Date: September 30th, 2019
Triple digit gains for cattle futures to end the week which helped pull lean hog futures higher nearby. Fats are now up $12+ from lows earlier this month but still have over a dollar to fill the gap left from the limit down day after the Tyson plant fire over a month and a half ago. Feeders are up $13 to $16 from low to high so far this month, no gaps remaining and looking to test resistance around the $142 to $144 area. Cash feedlot trade last week was reported at $103 live Southern Plains, $2 higher than the week previous but still some $8 under a year ago. Northern trade is still pulling in higher money with Nebraska trading at $106 to $107 live, $4 to $5 higher than the week previous and dressed trade at $165 to $167, $5 higher.
USDA Quarterly Hogs & Pigs Report was in line to slightly bearish with most numbers matching expectations or slightly higher. United States inventory of all hogs and pigs on September 1, 2019 was 77.7 million head. This was up 3 percent from September 1, 2018, and up 3 percent from June 1, 2019. This is the highest September 1 inventory of all hogs and pigs since the estimates began in 1988. Breeding inventory, at 6.43 million head, was up 2 percent from last year, and up slightly from the previous quarter. Market hog inventory, at 71.2 million head, was up 4 percent from last year, and up 3 percent from last quarter. This is the highest September 1 market hog inventory the estimates began in 1988. The June-August 2019 pig crop, at 35.3 million head, was up 3 percent from 2018. This is the largest June-August pig crop since estimates began in 1970.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 09/27/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 208,000 73,900 24,800 306,700
Last Week 158,500 78,100 32,100 268,700
Year Ago 185,400 47,000 1,900 234,300
Compared to last week, steers and heifers sold 4.00 to 8.00 higher in the North and South-Central regions, while the Southeast calves sold steady to 2.00 higher. Demand was much improved this week after last week’s bullish Cattle On Feed report confirmed much lower feedyard placements which is supportive for the coming months in the fed cattle market. Fairly large auction receipts across many states this week as this report has the largest auction receipts since week ending April 5, 2019. Typically, there are some weeks that auction receipts get large through the summer as yearlings move off summer grass. Yearling feeder cattle producers feeling better about the market and willing to consign their cattle for sale. These yearling operators have been able to hold their cattle on grass as grazing has been plentiful and a lack of a killing frost in Northern areas have allowed yearlings to stay out on grass without losing pounds. Consignments of spring born calves have not hit their stride yet, and demand has been moderate to good, especially for those calves on a vaccination program. Buyers are willing to take on nonweaned calves this time of year if those preweaning shots have been given. Nonvaccinated calves will see steeper discounts as the calendar moves along when hot days and cold nights make them that much higher risk. Silage harvest has been completed in the Southern Plains but is still in full swing in the North. Farmer feeders are staying busy, but they are ready and willing to take on yearlings to fill their yards as the turnaround in the cattle futures has done a great deal to give them a little optimism about the future of the fed cattle market.
For the week, Friday September 20th through Friday September 27th, October Live Cattle +$5.67, December +$5.42, October Feeder Cattle +$5.12, November +$5.95, October Lean Hogs +$4.92, December +$3.60. Boxed Beef, Choice -$4.39 @ $212.58, Select -$1.86 @ $189.86. Pork Carcass Cutout +$4.11 @ $73.26.
Cattle slaughter from Friday estimated at 116,000 head, matching the week previous but down 5,000 from last year. For the week, 648,000 head, down 10,000 from the week previous and matching last year. Beef production estimated at 528.8 million pounds compared to 536.6 million the week previous and 537.5 million last year. Beef production only up .1% compared to a year ago with cattle slaughter up 1.1%.
Hog slaughter from Friday estimated at 484,000 head, up 44,000 compared to the week previous and up 30,000 compared to a year ago. For the week, 2,646,000 head, up 58,000 compared to the week previous and up 87,000 compared to a year ago. Pork production estimated at 554.3 million pounds last week compared to 540.1 the week previous and 535.7 million last year. Pork production is up 4.0% compared to a year ago with slaughter up 3.4%.
