Date: November 13th, 2019
Feeder cattle into new highs, fats testing last week’s new recent highs and lean hogs triple digits higher yesterday. Pork prices continue to rally but cash hogs have slipped lower this past week. Cattle futures were able to reach higher during the trading sessions but settle mixed as again finding direction early in the week is a challenge. Beef prices continue to soar higher as cash plays catch up now for these past couple months. The Fed Cattle Exchange online auction will be held later today with 1,393 head consigned compared to last week’s 1,684 head of which 119 sold at $115 in KS.
Packers purchased 25,000 more head than a week ago for the 1-15 day delivery at nearly 100,000 head. Packers appear to have confidence in the stability of cattle prices at this level and it also shows they are doubtful purchasing cattle at $5 under the December board will continue to be possible. The price level of these purchases combined with the current selling prices of boxed beef will deliver to processors the largest margins since the week following the Tyson fire and likely the largest margins for the balance of this year.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 11/11/2019
Total Receipts: 6,931 Last Week: 6,423 Last Year: 3,030
Compared to last week, steers under 700 lbs steady, steers over 700 lbs steady to 4.00 higher, heifers under 650 lbs 3.00 to 5.00 lower, over 650 lbs unevenly steady. Demand moderate to good, supply heavy.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 11/11/2019
Total Receipts: 8,206 Last Week: 11,269 Last Year: 8,642
Compared to last week: Feeder steers and steer calves steady to 4.00 lower. Feeder heifers 4.00-5.00 lower. Heifer calves mostly 2.00 lower. Demand moderate to good.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 11/11/2019
Total Receipts: 2,938 Last Week: 4,678 Last Year: 2,723
Compared to last week: Freezing rain and snow across the trade area kept receipts low. Steer calves mostly steady. Feeder steers 4.00-6.00 lower, in a light test. Heifers 7.00-9.00 lower also in a light test. Demand good. Quality average thru good. Slaughter cows 3.00-5.00 higher, in a light test. Slaughter bulls had too few receipts to establish a trend.
Cattle slaughter from Tuesday estimated at 119,000 head, matching last week but down 1,000 from last year. Hog slaughter from Tuesday estimated at 492,000 head, up 1,000 compared to a week ago and up 8,000 compared to a year ago.
Boxed beef cutout values higher on Choice and sharply higher on Select on moderate to good demand and light to moderate offerings for a total of 92 loads sold.
Choice Cutout__240.50 +1.91
Select Cutout__216.23 +2.54
CME Feeder Index__147.25 +.73
CME Lean Hog Index__58.94 -.50
Pork Carcass Cutout__88.53 +2.19
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__42.55 -.03
National Wtd Avg Live Price__35.51 -3.67, Wtd Avg Carcass Base__42.69 +.10
December live cattle into a new 6-month high at $120.32 last week with resistance up near $124 and support first at $118 then $116.40. November feeders hit a new 5-month high at $149.40 but has since stalled out. This also is right at the 62% retracement level from the mid-April high at $161.85 down to the September low at $127.55 with nearby support near $145. January forward though have continued to rally hitting new recent highs yesterday. The Janaury contract topped at $147.77, with resistance at $148 and support down at $143.60. December lean hogs holding the lower trend that has been in place since mid-April with support at $63 and resistance at $67.50.
KC wheat actually led the grains higher yesterday, pulling the other wheat contracts with it and corn while soybeans traded both sides of unchanged but held firm not the follow the rally. South American weather has improved recently, pressuring the soybean market as world demand is still in question with expansion of the African swine fever in SE Asia.
Export inspections for the week ending November 7th were impressive for soybeans at 48.9 MBU compared to needed to average 32.4 MBU per week. Wheat shipments also above average at 19.4 MBU. Grain sorghum shipments at 1.0 MBU is below average and corn still disappointing at 22.1 MBU. USDA decreased the corn export estimate last week another 50 MBU to 1.850 MBU meaning we need to average nearly 40 MBU per week for the rest of year!
USDA reported corn harvest at 66% complete, up 14% last week but still under expectations. This compares to 83% complete last year and 85% 5-year average. The furthest behind…IA 64%, MN 63%, SD 39%, MI 33%, WI 30% and ND only gaining 5% from last week to now 15% harvested.
Soybean harvest up 10% to now 85% complete compared to 87% complete last year and 92% average. States still behind include KS at 83%, MI and ND at 74%, MO at 72%, and WI at 71%. Grain sorghum harvest is 88% compared to 72% last year and 80% 5-year average.
Winter wheat planted now 92% compared to 88% last year and 92% 5-year average. Emergence is at 78% compared to 76% last year and 81% average. Conditions down 3 points to 54% rated good to excellent and 13% poor to very poor right in line with a year ago, 54% good to excellent and 12% poor to very poor last year.
Overnight, grains were weaker with no follow through for wheat. Corn finished 1 to 2 lower, soybeans 1 lower and wheat 2 to 4 lower.
USDA announced a private sale of 106,000 MT or 3.9 MBU of soybeans for delivery to unknown destinations. There have been rumors this week that China may purchase a few more cargoes of soybeans but it appears there are still 2 MMT or over 73 MBU of soybeans still awaiting to be offloaded at Chinses ports due to storage space and tariff clarification. Ethiopia postponed their tender for 600,000 MT or 22 MBU of wheat along with South Korea postponing their tender for 250,000 MT or 9.2 MBU of non-GMO soybeans.
Brazil’s CONAB reported this morning only minor changes to their crop production estimates, USDA made no changes last week, yet still considerably lower than USDA. Their corn production estimate was decreased .02 MMT to 98.37 MMT compared to USDA at 101 MMT. Their soybean production estimate was increased .47 MMT to 120.86 MMT compared to USDA at 123 MMT.
Below normal temps continue to shift east this week with more seasonal temps the balance of this week for the Central Plains into early next week for the eastern half of the U.S. The 6 to 10 day outlook has above normal temps for the western half of the U.S. with normal temps east except for the Southeast. Precipitation forecasts picking up though with above normal centered in the Southwest and up through the Plains and Western Corn Belt with below normal on the West Coast and Southeast.
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 holding at $3.72 ½ this week. January soybeans peaked at $9.59 ½ mid-October which matches the highs from earlier this summer. Now holding a lower trend with support at $9.13 and resistance at $9.42. December KC wheat into a new 3-month high yesterday at $4.39 ¼, $4.39 touched in the overnight as well with support at $4.18 and resistance up at $4.44. December Chicago wheat still holding a higher trend as well with support at $5.01 and resistance at $5.35. December MPLS wheat with support at $5.15 and resistance up at $5.32. December soybean meal with support at $299 and resistance up near $306.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700