Date: October 15th, 2019
Good start for the livestock futures with cattle mostly triple digits higher yesterday and hogs mixed to mostly higher. Negotiated cattle sales confirmed at 72,265 head last week compared to over 85K the week previous. Average price also confirmed over $109 live with a few hitting $111 on Friday. Dressed sales averaged just under $172 with $172 the top.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 10/14/2019
Total Receipts: 6,788 Last Week: 3,529 Last Year: 4,944
Compared to last week, steer and heifer calves mostly steady to 2.00 higher, yearlings steady to 2.00 higher. Demand moderate for calves, good for yearlings, supply moderate to heavy.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 10/14/2019
Total Receipts: 7,762 Last Week: 7,913 Last Year: 3,176
Compared to last week: Feeder steers sold mostly 1.00-3.00 higher. Feeder heifers unevenly steady. Steer and heifer calves mostly steady on limited comparable receipts. Demand moderate. Quality plain to average. Buyers remain wary of buying short-weaned or unweaned calves as the fall weather remains volatile.
Cattle slaughter from Monday estimated at 117,000 head, up 1,000 from last week and up 2,000 from last year. Hog slaughter from Monday estimated at 491,000 head, up 7,000 compared to last week and up 30,000 compared to a year ago.
Boxed beef cutout values firm on moderate to good demand and offerings for a total of 82 loads sold.
Choice Cutout__217.22 +1.56
Select Cutout__189.33 +.65
CME Feeder Index__144.27 +.64
CME Lean Hog Index__62.11 +.93
Pork Carcass Cutout__77.52 +.61
IA-S.MN Wtd Avg Live Price__43.06 +.79, Wtd Avg Carcass Base__57.12 +.58
National Wtd Avg Live Price__41.92 +.96, Wtd Avg Carcass Base__56.27 +.69
October live cattle continue to rally, into a new 5-month high on Monday at $110.85. Support is down at $107.80 with resistance next up around $120. October feeders holding the higher trend with support at $140.50 and resistance next up near $148. December lean hogs are now the front month contract, still holding a lower trend since mid-April with support at $68 and resistance up at $72.72.
Weather was a key part of the news this past week with our first major winter storm and potential killing frost over the western growing area. It will take some time to determine though how much damage was caused. USDA released its October crop report on Thursday with bullish estimates for soybeans but corn not as friendly as expected which sent the grains lower.
Friday was a turnaround which resulted in weekly gains for all the grains. The trade talks with China in D.C. ending with what is being called a Phase 1 of the overall deal to resolve the issues that have plagued the Ag industry for more than a year now. The comments came out after the close but could have helped push grains higher into the close Friday. China will look to purchase up to $50 Billion in U.S. Ag products as progress was also made on currency manipulations and technology transfer issues. The U.S. will not implement another round of tariffs slated to begin next week. Since 2001 the largest year of Ag related products sold to China topped $29B in 2013. This looks to be a couple years’ worth of sales and matches with massive the 123,500 MT pork sale to China for 2020 within the weekly export sales report released last Thursday and up to 3 MMT of soybeans over the past few weeks.
Grains were mixed Monday as the market was open but the government and banks were closed for Columbus Day. Export inspections and crop progress are delayed until today. Chatter on the China deal was back and forth to start the week as the Chinese are requesting another meeting before signing and want assurance the next round of tariffs will not be implemented in December.
Overnight, grains were all lower. Corn finished 2 to 4 lower, soybeans and wheat 4 to 5 lower. Reports coming out according to Bloomberg that China is threatening to only make good on their pledge of $50 billion of US agriculture purchases if the United States removes all tariffs against Chinese goods that have been in place since the trade war began.
USDA announced a private sale of 142,579 MT or 5.2 MBU of soybeans sold for unknown destinations.
NOPA crush report will be out later this morning with September domestic soybean crush expected to be at 162.2 MBU compared to 168.08 in August and 160.8 in September 2018. Soybeans are near their high from this past summer but meal is still some $27/T lower than the peak price back in June. Meal demand is of course off worldwide with the spread of African swine fever. Soyoil though has been in high demand with prices rallying since early May. The NOPA crush report expects to show only 1.32 billion pounds of soyoil stockpiles compared to 1.401 billion at the end of August and 1.531 billion pounds at the end of September 2018.
Weather this week appears to finally be “fall-like” except in the Dakotas where temps remain below normal. Heavy rains are expected heading into next week for much of the Southeast and Corn Belt. The 6 to 10 day outlook showing below normal temps in the West and above normal for the Plains and East with above normal precipitation coming back in for all except in the Southwest.
December corn hitting a new 2-month high at $4.02 ½ on Monday with support at $3.82 and resistance up near $4.20. November soybeans within 2 ½ cents of matching the high from this past summer at $9.48 with support at $9.20. December KC wheat with support at $4.00 and resistance up at $4.30. December Chicago wheat with support at $4.91 and resistance at $5.15. December MPLS wheat with support at $5.36 and resistance up at $5.60. December soybean meal following soybeans higher with support at $302 and resistance at $320.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700