Date: February 20th, 2019
Triple digit gains for cattle futures but lock limit down $3 for lean hogs. Support broke and crashed the hogs into new contract lows along with rumors spiraling out of control on social media that Canada may now have their first case of African swine fever. Over the weekend, the disease spread into new areas of China, Vietnam and Romania for the first time and traces were also detected in frozen food supplies with a massive recall by a Chinese food manufacturer. Cash feedlot trade only minimal so far this week at $124.50 live. The Fed Cattle Exchange online auction will be held later this morning with 693 head consigned compared to last week’s 785 head of which none sold.
Tulsa Livestock Auction – Tulsa, OK
Feeder Cattle Weighted Average Report for 02/18/2019
Receipts: 2370 Last Week: 1483 Year Ago: 1978
Compared to last week: Steers 3.00-5.00 higher. Heifers 2.00-4.00 higher. Quality average thru attractive. Demand good. 25 percent of the receipt totals are feeder cattle over 600 lbs. while 51 percent of the total receipts are heifers. Slaughter cows and slaughter bulls mostly steady.
OKC West Livestock Market – El Reno, OK
Livestock Weighted Average Report for 2/19/2019
Receipts Week Ago Year Ago
2,000 7,776 9,958
***Preliminary report. Final report will be out on 02/20/2019.***
Compared to last week: Steer calves mostly steady to 2.00 lower. Heifer calves 2.00-3.00 lower. Demand moderate to good. Quality average. Cold front pushing thru the state today bringing a possibility of freezing rain and snow.
Winter Livestock Inc – La Junta, CO
Feeder Cattle Weighted Average Report for 02/19/2019
Receipts: 1637 Last Week: 3066 Year Ago: 2571
Compared with last Tuesday: Feeder steers under 400 lbs steady, 400 to 700 lbs 3.00 to 5.00 higher, instances 10.00 higher on thin fleshed offerings. Feeder Heifers under 550 lbs steady to 1.00 higher, 550 to 600 lbs 3.00 to 5.00 higher, 650-700 lbs steady. Feeder Steers over 700 lbs steady. Feeder Heifers over 700 lbs scarce. Slaughter cows and bulls in a light test steady. Trade active. Demand good.
Cattle slaughter from Tuesday estimated at 114,000 head, down 4,000 from the week previous and down 3,000 compared to a year ago. Hog slaughter from Tuesday estimated at 481,000 head, up 28,000 from the week previous and up 37,000 compared to a year ago.
Boxed beef cutout values steady to firm on moderate to fairly good demand and moderate to heavy offerings for a total of 138 loads sold.
Choice Cutout__217.27 -.12
Select Cutout__213.54 +.54
CME Feeder Index__141.28 -.22
CME Lean Hog Index__54.43 -.31
Pork Carcass Cutout__59.91 -1.67
IA-S.MN Wtd Avg Carcass Base__48.27 -.38
National Wtd Avg Carcass Base__48.23 -.02
Cattle On Feed Industry Estimates for Feb 22, 2019 report
Avg Estimates Prev Rpt
On Feed January 1 102% 102%
Placements during Dec 101% 95%
Marketings in Dec 100% 101%
February live cattle not only finished higher yesterday, but gapped higher on the open and hit new contract high at $128.52. It did take a dip below nearby support last week with the next down at $124.70 with resistance next up near $130 from the weekly charts and going back to last February. March feeders reversed higher yesterday but still chopping sideways to lower with support at $142 and resistance up at $145.50 then $147.50. April lean hogs continuing the lower trend and into a new contract low with support next at $55 then $51.50 from the continuous weekly chart. Expanded limits to $4.50 +/- today for lean hogs could get interesting.
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Grains were in the red for the majority of the day yesterday, led yet again by wheat with new contract lows for KC, new recent lows for both the Chicago and MPLS contracts. On that break lower, Egypt of course tendering again for additional wheat. Export inspections for the week ending February 14th were terrible for wheat at only 13.1MBU, over 28 MBU per week now to hit USDA’s current estimate. Corn and soybeans though were good at 37.1 & 37.9 MBU respectively while grain sorghum jumped up to 4.7 MBU.
Overnight grains were mixed with corn holding on for a penny higher finish, while soybeans finished 4 to 5 lower and wheat 3 to 8 lower. Not even a single offer of U.S. wheat in the Egyptian tender with French wheat the cheapest value now and Russia back in the market this round and not too far behind. Last week Egypt purchased 300,000 MT or 11 MBU of wheat from France and Ukraine.
Soybean harvest continues in Brazil with about half the second crop corn planted now. Reuters survey yesterday indicated most feeling positive about the potential for Brazil’s second corn crop with an average production estimate at 65.3 MMT, up 21% from last season and a 4.2% increase in planted acres. Weather remains favorable in the near term in both Brazil and Argentina.
Winter weather again this week in the U.S. with heavy snow across the Plains and Midwest, heavy rains continue in the Southeast with ongoing flooding and now possible severe weather by the weekend. The latest 6 to 10 day outlook still showing below normal temps for all except in the Southeast. Precipitation forecasts above normal in the North and in the Southeast with below normal in the Southwest.
March corn into a new recent low breaking the nearby support with the next down at $3.67 and resistance up at $3.78. March soybeans also dipping below the nearby price support at $9.00, still holding the long term higher trend from this fall, with the next support area near $8.91 and resistance at $9.20. March KC wheat down almost $.60 so far this month, into a new contract low overnight at $4.54 ¾ and resistance up at $4.95. March Chicago wheat hitting a new contract low overnight as well at $4.81 ¾ and resistance up at $5.10. March soybean meal still rangebound but on a lower trend so far this year testing the long term support levels at $303.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700