Date: February 4th, 2019
The only cash feedlot trade to confirm by the close on Friday was at $198 to $199 dressed in the North which was $1 to $2 higher than the previous week. All bids at $122 live in KS and TX were passed which worked out for feedlots with packers paying $123 to $124 live in both late on Friday. Packers continue to slow down the chains with only 593K head killed last week compared to 610K head the week prior.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 02/01/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 210,700 53,900 3,500 268,100
Last Week 186,800 35,500 32,100 254,400
Last Year 282,200 43,700 1,000 326,900
Compared to last week, steers and heifers sold mostly 1.00 to 4.00 higher with instances 6.00 higher. Many auctions saw diminished receipts for the second week in a row. Buyers were willing to purchase calves for grazing this week and those calves could see some health problems in the coming weeks if they weren’t weaned and vaccinated. Large swings in temperatures from mid-week to the weekend are being forecast and can wreak havoc on a calves’ immune systems if the vaccination protocols aren’t followed. Travel mid-week was brutal on both man and beast and some auctions either rescheduled due to the cold or cancelled this week altogether. Those in the North took a pause in marketing somewhat to make sure animals were tended to and tried not to overwork as the temperatures took a toll mentally and physically.
For the week, Friday January 25th to Friday February 1st, February Live Cattle -$.60, April -$.57, March Feeder Cattle -$1.10, April -$.72, February Lean Hogs -$2.02, April -$2.00. Boxed Beef, Choice -$2.75 @ $214.26, Select -$1.12 @ $213.15, Pork Carcass Cutout -$.68 @ $66.99
Cattle slaughter from Friday estimated at 104,000 head, down 12,000 from the week previous and down 11,000 compared to a year ago. For the week, 593,000 head, down 17,000 from the week previous and down 20,000 from a year ago. Beef production estimated at 492.2 million pounds compared to 507.0 million the week prior and 506.6 million pounds last year.
Hog slaughter from Friday estimated at 467,000 head, down 6,000 from a week ago but up 10,000 compared to a year ago. For the week, 2,387,000 head, down 114,000 from the week previous and down 46,000 from last year.
Boxed beef cutout values lower on Choice and firm on Select on light to moderate demand and light offerings for a total of only 73 loads sold.
Choice Cutout__214.26 -1.13
Select Cutout__213.15 +.27
CME Feeder Index__141.86 -.71
CME Lean Hog Index__57.18 -.22
Pork Carcass Cutout__66.99 -1.06
IA-S.MN Wtd Avg Carcass Base__50.25 -.01
National Wtd Avg Carcass Base__50.38 -.32
Actual slaughter data for weeks ending December 15 and 22, 2018 were released last week and the weekly difference between the cattle estimate and actuals were only 287 head for w/e December 15 and only 1,079 head for w/e December 22.
NASS will release the January 1 Cattle on Feed report on February 22 (originally scheduled for January 25). In addition, the February 1 Cattle on Feed report will be published on March 8 (originally scheduled for February 22).
February live cattle will need to bounce back higher this week to continue to the higher trend that has been in place since mid-November. The contract high is up at $127.95 with the next area of resistance up near $130 from the weekly charts and going back to last February. Support is at $124.70 then down around $123. March feeders have been choppy from $140.35 to $147.57 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 filled the gap left from August but holding above $56 so far with support next down at $52.
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Good talks between the U.S. and Chinese reported again last week provided the most support over in the grains on Friday. Thursday though was the day all grains were hit hard with end of the month profit taking that kept soybeans lower for the week while corn and wheat ended with only minor gains or losses. Soybeans started the day with a big jump higher on Friday but pulled back from new recent highs. The markets will be focused on new USDA crop reports later this week and updated South American weather forecasts.
For the week, Friday January 25th to Friday February 1st, March Corn -$.02, New Crop December 2019 -$.01, March Soybeans -$.07 ½, New Crop November -$.07, March KC Wheat -$.00 ¾, New Crop July -$.03 ¼, March Chicago Wheat +$.04 ¼, New Crop July -$.01, March MPLS Wheat +$.00 ¾, March Soybean Meal -$2.10/T.
Overnight grains overall had a weaker tone even with China’s COFCO announcing it had purchased 1 MMT or 36.7 MBU of U.S. soybeans. Corn and soybeans both finished fractionally lower with wheat steady to 2 lower.
USDA announced a private sale of 612,000 MT or 22.5 MBU of soybeans sold to China. USDA will begin catching up on reports with its monthly Grain Crushings and Fats and Oils reports to be released at 2 PM today. These were originally scheduled for release back on January 2nd.
Stats Canada will update end of December stocks tomorrow. All wheat stocks are expected to be at 23.4 MMT compared to 23.77 MMT a year ago. Oat and barley stocks are expected to be slightly lower while canola stocks slightly higher than a year ago.
Argentine corn is looking great even with all the talk of excessive rains and flooding. Brazil soybeans though were hit with hot and dry weather as harvest progresses. Most private estimates down to 110 to 115 MMT which is some 2 to 5 MMT lower than previous estimates.
Temps creep back to below normal by midweek with heavy rains expected in the Midwest and Southeast. The latest 6 to 10 day outlook showing below normal temps in the North and West with above normal for the Southeast and above normal precip for all except the PNW and FL.
March corn rangebound the past 4 months from $3.67 to $3.90 and squeezing tighter with nearby support at $3.71 and resistance from $3.82 to $3.84 ½. March soybeans with a new recent high last week and still holding the long term higher trend from this fall with support at $8.90 and resistance at $9.41. 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