Date: March 12th, 2019
Cattle futures traded lower yesterday while hogs continued sharply higher. Pressure first hit the cattle futures from the opening bell as anticipation was built up for higher cash feedlot trade last week. Cash prices continue to climb for hogs as well as pork prices providing support as well as Chinese hog prices hitting new 14-month highs, up over 20% this month alone.
Oklahoma National Stockyards – Oklahoma City, OK
Livestock Weighted Average Report for 3/11/2019
Receipts Week Ago Year Ago
15,000 2,163 9,169
Compared to last week’s light test: Feeder steers mostly 1.00-3.00 higher. Feeder heifers steady to 4.00 lower. Feeder steers and heifers mostly steady to 4.00 lower from a full test two weeks ago. Steer and heifer calves 2.00-7.00 lower compared to both weeks. Demand moderate as cattle futures settled sharply lower. Quality average to attractive. Supply includes several feeders off winter pasture.
Joplin Regional Stockyards – Carthage, MO
Livestock Weighted Average Report for 3/11/2019
Receipts Week Ago Year Ago
8,645 731 7,888
Too few last week for a good market test, compared to two weeks ago, steers under 650 lbs and over 850 lbs steady, 650 to 850 lbs steady to 3.00 higher, heifers under 550 lbs steady to 3.00 higher, over 550 lbs steady. Demand good, supply moderate to heavy.
Cattle slaughter from Monday estimated at 119,000 head, up 3,000 from last week and up 5,000 compared to a year ago. Hog slaughter from Monday estimated at 475,000 head, up 10,000 from last Monday and up 16,000 compared to a year ago.
Boxed beef cutout values higher on good demand and light offerings for a total of 83 loads sold.
Choice Cutout__227.36 +1.23
Select Cutout__219.63 +.85
CME Feeder Index__139.28 -.75
CME Lean Hog Index__51.98 +.27
Pork Carcass Cutout__66.42 +1.38
IA-S.MN Wtd Avg Carcass Base__48.58 +1.85
National Wtd Avg Carcass Base__47.20 +1.34
April live cattle still holding the higher trendline. The first line of support is at $128.50 then $128.10 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 last week. 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 $10 from the lows set last month and resistance next up near $68.
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Grains continued under pressure to start this week with an extended forecast finally calling some below normal precipitation. Grains inspected for the week ending March 7th were not great but near expectations. Soybeans totaled 32.1 MBU, corn 30.1 MBU, wheat 21.8 MBU and grain sorghum 2.5 MBU. Talks continue with China with a possible April date being discussed for the official signing and end of the trade war. President Trump’s 2020 budget was released yesterday calling for a 15% cut to USDA.
Overnight grains were steady to higher with corn finishing 1 higher, soybeans steady and wheat 2 to 4 higher.
Brazil’s CONAB updating crop production estimates this morning. Total corn production now estimated at 92.8 MMT, up from 91.6 MMT. Soybean production reduced to 113.5 MMT from 115.3 MMT while USDA last Friday still at 116.5 MMT. Soybean harvest is ahead of pace at 57% complete compared to 48% last year and 47% long term average allowing their second crop corn to get planted ahead of pace also. South American crops still showing near 10 MMT more soybean production than a year ago and over 20 MMT more corn which will compete heavily with U.S. grains for export business this year.
South Korean feed companies purchased 128,000 MT or 5 MBU of optional origin corn overnight. There were no private export sales announcements by USDA this morning.
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 above normal temps for the western 1/3 of the U.S. with below normal temps mostly in the South and finally some below normal moisture across most of the U.S.
May corn continues to slide lower hitting a new contact low at $3.61 ½ 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 resistance up near $9.20. May KC wheat with a new contact low at $4.18 ¾, resistance up at $4.52 then $4.70. May Chicago wheat also with a new contract low at $4.27 and resistance up at $4.64 then near $4.95. May soybean meal with a new contract low as well at $301, holding a lower trend since early January and 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