Date: October 28th, 2019
Cattle futures finished the week higher as higher cash feedlot trade started mid-week. Trade in KS and TX was reported at $110 to $111 live, $1 to $2 higher than the week previous. In the North, trade was reported at $110 to $112 live which was $1 higher and mostly $175 on a dressed basis which was steady to $2 higher.
Cattle on Feed as of October 1st at 11.3 million head was still friendly coming in at 99% vs. a year ago but mildly bearish vs. the pre report estimates. Placements in feedlots during September totaled 2.09 million head, 2 percent above 2018, and slightly larger than expected. Marketings of fed cattle during September totaled 1.74 million head, 1 percent above 2018, which was in line with expectations. One less business day in September 2019 versus 2018 makes the 101% monthly marketing in September 105.5% in actual daily marketings.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 10/25/2019
RECEIPTS: Auctions Direct Video/Internet Total
This week: 290,200 33,700 32,700 356,600
Last week: 274,000 44,000 2,100 320,100
Year Ago: 357,700 57,600 16,500 431,800
Compared to last week, yearling steers and heifers sold uneven; 3.00 lower to 1.00 higher. Steer and heifer calves sold 1.00-4.00 lower. Good demand remains for yearlings. Colorado, Kansas, and the Texas Panhandle received an early snow late this week with widespread areas expecting temperatures next week to be 15-20 degrees below normal, leaving unweaned, non-conditioned calves in light demand. Potential health risks have kept most buyers at bay for calves. However, preconditioned long-time weaned calves did attract much more of the buyers attention creating wide price spreads.
For the week, Friday October 18th through Friday October 25th, October Live Cattle +$1.50, December +$2.45, October Feeder Cattle +$2.20, November +$2.52, December Lean Hogs -$3.02, February -$4.12. Boxed Beef, Choice +$7.40 @ $225.44, Select +$6.80 @ $199.84. Pork Carcass Cutout -$.47 @ $76.56.
Cattle slaughter from Friday estimated at 108,000 head, up 1,000 from the week previous and from last year. For the week, 640,000 head, up 1,000 from the week previous and up 5,000 from last year. Beef production estimated at 526.1 million pounds compared to 525.4 million the week previous and 521.0 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 478,000 head, down 5,000 compared to the week previous but up 14,000 compared to a year ago. For the week, 2,693,000 head, down 33,000 compared to the week previous but up 130,000 compared to a year ago. Pork production estimated at 568.3 million pounds last week compared to 574.0 the week previous and 541.8 million last year. Pork production is up 4.3% compared to a year ago with slaughter up 3.7%.
Boxed beef cutout values steady to firm on moderate demand and offerings for a total of 83 loads sold.
Choice Cutout__225.44 -.18, +7.40 for the week
Select Cutout__199.84 +.75, +6.80 for the week
CME Feeder Index__144.73 -.23
CME Lean Hog Index__65.09 -.40
Pork Carcass Cutout__76.56 +2.03
IA-S.MN Wtd Avg Live Price__40.78 no comparison, Wtd Avg Carcass Base__52.57 -.88
National Wtd Avg Live Price__42.08 -1.18, Wtd Avg Carcass Base__53.10 -.68
October live cattle expire later this week with a recent high up at $112.50. The December contract will become the front month on Friday and still carrying a premium to October. December hit a new 6-month high at $116.22 with resistance up near $124 and support first at $114.20 then $110. October feeders also expire later this week matching the recent high at $146.40. November feeders holding a higher trend since early September with support around $142 and resistance up at $146.80. December lean hogs holding the lower trend that has been in place since mid-April with support at $63 and resistance at $69.
Grains finished mixed on Friday with soybeans down double digits yet corn only down a half cent and wheat able to hold small gains. Soybeans collapsed due to no follow through from China last week and comments lacking support or details from US trade reps as to Phase 1 of the trade deal. Corn futures were mixed all week, fairly quiet recently as soybeans have taken the leadership role as of late. Wheat will struggle moving forward without help from the fall crops or a big sale into China.
For the week, Friday October 18th through Friday October 25th, December Corn -$.04 ¼, March -$.05 ¼, November Soybeans -$.13 ¾, January -$.13, December KC Wheat -$.11, March -$.10 ¼, December Chicago Wheat -$.14 ½, March -$.13 ½, December MPLS Wheat -$.07 ¾, March -$.07, December Soybean Meal -$5.20/T.
Overnight, grains were mixed with corn 2 lower, soybeans 3 higher and wheat steady to 4 lower.
Argentina has a new President after this past weekend’s elections. Most see the populist Fernandez leaning towards an increase in export taxes which could slow down Argentine Ag exports and benefit specifically U.S. corn exports. Corn exports this current marketing year have been disappointing and already lag last year’s pace by nearly 200 MBU. Weekly export inspections will be out later this morning.
USDA announced a private sale of 135,000 MT of soybean meal to the Philippines this morning.
This week features well below normal temps for most of the U.S. with rain, snow and wintry mix. The 6 to 10 day outlook showing continues to show below normal temps for all except CA and FL but below normal precipitation after this week’s systems move through.
December corn breaking the higher trend that started in early September, now holding a lower trend since the October high at $4.02 ½ with support down around $3.80. November soybeans holding the higher trend with support at $9.19 then $9.08 and resistance up at $9.45. December KC wheat with support at $4.17 and resistance up at $4.37. December Chicago wheat with support at $5.03, resistance at $5.35 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 $301 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