Date: October 16th, 2019
Livestock futures were again mixed yesterday but mostly higher, the nearby December Lean Hog futures contract settled at the $3 limit higher. Cattle futures continue to search for direction ahead of any cash feedlot trade, typical for Monday and Tuesday trade over the past few weeks. The Fed Cattle Exchange online auction will be held later today with 768 head consigned compared to last week’s 666 head of which none sold with offers from $108 to $109.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 10/14/2019
Total Receipts: 4,401 Last Week: 2,589 Last Year: 2,386
Compared to last week: Steers 4.00-6.00 higher. Heifers 3.00-5.00 higher. Demand good. Quality plain thru attractive. Slaughter cows mostly steady to 1.00-2.00 higher. Slaughter bulls also mostly steady, however 1.00-2.00 lower.
OKC West Livestock Auction – El Reno, OK
Livestock Weighted Average Report for 10/15/2019 – Preliminary
Receipts: 2,500 Last Week Total: 8,307 Last Year: 3,920
*** Final report including feeder cattle will be released later today ***
Compared to last Tuesday: Long weaned steer and heifer calves sold mostly steady, unweaned fleshier calves sold with a lower undertone. Demand moderate to good. Quality plain to average, few attractive.
Cattle slaughter from Tuesday estimated at 118,000 head, up 1,000 from last week but down 3,000 from last year. Hog slaughter from Tuesday estimated at 490,000 head, up 1,000 compared to last week and up 11,000 compared to a year ago.
Boxed beef cutout values higher on Choice and sharply higher on Select on moderate to good demand and moderate offerings for a total of 160 loads sold.
Choice Cutout__218.02 +.80
Select Cutout__191.48 +2.15
CME Feeder Index__145.09 +.83
CME Lean Hog Index__62.92 +.81
Pork Carcass Cutout__78.06 +.12
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__59.82 +.84
National Wtd Avg Live Price__45.36 +.82, Wtd Avg Carcass Base__56.81 +1.08
October live cattle continue to rally, into a new 5-month high at $111.10. 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. Yesterday’s limit higher move, if follow through is seen today could take out the long term lower trend.
Grains pulled back some yesterday with more bearish news than bullish yet still not collapsing. China 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. Export inspections for the week ending October 10th continue to disappoint for corn at 18.5 MBU. USDA dropped their export estimate by 150 MBU to now 1.9 BBU yet we still need to average 38.7 MBU per week to hit the estimate. Soybean, wheat and grain sorghum shipments were all near the expectations and the average per week needed. Soybeans totaled 35.1 MBU, wheat 17.0 MBU and grain sorghum 1.5 MBU. NOPA crush was well below expectations at only 152.6 MBU crushed domestically in September vs. expectations at 162.2 and last month at 168.08. Soyoil stocks were higher than expected at 1.442 billion pounds but soymeal exports jumped to 844,584 tons vs. 699,212 last month. Crop progress still showing corn and soybean harvest behind expectations at 22% and 26% respectively. Even more concerning 73% of corn crop mature, only 53% in SD, 49% in WI, 44% in MI and 42% in ND. Spring wheat harvest is not complete sitting at 94%. Winter wheat planting is on pace now at 65% with emergence at 41%.
Overnight, grains were traded mostly lower but finished mixed. Corn finished 2 lower, soybeans steady to 1 higher and wheat steady to 2 lower.
No new headlines or news flashes yet today from the U.S. or China on getting phase 1 signed. Japan purchased a mix of wheat varieties from the U.S., Canada and Australia overnight. Australia introduced legislation that will remove tariffs and pave the way for free trade deals with Indonesia, Hong Kong and Peru.
Egypt tendering for additional wheat this morning, France, Russian and Ukraine all with competitive offers.
USDA announced a private sale of 228,600 MT or 9 MBU of corn sold to Mexico. Of the total, 5.4 MBU is delivery during this crop year and 3.6 MBU for delivery during the 2020/2021 marketing year.
Weather for the balance of this week remains “fall-like”, heavy rains still expected in the Southeast with 1” rains across the Corn Belt. The 6 to 10 day outlook showing below normal temps now for the middle of the U.S. with above normal on both coasts and above normal precipitation for the eastern half of the U.S., below normal 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 got within 2 ½ cents of matching the high from this past summer at $9.48 on Monday 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 $4.93 and resistance at $5.15. December MPLS wheat with support at $5.40, the 20, 50 & 100-day moving average have all converged there, resistance up at $5.60. December soybean meal tracking with soybeans but still nearly $30 from summer highs with support at $302 and resistance near $314 then $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