Date: February 27th, 2019
Livestock futures firmed yesterday as grains fell under additional pressure. Showlists this week are larger with carryover from last week’s low volume cash feedlot trade. Packers slowed chains significantly the past couple week’s providing a pathway that prevents them from pushing the cash market sharply higher. Only a few hundred have traded thus far at $126 live and $203 on a dressed basis in the North which is steady to $1 higher than last week. The Fed Cattle Exchange online auction to be held later this morning with only 287 head consigned compared to last week’s 693 head of which 323 sold at $125 live out of KS.
China’s current African swine fever epidemic has now pushed the government to testing a plan to organize the country into 5 sectors with regard to pork trade. Each region of the five regions will have top producing state to ensure supply and avoid price distortions. The regions will coordinated disease prevention rather than at the provincial level.
Oklahoma National Stockyards – Oklahoma City, OK
Livestock Weighted Average Report for 2/25/2019
Receipts Last Reported Year Ago
7,556 2,633
Compared to last week: Feeder steers sold steady to 3.00 higher. Feeder heifers mostly steady to 3.00 higher. Steer calves steady to 1.00 higher, lightweights not well tested with a sharply higher undertone noted. Heifer calves mostly 4.00-6.00 higher on a lighter test. Demand moderate to good for feeder cattle, good to very good for grazing calves. Quality average to attractive with several thin fleshed light weight cattle available.
Tulsa Livestock Auction – Tulsa, OK
Feeder Cattle Weighted Average Report for 02/25/2019
Receipts: 2,513 Last Week: 2,370 Year Ago: 1,044
Compared to last week: Steers 4.00-6.00 higher. Heifers 1.00-3.00 higher. Demand good. Quality good. Slaughter cows and Slaughter bulls both 2.00 higher.
Joplin Regional Stockyards – Carthage, MO
Livestock Weighted Average Report for 2/25/2019
Receipts Week Ago Year Ago
6,873 4,509 4,523
Compared to last week, steers and heifers under 450 lbs steady, steers 450 lbs to 650 lbs and heifers 450 to 600 lbs steady to 3.00 higher, steers over 650 lbs steady, heifers over 600 lbs steady to 2.00 lower. Demand moderate to mostly good, supply moderate. Demand best for middle weight calves suitable to graze.
Winter Livestock Inc – La Junta, CO
Feeder Cattle Weighted Average Report for 02/26/2019
Receipts: 1453 Last Week: 1637 Year Ago: 2511
Compared with last Tuesday: Feeder Steers under 700 lbs steady to 2.00 lower. Feeder Heifers under 600 lbs steady to 2.00 lower, 600 to 700 lbs steady to 2.00 higher. Yearling feeder steers over 700 lbs steady to 2.00 lower. Yearling feeder heifers over 700 lbs steady. Slaughter cows and bulls mostly steady.
OKC West Livestock Market – El Reno, OK
Livestock Weighted Average Report for 2/26/2019
Receipts Week Ago Year Ago
4,000 6,750 6,570
*** Final report including feeder cattle will be released 2-27-19 ***
Compared to last Tuesday: Steer calves sold mostly steady with few trades of 500-600 lbs up to 5.00 higher. Heifers calves traded 5.00-8.00 higher. Demand good to very good as demand for wheat pasture cattle increases. Quality plain to attractive.
Cattle slaughter from Tuesday estimated at 118,000 head, up 4,000 from the week previous and matching last year. Hog slaughter from Tuesday estimated at 478,000 head, up 2,000 from the week previous and up 33,000 compared to a year ago.
Boxed beef cutout values steady on Choice and lower on Select on light to moderate demand and moderate offerings for a total of 134 loads sold.
Choice Cutout__219.67 +.12
Select Cutout__213.73 -.84
CME Feeder Index__140.33 -.09
CME Lean Hog Index__52.85 -.28
Pork Carcass Cutout__60.96 +.04
IA-S.MN Wtd Avg Carcass Base__45.56 -.10
National Wtd Avg Carcass Base__45.29 -1.00
February live cattle with a new contract high yesterday at $129.82 and expiring tomorrow. April live cattle have been trending higher for almost a year now, also into a new contract high at $130 yesterday. That is the next area of resistance up to $130.50 from the weekly continuous chart and going back to last February. March feeders still chopping sideways to lower with support at $142 and resistance up at $145.50 then $147.50. April lean hogs still holding a lower trend, hitting a new contract low last week at $52.25, a drop of over $20 since early December.
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Over in the grains, soybeans led the way lower as there is yet a confirmation of the 10 MMT ton additional soybean sale to China mentioned by Ag Secretary Purdue late last week. Wheat scored new lows again for both the KC HRW and Chicago SRW contract. Taiwan purchased 110,000 MT of U.S. milling grade wheat and there are quite few tenders coming due over this week into the Middle East and North Africa and rumors of additional interest in SE Asia and South America. This nearly month long wheat price collapse is starting to pull corn with it as there is some chatter about wheat getting back in the U.S. feed ration.
Overnight grains were higher with corn and soybeans both finishing 1 to 2 higher and wheat finished 4 to 7 higher.
First notice day for the March contracts is tomorrow. If you are long March, you need to roll or exit those positions today to avoid delivery. If short, you still have some time but volume will be getting thin and daily trading limits are removed from the front contact during delivery.
Russia’s Sovecon raised Russian wheat exports to 35.9 MMT vs. 35.6 MMT due to the rapid and continued pace of exports. They also denied reports yet again they will be curbing or placing a grain quota on exports this marketing year.
South Korean grain companies purchased a total of 269,000 MT or 10.6 MBU of optional origin corn, likely to come from South America.
China’s state soybean buyer Sinograin is expected to sell off current soybean ownership in order to take in new purchases from the US. Indications are that COFCO has enough capacity that it does not need to sell any inventory to make room for the new purchases
South American weather is not offering much of a story recently. SW Argentine crops are a little dry, but rains are still in the forecast next week. The rest of the country and Brazil are generally in good shape. Brazil is rapidly moving through soybean harvest and planting their second crop corn. Most in the market have 115 MMT and 54 MMT soybean production for Brazil and Argentina currently, which is still 10 MMT above last year’s combined crops. The competition for exports will be tough this spring/summer with Brazil soybeans already around $5/MT or $.14/BU cheaper landed in China without applying the current 25% tariff.
U.S. temps remain much below normal in the North. The latest 6 to 10 day outlook still showing below normal temps for all except in the Southwest and Southeast. Precipitation forecasts are now above normal in the West and Southeast with below normal finally over the Midwest.
March corn now testing long term support at $3.65 with resistance tested last week at $3.78. March soybeans testing the long term higher trend from this past fall with support from $9.00 to last week’s dip down to $8.93 and resistance at $9.31. March KC wheat crashing lower these past few weeks into a new contract low at $4.32 with resistance up at $4.95. March Chicago wheat also hitting a new contract low at $4.56 ¼ and resistance up at $4.93. March soybean meal still rangebound but on a lower trend so far this year testing the long term support last week and again yesterday just below $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