Date: October 21st, 2019
Livestock futures finished the week lower as cash feedlot trade slipped lower in the South and was steady to higher in the North. The Cargill Dodge City slaughter plant that suffered an explosion last Thursday put some pressure on the cattle market. So far it appears the plant was only down for a day but still caused some nervousness to end last week. Trade in KS and TX got going Friday at $108 live, $1 lower than the week previous. In the North, trade was reported at $109 to $110 live which was steady with the week previous and $173 to $175 dressed which was $2 to $3 higher than the week previous.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 10/18/2019
RECEIPTS: Auctions Direct Video/Internet Total
This week: 274,000 44,000 2,100 320,100
Last week: 218,500 48,100 33,200 299,800
Year Ago: 270,300 25,400 27,700 323,400
Compared to last week, yearling steers and heifers sold steady to 4.00 higher. Steer and heifer calves sold uneven; 3.00 lower to 4.00 higher. The supply of feeders overall was moderate leaning towards heavy with some individual local livestock auctions having heavy supplies as the fall runs are starting to pick up. Some producers who had held off on marketing are now starting to bring cattle to town after prices have risen over the last few weeks. Very good demand for yearlings as the supply of yearlings off grass tightens and the cash fed cattle market moves higher and the futures contracts followed.
For the week, Friday October 11th through Friday October 18th, October Live Cattle +$1.02, December +$1.47, October Feeder Cattle -$.60, November -$1.40, December Lean Hogs -$1.65, February +$.42. Boxed Beef, Choice +$2.38 @ $218.04, Select +$4.36 @ $193.04. Pork Carcass Cutout -$.49 @ $77.03.
Cattle slaughter from Friday estimated at 110,000 head, down 7,000 from the week previous and down 6,000 from last year. For the week, 642,000 head, down 3,000 from the week previous but up 10,000 from last year. Beef production estimated at 527.9 million pounds compared to 529.9 million the week previous and 517.3 million last year. Beef production only up .2% compared to a year ago with cattle slaughter up 1.1%.
Hog slaughter from Friday estimated at 483,000 head, down 5,000 compared to the week previous but up 17,000 compared to a year ago. For the week, 2,726,000 head, up 31,000 compared to the week previous and up 127,000 compared to a year ago. Pork production estimated at 574.0 million pounds last week compared to 567.0 the week previous and 547.8 million last year. Pork production is up 4.2% compared to a year ago with slaughter up 3.7%.
Boxed beef cutout values steady to firm on light to moderate demand and offerings for a total of 97 loads sold.
Choice Cutout__218.04 -.07
Select Cutout__193.04 +.44
CME Feeder Index__145.60 +.45
CME Lean Hog Index__65.64 +.74
Pork Carcass Cutout__77.03 +.75
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__55.27 no comparison
National Wtd Avg Live Price__42.88 -2.02, Wtd Avg Carcass Base__56.86 -.94
October live cattle topped out at $112.50 for three consecutive days last week then the sharp reversal lower on Friday. It has been a steep higher trend now for over a month so technically a correction was due but we will see if support can hold at $108 this week. The December contract will become the front month next week carrying a premium to October. Support is down at $110 with resistance at $114.42 then $114.92. October feeders still holding the higher trend with support at $140.50 and resistance next up near $148. December lean hogs unable to break the lower trend that has been in place since mid-April with support at $66.12 and resistance just above $72.
Grains finished mixed on Friday and for the week as the damage to the fall crops from the first winter storm and freeze is still being assessed. Harvest should have progressed decently this past week so it is still positive to see firm basis levels and futures not collapsing during this time of year. Wheat was able to rally last week as private estimates for the Australian crop continue lower and world wheat prices are moving higher. Even though U.S. wheat is still not competitive into the Middle East or Northern Africa, the Egypt purchase this past week showed values in France, Russia and Ukraine moving higher which help support higher U.S. values.
For the week, Friday October 11th through Friday October 18th, December Corn -$.06 ¾, March -$.05, November Soybeans -$.02, January -$.03, December KC Wheat +$.14 ¼, March +$.14, December Chicago Wheat +$.24 ¼, March +$.23, December MPLS Wheat -$.03 ½, March -$.03 ¾, December Soybean Meal +$1.60/T.
Overnight, grains came back from early losses to finish steady to higher. Corn finished 1 higher, soybeans 4 to 5 higher and wheat steady to 1 higher.
No breaking news or new headlines on the U.S. and Chinese trade front. There is still some hope that Phase 1 of the trade deal will be signed before the two leaders meet in Chile next month. Export inspections will be out later this morning followed by the crop progress report this afternoon. Most are expecting corn harvest to be 35% to 40% complete and soybean harvest 32% to 35% complete yet over these past couple week’s progress has been overestimated.
Heavy rains this week for the Southeast with light rains across the Midwest which will delay fall harvest for many. The 6 to 10 day outlook showing below normal temps for all except the Southeast and above normal moisture for all except the PNW.
December corn still holding a higher trend with support at $3.87 ½ and resistance up at $4.02 ½. November soybeans got within 2 ½ cents of matching the high from this past summer at $9.48 last week with support at $9.27 then $9.18. December KC wheat with support at $4.20 and resistance up at $4.44. December Chicago wheat with support at $5.04, resistance at $5.43 and this past summer’s high up at $5.65 ¾. December MPLS wheat with support at $5.30 and resistance up near $5.60. December soybean meal with support at $305 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