Date: March 11th, 2019
Plethora of reports on Friday from USDA. First Cold Storage as of Jan 31 with total red meat in freezers down 1% from last year. Total beef in freezers was up 2% from last year but total frozen pork was down 3% from a year ago. Next was the February COF report which was friendly. Cattle on Feed Feb 1 at 100% vs. a year ago, January Placements at 95% and January Marketings at 103%. Third and final was the supply and demand updates with total U.S. red meat and poultry production for 2019 lowered from the previous month as lower forecast beef and turkey production more than offsets higher pork production. Cash feedlot trade steady to firm compared to a week ago at $127-$130 live and mostly $205 dressed.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 03/08/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 204,000 63,400 36,900 304,300
Last Week 219,100 60,400 2,700 282,200
Last Year 249,300 68,500 22,000 339,800
Compared to last week, steers and heifers sold steady to 5.00 higher, with gains seen both in calves suitable for grazing as well as cattle suitable for direct feedlot placement. Where feeder cattle come from does make a difference on flesh condition this week. If an area has been inundated with winter moisture and harsher than normal temperatures, cattle have hardened up and are in lighter flesh than their counterparts that come from drier environments such as Northeast Colorado. Auction receipts were curtailed on this report this week due to very cold weather over last weekend which hampered movement.
For the week, Friday March 1st to Friday March 8th, April Live Cattle +$.12, June +$.52, March Feeder Cattle +$2.70, April +$2.65, April Lean Hogs +$4.15, June +$2.65. Boxed Beef, Choice +$4.84 @ $226.13, Select +$1.99 @ $218.78.
Cattle slaughter from Friday estimated at 112,000 head, down 3,000 from the week previous but up 1,000 compared to a year ago. For the week, 603,000 head, matching the week previous and up 4,000 compared to last year.
Hog slaughter from Friday estimated at 474,000 head, up 3,000 from the week previous and up 15,000 compared to a year ago. For the week, 2,548,000 head, up 99,000 from the week previous and up 138,000 from a year ago.
Boxed beef cutout values steady on light to moderate demand and offerings for a total of 95 loads sold.
Choice Cutout__226.13 +.09, +4.84 for the week
Select Cutout__218.78 +.24, +1.99 for the week
CME Feeder Index__140.03 +.27
CME Lean Hog Index__51.71 -.04
Pork Carcass Cutout__65.04 +.79
IA-S.MN Wtd Avg Carcass Base__46.73 +1.83
National Wtd Avg Carcass Base__45.86 +1.21
April live cattle still holding the higher trendline. The first line of support is at $128 with resistance near $130.50, the contract high just below that level and just above is the recent high from the continuous weekly chart from over a year ago. March feeders still on lower trend since late December, even with the break higher the last 2 trading sessions. Support held last week at $140.35 with resistance up at $145 then $147.57. April lean hogs breaking the long term lower trend, now up over $8 from the lows set last month and resistance next up near $63.
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Grains finished mixed with a mostly bearish crop report from USDA on Friday. Both U.S. corn and wheat ending stocks were increased while soybean stocks were only reduced 10 MBU from an increase in domestic crush. Wheat stocks are now estimated at 1.055 BBU, up 45 MBU from exports down 35, domestic milling down 5 and imports up 5. Corn ending stocks up 100 MBU to 1.835 BBU from exports down 75 MBU and corn used for ethanol production down 25 MBU. World stocks were also projected higher for all three. The only South American adjustment was a decrease of ½ MMT for Brazil’s soybean crop with the average pre report trade estimate expecting a reduction of 1 ½ MMT.
For the week, Friday March 1st to Friday March 8th, May Corn -$.08 ¾, New Crop December -$.05 ¾, May Soybeans -$.15 ¾, New Crop November -$.15 ¼, May KC Wheat -$.14, New Crop July -$.13, May Chicago Wheat -$.17 ¾, New Crop July -$.15 ¾, May MPLS Wheat -$.09, New Crop September -$.05 ¾, May Soybean Meal -$3.70/T, December -$3.50/T.
Overnight grains were steady to mixed with corn finished 1 higher, soybeans 1 to 2 lower and wheat 1 to 3 lower.
U.S. and China still working out details to end the trade war. Reports indicate they have reached a consensus on key issues yet still working the final language and approval by both administrations.
USDA reported a private sale of 926,000 MT or 34 MBU of soybeans for delivery to China. Export sales announcements still be watched closely for all the grains over this week, not only for the additional Chinese sales but wheat around the world as well. Prices have collapsed trying to find some support and price at which will make U.S. values competitive in the world marketplace. Iraq reportedly purchased 1.8 MBU of U.S. and Canadian Wheat. Syria purchased 7.4 MBU of Black Sea origin wheat. Algeria is in for wheat this week, mostly likely to come from France and Bangladesh is seeking optional origin wheat.
This week’s forecast calling for heavy rains in the Southern Plains and Southeast with heavy snow in the Northern Plains. The latest 6 to 10 day outlook showing below normal temps for the all except the West Coast oddly enough below normal moisture most of the U.S.
May corn broke lower last week hitting a new contact low at $3.62 ¼ with resistance up near $3.77. May soybeans taking out the long term higher trend last week with support next near $8.85 then $8.71 and up near $9.20. May KC wheat with a new contact low last week at $4.25 ½, resistance up at $4.52 then $4.70. May Chicago wheat also with a new contract low last week at $4.34 ¼ and resistance up at $4.64 then near $4.95. May soybean meal holding the support near $303, still holding a lower trend since early January, with resistance up at $311 then $314.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700