over $8 in December. Support is at $61.20 with resistance at $63.40.
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The wheat complex made it three consecutive higher closes to start the New Year and now has both technical and fundamental support behind it. The fundamental support though is hard to prove with the government still shutdown and no export sales confirmed just rumored. The corn market also made it three days in row with a higher close although the least amount gained for the week. The soybean market continued higher as it has all week supported by South American weather and potential for additional Chinese demand.
Friday’s meeting at the White House failed to resolve the government shutdown. USDA announced on Friday that given the lead time required for the analysis and compilation of Crop Production, Crop Production-Annual, World Agricultural Supply and Demand Estimates (WASDE), Grain Stocks, Rice Stocks, Winter Wheat and Canola Seedings, and Cotton Ginnings reports, those reports will not be released on January 11, 2019 as originally scheduled even if funding is restored before that date. The date of all NASS and OCE-WAOB releases will be determined and made public once funding has been restored.
For the week, Friday December 28th to Friday January 4th, March Corn +$.07 ½, New Crop December 2019 +$.06 ½, March Soybeans +$.26, New Crop November +$.21 ¼, March KC Wheat +$.10, New Crop July +$.08 ¼, March Chicago Wheat +$.05 ½, New Crop July +$.03 ¼, March MPLS Wheat +$.19 ¾, March Soybean Meal +$6.00/T.
Overnight grains were mixed with corn finishing steady, soybeans into new recent highs and finishing 5 higher while wheat was steady to 1 lower.
The US trade delegation is in Beijing for the next round of trade talks scheduled for today and tomorrow. The markets anticipate China and US may take additional steps towards normalizing trade. The soy complex is hoping for some additional purchases by China, and in the long run signs that tariffs will be lifted. The U.S. is seeking breakthroughs in other key areas such as intellectual property theft.
Heavy precip continues on the West Coast this week. The latest 6 to 10 day outlook showing above normal temperatures for all expected the East Coast with below normal precip for the Northern Plains and Northeast and above normal on the West Coast and Texas through Minnesota.
March corn rangebound over the past 3+ months from $3.67 to $3.90 with nearby support at $3.72 and the next resistance at $3.86. March soybeans still holding the long term higher trend from this fall with support at $8.80. The next line of resistance at $9.41 (December high and July high). March KC wheat still holding a long term lower trend with support at contract low at $4.82 ¼ and resistance up at $5.24 ½. March Chicago wheat hitting a new recent low last week at $5.01 ¼, contract low down at $4.82 ¼ and resistance up at $5.38 ½. March soybean meal trending higher the past week breaking the nearby resistance with the next up near $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