Date: September 4th, 2019
Corn and wheat futures sharply lower after the long 3-day holiday weekend, feeder cattle and lean hogs triple digits higher and the soy complex traded mixed throughout the day to finish steady. There continues to be trade and demand uncertainty for both the grains and livestock but holding near the lows these past couple weeks and finding some support for cattle and hogs as renewed some buying interest. Lean hog futures have started the run higher breaking the short term lower trend with Tuesday’s limit move higher, but as bipolar as they act it would be good to see both live and feeder cattle futures take out last week’s highs before getting real excited. Cash feedlot trade so far this week has been only light volume and limited to KS and WCB at $105 live and $170 dressed. The Fed Cattle Exchange online auction will be held later today with 847 head consigned compared to last week’s 734 head of which 432 sold at $106 out of NE for delivery 1-17 days out.
McAlester Union Livestock Auction – McAlester, OK
Livestock Weighted Average Report for 9/3/2019
Total Receipts: 1,725 Last Week: 1,840 Last Year: 1,375
Compared to last week; Steer calves 5.00 to 11.00 lower. Heifer calves 4.00 to 8.00 lower. Demand was light to moderate. Quality was plain to average. Slaughter cows breakers and leans 1.00 to 3.00 lower, boners 2.00 higher. Slaughter bulls 6.00 lower.
OKC West Livestock Auction – El Reno, OK
Livestock Weighted Average Report for 9/3/2019
Final report including feeder cattle will be released 9-4-19
Total Calf Receipts: 600 Last Week: 7,616 Last Year: 4,119
Compared to last Tuesday: All classes of steer and heifer calves to lightly tested for an accurate trend
Cattle slaughter from Tuesday estimated at 117,000 head, matching last week and up 2,000 from last year. Hog slaughter from Tuesday estimated at 485,000 head, up 26,000 compared to a week ago and up 22,000 compared to a year ago.
Boxed beef cutout values weak to lower on light demand and light offerings for a total of 77 loads sold.
Choice Cutout__230.66 -1.11
Select Cutout__211.62 -.65
CME Feeder Index__139.09 -.09
CME Lean Hog Index__67.97 -1.48
Pork Carcass Cutout__74.60 +2.29
IA-S.MN Wtd Avg Live Price__43.46 no comp, Wtd Avg Carcass Base__55.98 -.24
National Wtd Avg Live Price__44.33 -1.31, Wtd Avg Carcass Base__55.34 -.44
October live cattle still has a gap from $101.67 to $103.75 then another from there up to $106.42 with support right around $98. September feeders closed one of the gaps but not the other which remains from $136.80 up to $138.07 with support holding at $132. October lean hogs breaking the month and half lower trend but still holding a long term lower trend with the recent low at $59.30 and resistance next up near $69.
Over in the grains, again corn and wheat under the heaviest pressure to start this week with new lows hit yesterday which just added more pressure and technical selling. Export inspections for the week ending August 29th remain disappointing for corn at 14 MBU. Wheat inspections are still decent at 19.3 MBU while grain sorghum at 3.5 MBU and soybeans at 47.1 MBU exceeded expectations. Wheat deliveries continue to add pressure to the front month futures and the corn/wheat spread continues to narrow as feed wheat had been in high demand internationally and as a corn replacement even domestically.
USDA reported total corn consumed for alcohol and other uses was 508 MBU in July 2019. Total corn consumption was down less than 1% from June 2019 and down 5% from July 2018. Soybeans crushed for crude oil was 5.39 million tons (180 MBU) in July 2019, compared with 4.73 million tons (158 MBU) in June 2019 and 5.37 million tons (179 MBU) in July 2018.
After the close, USDA updated crop progress and conditions…
Corn G/E +1% to 58%, 81% dough compared to 93% avg, 41% dent compared 63% avg, 6% mature compared to 20% last year and 13% avg
Soybean G/E unchanged at 55%, 86% setting pods compared to 98% last year and 96% avg
Grain sorghum G/E +1% to 67%, coloring 52% compared to 64% avg, mature 24% compared to 33% avg, harvest 21% compared to 22% avg (TX 72% compared to 57% avg)
Spring wheat harvest 55% complete compared to 86% last year and 78% avg
Overnight, grain markets bounced back some with corn finishing steady to 1 higher, soybeans 3 higher and wheat 1 to 3 higher.
Not much new news overnight, the latest round of tariffs between the U.S. and China kicked in the 1st of September, we are still awaiting news on the RFS to supposedly offset some of the hit of the recent SRE’s and next crop report coming out next Thursday.
Over the weekend and into early next week hot temps dominated the Southern Plains and heavy rains expected to hit the East Coast. The 5-7 day accumulation only showing some light rain in the forecast from the Dakota’s down into Iowa. The latest 6 to 10 day outlook showing above normal temps centered over the Southern Plains and covering most major growing areas with below normal on the West Coast and Northeast and below normal moisture for the Southeast with above normal moisture in the Northern Plains and PNW.
Grains are all oversold yet funds continue to sell building back net short positions. December corn down to a new contract low at $3.60 ½ yesterday with the September contract down to $3.49 and the nearby low from earlier this year down at $3.35 ½. Resistance is up at $3.81 then a gap from $3.88 to $3.92 ¾. November soybeans down to $8.52 ½ last week with resistance up at $8.82 then up near $9. December KC wheat down to a new contract low at $3.81 with resistance up around $4.10. December Chicago wheat still holding a lower trend into a new recent low at $4.50 ½, contract low down at $4.42 ¼, resistance up around $4.80. October Soybean Meal trending lower with the contract low down at $288.70, a new recent low at $290.10 and resistance at $295 then $302.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700