Boxed beef cutout values weak to lower on light demand and moderate offerings for a total of 102 loads sold.
Choice Cutout__212.58 -.93, -4.39 for the week
Select Cutout__189.86 -.53, -1.86 for the week
CME Feeder Index__141.77 +.63
CME Lean Hog Index__55.34 +.62
Pork Carcass Cutout__73.26 +1.25, +4.11 for the week
IA-S.MN Wtd Avg Carcass Base__49.11 -1.32, National Wtd Avg Carcass Base 48.39 -.60
October live cattle into a new recent high on Friday at $105.25 with the gap remaining up to $106.42. Support is down around $102 with resistance up around $110. October feeders hitting a new 4-month high on Friday at $144.72 with resistance next up at $150 and support at $140. October lean hogs still holding the long term lower trend and remain choppy in a $10 range from the recent low down at $59.30 up to the nearby resistance near $69.
Grains did very little last week besides back and forth trading from negative to positive rhetoric on U.S. and Chinese trade relations. China did purchase nearly another 1 MMT of soybeans this past week from the U.S. but that isn’t enough to hold a rally. MPLS wheat pulled back a little to end last week, but still has had an impressive $.60+ rally so far this month. U.S. weather heading into the weekend showed much below normal temps in the Northern Plains and creeping in from the Northwest, heavy rain that will slow harvest from the Southern Plains up into the Great Lakes and still much above normal temps for the Southeast. The 6-10 day outlook still showed below normal temps dipping as far south as NE and IA and stretching from the PNW to the Great Lakes with continued above normal precipitation chances over most of the major growing areas.
For the week, Friday September 20th through Friday September 27th, December Corn +$.00 ¾, March +$.02, November Soybeans +$.00 ¼, January +$.01, December KC Wheat unchanged, March -$.00 ¼, December Chicago Wheat +$.03, March +$.02 ¾, December MPLS Wheat +$.22 ¾, March +$.23, October Soybean Meal -$1.20/T, December +$.10/T.
Overnight, grains were firm led by soybeans and MPLS wheat. Corn finishing steady to fractionally higher, soybeans 6 to 7 higher, KC and Chicago wheat mixed and MPLS wheat 5 to 6 higher. Heavy snow in the High Plains and Northern Rockies with more to come this week across MT and the Canadian Prairies. USDA will update crop progress and conditions later this afternoon with the market looking for harvest updates as MT still had 20% of its spring wheat left to harvest as of last week.
USDA reported a private sale of 120,000 MT or 4.7 MBU of corn sold to Mexico.
USDA will update quarterly grain stocks and release its annual small grains summary today at 11 am CST. This will be the ending stocks for fall crops and recap of winter wheat harvest and updated estimate on spring wheat production. It is expected to show 2.43 BBU of corn, 1.79 BBU of soybeans and 2.32 BBU of wheat on the farm and in commercial storage as of September 1st. The expectations for the small grains summary pointing towards lower spring wheat production than a month ago. All wheat production expected to be 1.971 BBU compared to 1.980 last month with spring wheat down 12 MBU to 585 MBU.
Dryness in Argentina still concerning as their wheat crop reaches maturity and corn crop as just started growing. Here in the U.S. this week will see below normal temps in the North and West with heavy rains expected from the TX Panhandle through the Great Lakes. The latest 6 to 10 day outlook still showing above normal temps in the Southeast and below normal in the Northwest with below above normal moisture for the eastern 2/3 of the U.S. and below normal in the West.
December corn briefly got above $3.75 last week but settling in around the $3.70 area for the past couple weeks with support at $3.66 and resistance up at $3.77 ½. November soybeans showing a lower trend with support at $8.80 and resistance up at $9 and $9.05. December KC wheat holding a higher trend so far with support at $4.00 then $3.81 and resistance up at $4.14. December Chicago wheat also trending higher with support at $4.76 and resistance up at $4.92 then around the $5 mark. December MPLS wheat with support at $5.44 and resistance up at $5.82. October soybean meal choppy and still trending lower from $288.30 to $302.50 these past couple months.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700