Date: August 28th, 2019
Livestock futures traded mixed yesterday but finished lower. The Monday gains and renewed optimism over resolving the trade war with China has faded yet again. Cash feedlot trade still quiet in the South with light trade in the North at $109 to $110 live and $173 on a dressed basis, mostly steady to slightly weaker than a week ago. The Fed Cattle Exchange online auction will be held later this morning with 734 head consigned. Hog futures remain under pressure with pork prices down 12 consecutive days now, cold storage building and African swine fever still spreading in Asia and Europe.
OKC West Livestock Auction – El Reno, OK
Livestock Weighted Average Report for 8/27/2019 – Final report including feeder cattle will be released later today
Calf Receipts: 1,200 Last Week Total: 700 calves, 2,448 total Last Year Total: 6,063
Compared to last Tuesday: Steer and heifer calves were too lightly tested for an accurate market test. Demand moderate to good. Quality plain to average.
Cattle slaughter from Tuesday estimated at 117,000 head, up 1,000 from last week but down 3,000 from last year. Hog slaughter from Tuesday estimated at 485,000 head, up 2,000 compared to a week ago and up 12,000 compared to a year ago.
Boxed beef cutout values lower on light to moderate demand and offerings for a total of 112 loads sold.
Choice Cutout__236.76 -1.30
Select Cutout__210.71 -.95
CME Feeder Index__138.38 +.72
CME Lean Hog Index__73.52 -.98
Pork Carcass Cutout__74.07 -4.92
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__61.70 -2.52
National Wtd Avg Live Price__50.33 +.37, Wtd Avg Carcass Base__61.57 -1.69
August live cattle closed the first gap last Friday and found resistance at the 50-day moving average at $105.75. The October contract though still has a gap from $101.67 to $103.75 then another from there up to $106.42. August feeders closed the last remaining gap on Friday, holding now a higher short term trend but are set to expire tomorrow. The September contract still has a gap from $136.80 to $138.07 with support around $132 and resistance up near $144. October lean hogs still holding a lower trend with a recent low at $59.30, contract low down at $58.20 and resistance up near $66 then $70.
Grains were mixed yesterday with crop conditions improving this past week and non-threatening weather or maybe not threatening enough with below normal temps. Also not helping is a strong U.S. dollar and a weak Brazilian Real. The export advantage to China is already historically wide with the additional tariffs in place and getting worse with diverging currencies. This will also encourage additional acres in Brazil as producer’s there see increased profitability.
Egypt did end up buying a total of 6 cargoes of wheat yesterday, spreading it out with some from Russian, Ukraine and France. U.S. wheat is still some $.50/BU out from competing with the North African and Middle East markets. Asia and Central America though are at least buying from here and our export pace this year continues to be above a year ago.
USDA released an update FSA acreage data as of August 22nd. Roughly 800,000 acres were added for both corn and soybeans but just a reminder that FSA acreage will not equal NASS acreage for the simple fact that not all producers participate in government programs or have crop insurance. There is still a little wider gap than past years between the two agencies but FSA data is still coming in and will not be complete until October. The other difference specifically to corn acreage is that FSA does not count the PP corn for silage as planted to corn while NASS does count the planted acres all combined and adjusts for harvested for grain. Total PP acres reported increased by 304,000 from August 1st to now 19.785 million acres, 11.4 million PP corn, 4.45 million PP soybeans and 3.9 million PP other crops.
Stats Canada Principal Field Crop Output Estimates Headline Recap
2019 All Wheat Estimate: 31.251 MMT, expected 32.3, 2018 31.77 MMT
2019 Durum Wheat Estimate: 4.420 MMT, expected 5.1, 2018 Crop 5.74 MMT
2019 Spring Wheat Estimate: 25.108 MMT
2019 Canola Estimate: 18.453 MMT, expected 18.9 MMT, 2018 Crop 20.34 MMT
2019 Oats Estimate: 3.953 MMT, expected 4.0 MMT, 2018 Crop 3.44 MMT
2019 Barley Estimate: 9.644 MMT, expected 9.7 MMT, 2018 Crop 8.38 MMT
2019 Soybean Estimate: 6.204 MMT, expected 6.3 MMT, 2018 Crop 7.27 MMT
2019 Corn for Grain Estimate: 13.606 MMT, 2018 Crop 13.88 MMT
Overnight, grain markets were mixed with corn flat to fractionally lower, soybeans 1 higher and wheat given back yesterday’s small gains, steady to 5 lower.
Cool weather and crop maturity remain as the biggest concern, just not enough concern yet to generate a weather rally in this market. Heavy rains towards the end of this week still in forecast for the Western Corn Belt, but the latest models have reduced the amounts and coverage area. The latest 6 to 10 day outlook still showing below normal temps dipping down into KS and OK and stretching from the Dakota’s to the Great Lakes with above normal centered over the Southwest. Below normal moisture still showing in the Plains extending into the Eastern Corn Belt and now high winds and heavy rains expected in the Southeast depending on the track and intensity of currently Tropical Storm Dorian.
September corn with a new recent low at $3.56 ½ with support next at $3.52 ½ and a gap from $3.79 to $3.85 ¼. The December contract dipped down to $3.65 overnight, also a new recent low, with the contract low down at $3.63 ¾ and a gap from $3.88 to $3.92 ¾. September soybeans holding support near $8.42 with resistance up at $8.84. The November contract holding $8.55 support with resistance up near $9. September KC wheat holding a lower trend with the contract low down at $3.80 ¾ and resistance up around $4.20. September Chicago wheat trending lower into a new recent low at $4.56 and resistance up at $4.80. September Soybean Meal trending lower with the contract low down at $286.90, support at $289 and resistance around $300.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700