Date: October 23rd, 2019
Livestock and grain futures were all over the place yesterday. Rumors overnight then reports out of China that they had meetings with importers and were looking to issue tariff free quota for crushers to purchase 10 MMT or 367 MBU of U.S. soybeans was very supportive early on. Grains were higher overnight, beans up double digits, and lean hogs were showing bids before the open at limit higher. When the markets opened at 8:30 though, December lean hogs opened less than $1 higher, cattle mixed to lower while grains were higher but not showing any strength. In the end, hogs finished triple digits lower, live cattle mixed, feeders held gains and grains were mixed which was all disappointing.
Cash feedlot trade so far this week is limited to the North on light volume at $173 dressed which matches the bottom end of the range from last week. Fed Cattle Exchange with only 231 head consigned for the online auction later today. After the close, USDA released its monthly cold storage report which was friendly. Total frozen poultry supplies on September 30, 2019 were down 1% from the previous month and down 5% from a year ago. Total red meat supplies in freezers were down 2% from the previous month and down 4% from last year with beef down 1% from the previous month and down 8% from last year while pork supplies were down 1% from the previous month but up 2% from last year.
Cattle on Feed report to be released this Friday afternoon, with early expectations positive. The early estimates for the On Feed total on October 1 range from 98% of a year ago up to 99.3%. Placements in September are expected between 97% and 104.2% with and average at 102%. Marketings in a range from 100.3% up to 101.2% and with one less business day in September this year versus last that equates to about 4.5%. That means if the monthly number comes in at 101%, the true daily marketing rate would be around 105.5%.
Cattle slaughter from Tuesday estimated at 119,000 head, up 1,000 from the week previous but down 1,000 from last year. Hog slaughter from Tuesday estimated at 492,000 head, up 2,000 compared to the week previous and up 18,000 compared to a year ago.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 10/21/2019
Total Receipts: 5,659 Last Week: 6,788 Last Year: 5,728
Compared to last week, steer and heifer calves 3.00 to 7.00 lower, yearlings steady. Few buyers with calf orders, most interested in yearlings. Demand moderate to light for unweaned calves, moderate to good for long time weaned calves and yearlings, supply moderate.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 10/21/2019
Total Receipts: 9,984 Last Week: 7,762 Last Year: 7,033
Compared to last week: Feeder steers steady to 2.00 higher. Feeder heifers trading unevenly steady. Steer calves 1.00-3.00 lower and heifer calves steady to 2.00 lower on calves over 450 lbs. Lighter weight calves not well tested, but a higher undertone was noted.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 10/21/2019
Total Receipts: 4,571 Last Week: 4,401 Last Year: 4,058
Compared to last week: Steers 3.00-4.00 lower. Heifers 5.00-7.00 lower. Quality good. Demand good. Slaughter cows 7.00-9.00 lower. Slaughter bulls 5.00-7.00 lower.
Boxed beef cutout values higher on Choice and sharply higher on Select on moderate to good demand and offerings for a total of 105 loads sold.
Choice Cutout__220.93 +.80
Select Cutout__198.08 +3.64
CME Feeder Index__144.96 -1.00
CME Lean Hog Index__65.47 -.06
Pork Carcass Cutout__76.10 -2.43
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__56.35 -1.04
National Wtd Avg Live Price__44.69 -.40, Wtd Avg Carcass Base__56.26 -.85
October live cattle topped out at $112.50 for three consecutive days last week. Since, the contract has found support from $109.55 to $109.70. The 2-month long higher trend is still in place with the contract set to expire next week. The December contract will become the front month and still carrying a premium to October with support down at $110 and resistance building strength the past few days from at $114.20 to $114.42. October feeders still holding the higher trend with support at $140.50 and resistance at $146.40. October feeders also expire next week with the November contract then becoming the front month. The November contract has support at $140.50 and resistance at $146.80. December lean hogs unable to break the lower trend that has been in place since mid-April with support near $63 and resistance at $70.
Grains continue to look for new, fresh news but the back and forth on China continues to remain the mover until some additional fundamental news can garner more attention. Soybeans raced higher to test recent highs but were unable to break through while soybean oil hit new 7-month highs. China was actively buying new crop soybeans from Brazil last week. If they do commit to the 10 MMT from the U.S. that should give them enough with current outstanding sales to bridge the gap from now until March when Brazil soybeans will be available again. The US$ has been weaker this month, breaking the long term uptrend that started back in June. It is still not enough to win any corn business back from Ukraine or Brazil along with firmer U.S. basis values across the nation. Wheat is trying to hold off from a collapse which would break the higher trends that have been in place since September. U.S. wheat still cannot compete with Black Sea origins but has been competitive into SE Asia. The other major exporter in that area is Australia which is still suffering from drought with private production estimates now coming in as low as 15 MMT compared to USDA last month dropping 1 MMT to 18 MMT.
Overnight, grains were mixed as still no confirmation in regards to China buying U.S. beans and news overall was light. All grains finished 1 to 2 lower.
USDA announced a private sale this morning of 128,000 MT or 4.7 MBU of soybeans for unknown destinations. Algeria purchased 600,000 MT or 22 MBU or mill grade wheat, most likely from France, while Tunisia purchased 75,000 MT or 2.75 MBU of optional origin milling quality soft wheat.
Heavy rains still in the forecast heading into the weekend for the Southeast and cold temps start creeping in from the Northwest. The 6 to 10 day outlook showing well below normal temps for all except the Southeast and above normal moisture for all except the PNW.
December corn still barley holding a higher trend with support at $3.85 and resistance up at $4.02 ½. November soybeans again back up to $9.45 area yesterday, the high from this past summer at $9.48, with support at $9.27 then $9.18. December KC wheat with support at $4.00 and resistance up at $4.37. December Chicago wheat with support at $5.03 and resistance at $5.53. December MPLS wheat with support at $5.31 and resistance up near $5.60. December soybean meal with support at $305 and resistance near $314.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700