Date: January 28th, 2019
Cash feedlot trade last week at $122-$123 live, $197 dressed NE, steady with a week ago, $122-$123 live in KS and mostly $123 live in TX, steady to $2 lower than the week previous. Chainspeeds reduced again, down another 10K head compared to last week and some 30K+ head lower than a month ago yet beef prices still firm and $2 to $3 higher than the week previous.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 01/25/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 186,800 35,500 32,100 254,400
Last Week 267,700 63,600 3,800 334,800
Last Year 283,400 83,800 20,200 387,400
Compared to last week, steers and heifers were uneven; with early week sales quoted steady to 5.00 lower and mid to late week sales reportedly steady to 5.00 higher. Those early week sales all had a downward trend that was spillover from the previous week followed by lower futures on Tuesday. Buyer interest had waned early week due to the winter weather that came in over the weekend. Between mud, snow, ice, or a mixture of all the above transporting cattle has proven to be difficult and sales either cancelled or continued on with lighter receipts. Some feedyards are content to wait for pens to harden and dry up a bit before receiving more cattle. Producers and feedyards are finding it difficult to feed enough mega calories maintenance in the harsh conditions, let alone trying to increase weight. A Feeder Cattle futures rally on Wednesday was a welcome sight for auctions as buyer interest picked up and prices advanced as well. The calf market finally improved in Oklahoma as heavy moisture this month (OK seems to be 300% of normal for January) will provide for some nice pasture after warm up. Spring stocker orders there are starting now and will continue through mid-April. Larger runs are expected next week provided that harsh winter temperatures don’t make it again difficult for transporting stock.
For the week, Friday January 18th to Friday January 25th, February Live Cattle -$.47, April -$.52, January Feeder Cattle +$1.92, March +$.80, February Lean Hogs -$2.85, April -$4.15. Boxed Beef, Choice +$3.86 @ $217.01, Select +$2.58 @ $212.03.
Cattle slaughter from Friday estimated at 116,000 head, matching the previous Friday and up 4,000 compared to a year ago. For the week, 610,000 head, down 10,000 from the week previous but up 16,000 from a year ago. Beef production estimated at 507.0 million pounds compared to 515.1 million the week prior and 490.4 million pounds last year. Hog slaughter from Friday estimated at 473,000 head, up 13,000 from a week ago and up 15,000 compared to a year ago. For the week, 2,501,000 head, down 2,000 from the week previous but up 138,000 from last year. Pork production estimated at 533.7 million pounds compared to 534.2 the week previous and 505.1 million pounds last year.
Boxed beef cutout values weak on Choice and steady on Select on light to moderate demand and offerings for a total of 97 loads sold.
Choice Cutout__217.01 -.74
Select Cutout__212.03 -.11
CME Feeder Index__143.21 +.97
CME Lean Hog Index__58.50 unchanged
Pork Carcass Cutout__67.67 +.40
IA-S.MN Wtd Avg Carcass Base__50.48 -1.13
National Wtd Avg Carcass Base__51.32 -.15
South Korean Ag Ministry Monday reported dairy cow farm has been confirmed to have first case of foot-and-mouth disease since the last case in March 2018. The ministry said the cows at the farm will be culled, and issue temporary transportation ban to contain the spread.
February live cattle pulling back to the test the higher trend line in place since mid-November. The contract high set last week is up at $127.95 with the next area of resistance up near $130 from the weekly charts and going back to last February. January feeders expire later this week and are already in line with the index. March has been choppy from $140 to $147.50 over these past couple months, still carrying a long term lower trend since setting the contract high at $155.50 back on October 2nd. February lean hogs gapped lower on Friday and into a new 5-month low with support next around $52 and resistance up at $62.
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Soybeans, firm all day, surged late to finish strong, pulling corn along for the ride. South American weather, China optimism and news of the temporary government reopening led to the rise on Friday. It will be good to see when export sales, the CFTC Commitment of Trader’s reports and USDA crop reports will be updated and released. As of late Friday, USDA chief economist stated that January data will be updated along with the February crop report set for Friday, February 8th. There will be a ton of new data thrown at the markets over these next couple weeks so hold on tight, I wouldn’t expect the same lethargic trading that we have seen over this past month.
After 35 days, a deal has been reached to re-open the government until February 15th so congressional leaders could hammer out some agreement over border security funding. If no agreement can be reached on border security funding either the government will shut down again or the President will declare a national emergency in order to secure the proper funding after the three-weeks are up which would keep the government open and advance the President’s border security plan.
On Thursday, Farm Futures put together a table of projected plantings for this coming year. The survey was from 626 farmers. After putting the data together, it estimates all winter wheat acreage at 31.6 mil, which is very similar to Informa’s estimate of 31.51 mil. The breakdown had HRW wheat acres at 22.8 mil vs 22.2 mil from Informa, SRW wheat acres at 5.6 mil vs 5.9 mil from Informa and White at 3.2 mil vs 3.5 mil from Informa. Spring wheat acres were estimated not nearly as high as Informa, 12.5 mil vs 13.78 mil. Durum acres were estimated at 2.5 mil vs Informa’s 1.87 mil. All wheat acreage from Farm Futures survey was set at 46.6 mil vs Informa’s estimate of 47.163 mil acres.
For the week, Friday January 18th to Friday January 25th, March Corn -$.01 ½, New Crop December 2019 -$.00 ½, March Soybeans +$.08 ½, New Crop November +$.08 ½, March KC Wheat +$.03 ½, New Crop July +$.04 ¾, March Chicago Wheat +$.02 ¼, New Crop July +$.04 ¼, March MPLS Wheat +$.00 ½, March Soybean Meal -$1.20/T.
Overnight grains were mixed with corn steady to 1 lower, soybeans pulling back 4 to 5 cents and wheat firm overnight finishing 2 higher.
Analysts with SovEcon increased their total 2018/19 Russian grain export forecast by 800 TMT up to 44.6 MMT. The group raised its forecast for 2018/19 wheat exports to 35.6 MMT from 35.1 MMT previously. The Russian Ag minister though stated 2018 wheat exports will be at 36 MMT down from 37 MMT and 2019 all grain harvest at 108 to 110 MMT. Winter weather has been favorable for the 5th consecutive year.
The big Chinese trade face to face meeting still set for this Wednesday through Thursday. Before the official meeting, a group including Chinese deputy ministers will arrive in Washington today to help lay the groundwork.
High winds today throughout the Plains with another blast of arctic air mid-week. The latest 6 to 10 day outlook showing below normal temps in the North but above normal for the southern half of the U.S. with above normal precipitation for all except in the in the South and along the East Coast.
March corn rangebound over the past 4 months from $3.67 to $3.90 with nearby support at $3.71 and resistance from $3.82 to $3.84 ½. March soybeans still holding the long term higher trend from this fall with support at $8.90 and resistance from $9.26 to $9.28. March KC wheat breaking the long term lower trend but chopping sideways from the contract low at $4.82 ¼ up to $5.24 ½. March Chicago wheat holding a sideways pattern with support at $5.01 and resistance up at $5.38 ½. March soybean meal stuck in $24 range since mid-August with nearby support at $309 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