Date: January 23rd, 2019
Strong pressure and sharp losses in cattle futures yesterday as hogs were mixed. Beef prices were still higher yesterday but there are concerns building about long term summer and fall beef demand. There was also a 1,000 head sale yesterday in KS at $122 live, $2 lower than last week that sent a shockwave through the cattle markets. There was also some light movement in NE at $123 live and $196 dressed, $1 to $2 lower. Showlists do appear to be larger this week as cash trade volume was light a week ago.
Oklahoma National Stockyards – Oklahoma City, OK
Livestock Weighted Average Report for 1/21/2019
Receipts Week Ago Year Ago
4,489 9,166 9,868
Compared to last week: Feeder steers and heifers mostly 2.00-6.00 lower with exception to 600-650 lb. steers bringing 1.00 higher. Steer calves steady to 6.00 higher. Heifer calves 500-600 lbs. 3.00-5.00 lower, lighter weights steady to 2.00 higher on a lighter test. Demand moderate to good, especially good on long weaned steer calves. Quality plain to average with a few handfuls of long weaned attractive calves and feeders.
Tulsa Livestock Auction – Tulsa, OK
Feeder Cattle Weighted Average Report for 01/21/2019
Receipts: 1081 Last Week: 1296 Year Ago: 2796
Compared to last week: Steers and Heifers 5.00-7.00 lower, in a light test. Demand good. Quality average, few attractive.
Joplin Regional Stockyards – Carthage, MO
Livestock Weighted Average Report for 1/21/2019
Receipts Week Ago Year Ago
2,920 6,810 8,927
Compared to last week, steers unevenly steady, heifers under 550 lbs steady to 3.00 higher, over 550 lbs steady. Demand moderate to good, supply light.
OKC West Livestock Market – El Reno, OK
Livestock Weighted Average Report for 1/22/2019
Receipts Week Ago Year Ago
2,000 14,082 13,439
*** Final report will be released 01-23-19 ***
Compared to last Tuesday: Steer and heifer calves sold steady to 2.00 higher on limited comparable offerings. Demand good to very good especially for lighter weight weaned steer calves.
Winter Livestock Inc – La Junta, CO
Feeder Cattle Weighted Average Report for 01/22/2019
Receipts: 3062 Last Week: 6846 Year Ago: 3622
Compared with last Tuesday: Steer calves uneven, under 500 lbs steady to 2.00 higher, 500 to 700 lbs 1.00 to 3.00 lower. Heifer calves under 700 lbs steady to 2.00 higher instances 5.00 to 8.00 higher on 400 to 500 lbs. Yearling feeder steers over 700 lbs steady to 2.00 lower decline on 800 to 900 lbs. Yearling feeder heifers 700 to 750 lbs 2.00 lower. Slaughter cows steady to 2.00 higher.
Cattle slaughter from Tuesday estimated at 118,000 head, down 2,000 from last week but up 8,000 compared to a year ago. Hog slaughter from Tuesday estimated at 475,000 head, down 5,000 from a week ago but up 22,000 compared to a year ago.
Boxed beef cutout values higher on moderate to fairly good demand and light offerings for a total of 94 loads sold.
Choice Cutout__216.34 +1.08
Select Cutout__211.72 +.86
CME Feeder Index:__141.62 -.09
CME Lean Hog Index.__58.33 +.26
Pork Carcass Cutout__69.63 -1.20
IA-S.MN Wtd Avg Carcass Base__52.64 +.09
National Wtd Avg Carcass Base__52.20 -.15
February live cattle hit a new contract high at $127.95 last week and has been trending higher since mid-November. We did gap lower though yesterday and tested the trendline support with the next price support line down at $123 with resistance up near $130 from the weekly charts and going back to last February. January feeders breaking lower last week, through support levels and down into a new 7-month low. The next level of support is down at $140 then around $136 with resistance still at the $150 level. February lean hogs also broke through support levels last week to test the next near $59 with resistance up at $64.
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South American weather still a concern with early soybean harvest in Brazil amid hot and dry weather and disappointing yields and still excessive rain and potential for more in the nearby forecasts for Argentina. Export inspections yesterday morning were at or above expectations for the week ending January 17th. Corn shipments totaled 43.6 MBU and soybeans 40.8 MBU with 15.3 MBU going to mainland China. Wheat shipments totaled 19 MBU and grain sorghum 2.6 MBU.
All of this positive news was overshadowed but negative headlines on the Chinese trade talks though. Mid-morning it was reported that the White House rejected an offer by two Chinese vice-ministers to travel to the U.S. this week ahead of the scheduled higher level meetings at the end of the month. This along with continued concerns of world economic growth sent all markets crashing lower. Corn and soybeans recovered some with KC and Chicago wheat held small gains.
Overnight grains were back steady to higher on a small recovery bounce. Corn finished 2 higher, soybeans 3 higher and wheat 3 to 5 higher.
News overnight again light. USDA has announced all FSA office will re-open soon even if the shutdown continues and the MFP deadline has now been extended to February 14th. The U.S. Senate will be voting on two measures today, one to fund the President’s border wall initiative, the other to restart US gov’t operations until Feb 8th, but does not include wall funding
Chinese December imports plunge with zero grain sorghum compared to 6.3 MBU last December. Imports for 2018 totaled 143.7 MBU, down 27.8% compared to 2017. Barley imports for December were down 75% compared to last year while pork imports were up slightly from a month ago but down 14.4% compared to last December. Wheat imports were down 14% for the month and nearly 30% for the year.
Mixed precipitation moves east for the balance of the week as temperatures remain well below normal. The latest 6 to 10 day outlook showing below normal precipitation in the South and along the West Coast with above normal in the North and temperatures still below normal for all areas except on the West Coast.
March corn rangebound over the past 4 months from $3.67 to $3.90 with nearby support at $3.71 and resistance at $3.84 ½. March soybeans still holding the long term higher trend from this fall with support at $8.90 and resistance at $9.27 then $9.41. March KC wheat trying to break the long term lower trend with support at contract low at $4.82 ¼ from November and a small higher trend since, resistance up at $5.24 ½. March Chicago wheat holding a more sideways pattern with support at $5.01 and pressing resistance up near $5.26 then $5.38 ½. March soybean meal stuck in $24 range since mid-August with nearby support at $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