Date: January 16th, 2019
New highs for nearby fat cattle futures while feeders and hogs continue to tread water with small gains yesterday after Monday’s sharply lower moves. Showlists appear to be larger this week but packers still need inventory or will have to slow down the chains. Winter weather is taking a toll on big chunk of the feeders in the South and could provide enough pressure this week on cattle owners to push inventory out sooner rather than holding in hopes for higher money again later in the week.
Chinese Ag Ministry data for December shows the country’s pig herd off -4.8% from the year ago month, while the sow herd was down -8.3% in December 2018 versus Dec 2017. For three consecutive months the herd sized has dropped 5%. They also reported that 916,000 pigs have been culled so far since the first outbreak of African swine fever this past August. This sounds like a large number but not in comparison to the nearly 700 million head total herd size. There are some estimating that a reduction of 20% could take place though still in 2019.
Oklahoma National Stockyards – Oklahoma City, OK
Livestock Weighted Average Report for 1/14/2019
Receipts Week Ago Year Ago
9,166 10,558 8,292
Compared to last week: Feeder steers 2.00-6.00 lower. Feeder heifers steady to 3.00 higher with exception to 650-750 lbs steady to 3.00 lower. Steer calves unevenly steady. 500-600 lb. heifer calves 1.00-6.00 lower, lighter weights not well tested.
Joplin Regional Stockyards – Carthage, MO
Livestock Weighted Average Report for 1/14/2019
Receipts Last Reported Year Ago
6,810 2,322
Compared to last week, steers and heifers under 600 lbs steady, over 600 lbs 2.00 to 5.00 lower. Demand moderate, supply moderate to heavy. The wet conditions and mud has been a problem, and the recent rain, snow and ice has added to the difficulty of taking care of cattle.
Tulsa Livestock Auction – Tulsa, OK
Feeder Cattle Weighted Average Report for 01/14/2019
Receipts: 1296 Last Week: 2372 Year Ago: 1566
Compared to last week: Following a week of cold and damp weather that kept testing light and receipts lower. A stronger undertone is noted on light weight steers. Feeder steers 3.00-5.00 lower. Heifers 4.00-6.00 lower, also in a light test.
Winter Livestock Inc – La Junta, CO
Feeder Cattle Weighted Average Report for 01/15/2019
Receipts: 6846 Last Week: 4252 Year Ago: 7585
Compared with last Tuesday: Steer calves under 650 lbs steady to 5.00 lower decline on 450-550 lbs, 650-700 lbs 2.00 to 3.00 lower. Heifer calves under 600 lbs 3.00 to 5.00 lower, 600 to 700 lbs 5.00 to 8.00 lower. Yearling feeder steers 700 to 800 lbs 1.00 to 3.00 lower, over 800 lbs 3.00 to 5.00 lower. Yearling feeder heifers 1.00 to 3.00 lower.
Cattle slaughter from Tuesday estimated at 120,000 head, up 1,000 from last week and up 3,000 compared to a year ago. Hog slaughter from Tuesday estimated at 480,000 head, up 6,000 from a week ago and up 25,000 compared to a year ago.
Boxed beef cutout values steady to firm on moderate to fairly good demand and heavy offerings for a total of 173 loads sold.
Choice Cutout__212.21 +.19
Select Cutout__205.87 +.41
CME Feeder Index:__144.44 -.21
CME Lean Hog Index.__57.65 +.44
Pork Carcass Cutout__70.33 -.86
IA-S.MN Wtd Avg Carcass Base__51.69 -.48
National Wtd Avg Carcass Base__51.46 -.29
February live cattle with another new contract high yesterday at $127.10. Support is down around $125 then $123 with resistance next up near $130 from the weekly charts and going back to last February. January feeders dipped to a new recent low and still choppy in a range from $142.67 up to $150 over these past couple months. February lean hogs trending higher since holding support at $60.20 after losing over $8 in December. Nearby support at $61.40 with resistance up near $64.
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Over in the grains, we started the day mixed and most hoped for a Turnaround Tuesday higher. Soybeans broke first through nearby support levels then corn took a run and tested but held nearby support at the close. NOPA crush report was positive yesterday with 171.76 MBU crushed domestically in December (a new record for December) vs. expectations at 170 MBU and November down at 166.95 MBU. Soyoil stocks lower than expected also at 1.498 billion lbs but it was a slight build in inventory for the first time in 8 months. Soymeal exports lower than expected at 826,404 tons. Grain export inspections for last week reported on Monday were above expectations. Comments that the trade talks with China were not progressing as well as hoped pressured the grains yesterday. Brazil soybean harvest continues with hot and dry weather and overall disappointing early yields. Argentina still seeing excessive rains but prospects for better weather in the nearby forecast.
Overnight grains were steady to higher on a small recovery bounce. Basis levels in general continue to firm for corn while soybean basis levels are flat to weaker for both the export market and processors.
South Korea purchased a total of 260,000 MT or 10.2 MBU of optional origin corn overnight and 65,000 MT or 2.4 MBU of optional origin feed wheat.
Another winter storm heading in later this week and into the weekend with much below normal temps forecasted from ND down to TX, heavy snow expected in the upper Midwest with heavy rains for the Southeast. The latest 6 to 10 day outlook showing below normal temperatures except on the West Coast and above normal precip for all except on the West Coast and portions of the Southern Plains.
March corn rangebound over the past 4 months from $3.67 to $3.90 hitting a new recent low at $3.71 yesterday with nearby resistance at $3.84 ½. March soybeans still holding the long term higher trend from this fall with support at $8.80 and resistance at $9.27 then $9.41. March KC wheat still holding a long term lower trend with support at contract low at $4.82 ¼ and resistance up at $5.11 and $5.24 ½. March Chicago wheat also trending lower but more sideways recently with support at $5.01 and resistance up at $5.24 ½ then $5.38 ½. March soybean meal stuck in $24 range since mid-August with nearby support at $309 then $307 and resistance at $324.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700