Date: November 27th, 2019
Livestock futures were mixed yesterday, with nearby feeders unable to add to Monday’s gains but deferred contracts held small gains. Live cattle contracts reached up for new recent highs. Light cash feedlot trade at $117 live, $1 higher than last week’s weighted average, has surfaced in parts of Iowa, along with a few head of dressed cattle for $184 which is steady with last week. No Fed Cattle exchange later today so we will see if cash feedlot trade can pick up ahead of Thanksgiving or wait until after.
Cattle slaughter from Tuesday estimated at 110,000 head, down 8,000 from last week and down 10,000 from last year. Hog slaughter from Tuesday estimated at 495,000 head, up 1,000 compared to a week ago and up 24,000 compared to a year ago.
Boxed beef cutout values lower on Choice and firm on Select on light to moderate demand and offerings for a total of 143 loads sold.
Choice Cutout__231.84 -1.40
Select Cutout__212.29 +.38
CME Feeder Index__144.79 -.54
CME Lean Hog Index__57.88 -.30
Pork Carcass Cutout__82.26 -1.75
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__42.49 +1.12
National Wtd Avg Live Price__34.35 -.26, Wtd Avg Carcass Base__42.47 +.69
Cash feedlot trade and winter weather should be the focus of the cattle market today although limited activity is expected heading into Thanksgiving. Heavy snow amounts in many areas of the Northern cattle country already and another round of winter weather expected through the next couple of days, selling cattle may be less of a priority than cleaning bunks and lots. Given everything else going on through the week, cash business may be quick to develop as both sides may not be willing to drag the process out through the end of the week.
December live cattle breaking the $120 barrier and hitting a new 6-month high at $120.77. Resistance next up near $124 and support at $117.70. January feeders still holding a lower trend since peaking at $147.77 back on November 12th. Resistance first up at $144.50 with support at the October low at $136.10. December lean hogs holding the lower trend that has been in place since mid-April hitting a new recent low last week at $60.05. Support next down around $58 with resistance up at $66.
Grains stayed in the red all day yesterday. Corn remains in a tight rangebound trade. Soybeans reached down for new recent lows yesterday, now the 5th consecutive lower day. Wheat futures were not able to build on Monday’s rally but higher trends still remain and resistance levels are being tested by the KC and Chicago contracts. Basis remains strong especially from domestic use while currency movement is still not helping export demand. South American weather remains favorable for corn and soybeans but is impacting wheat harvest.
Overnight, grains were firm and tight trading ranges. Corn finished fractionally higher, soybeans 1 higher and wheat steady to 2 higher.
Still no U.S. export sales activity this week. Taiwan purchased a cargo of corn from Argentina yesterday as South Korea purchased a cargo of optional origin corn. I was a part of a brief meeting yesterday with the Ambassador from Japan. He reiterated the importance of our bilateral trading partnership and appreciation for our agriculture products. The U.S./Japan trade deal will bring our tariff levels down those currently in the TPP which levels the playing the field with competition from Australia and New Zealand. It does not need congressional approve here in the U.S. like the USMCA still stuck in the U.S. house, but does in Japan. It has passed the lower house and should be moving the upper house here very soon.
This week, volume will be thinning each day, markets are closed on Thursday and reopen on Friday from 8:30 to 12:05. December grain contracts will be in delivery next week, first notice is Friday, so make sure and exit or roll all positions before delivery begins. Short positions can be held into next week without fear of delivery but starting Friday, December grain contracts will have no daily limits.
Storms still expected across the U.S. this week and heading into the early part of next week. The 6-10 day outlook now showing below normal temps heading out the East with above normal in the Southwest and above normal precipitation in the West with below normal for the Southern Plains, Southeast and Eastern Corn Belt.
December corn holding a lower trend since mid-October, rounding out a bottom or support from $3.65 to 3.70 with resistance up at $3.78. January soybeans also holding a lower trend but continue to be under pressure with support next around the $8.70 area and resistance at $9.15. December KC wheat still holding a higher trend since early September with support at $4.17 and resistance up at $4.39. December Chicago wheat also trending higher with support at $5.08 and testing resistance from $5.32 to $5.35. December soybean meal on a lower trend, breaking the support at $299 with the next at $292 and resistance up at $303.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700