Date: December 11th, 2019
Livestock futures finished mixed yesterday while grains were higher. Light cash feedlot trade so far this week at $118 to $119 live, steady to $1 lower than last week. I would hope to see $119 to $120 trade ahead of the holidays. Fed Cattle Exchange online auction will held later today with 1,068 head consigned compared to last week’s 1,189 head of which 860 sold at a weighted average of $118.36. Boxed beef prices continue to press lower, Choice now down over $20 since peaking back at $242.34 back in mid-November.
USDA updated meat supply and demand yesterday with 2019 production expected to increase 2.85 billion pounds over 2018 and 2020 numbers are expected to be up another 2.83 billion pounds. Those figures are all higher than last month’s projections while exports for both beef and pork were reduced from a month ago.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 12/9/2019
Total Receipts: 4,202 Last Week: 2,283 Last Year: 1,670
Compared to last week: Steers 2.00-4.00 lower. Heifers 3.00-5.00 higher. Demand good.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 12/9/2019
Total Receipts: 11,973 Last Week: 6,154 Last Year: 4,893
Compared to last Monday, steer and heifer calves and yearlings steady. Demand moderate to good, supply heavy. A high percentage of weaned calves and loads of yearlings in the offering.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 12/9/2019
Total Receipts: 14,809 Last Week: 7,998 Last Year: 3,900
Compared to last week: Feeder steers and steer calves steady to 3.00 higher on improved quality from last week. Feeder heifers and heifer calves steady to 4.00 lower. Demand good for steers, moderate to good for heifers.
Cattle slaughter from Tuesday estimated at 122,000 head, up 2,000 from last week and up 1,000 from last year. Hog slaughter from Tuesday estimated at 494,000 head, down 1,000 compared to last week but up 19,000 compared to a year ago.
Boxed beef cutout values lower to sharply lower on light to moderate demand and heavy offerings for a total of 208 loads sold.
Choice Cutout__221.49 -2.15
Select Cutout__205.35 -1.14
CME Feeder Index__143.35 +.02
CME Lean Hog Index__58.12 -.37, last reported for Friday Dec 6th
Pork Carcass Cutout__83.12 +1.14
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__47.85 +1.10
National Wtd Avg Live Price__37.04 +.14, Wtd Avg Carcass Base__47.68 +.62
December live cattle hit a new recent high November 29th at $122.07 with resistance next up near $124 and now testing support at $119.70, right at the 20-day moving average. January feeders holding a lower trend that has been in place since peaking at $147.77 back on November 12th. Resistance first up at $143 with support at $140. December lean hogs expire this Friday. February holding the lower trend that has been in place since mid-April with support around $65.50 and resistance at $70.
Grains were steady awaiting the December crop report which was as expected not much at least for U.S. fall crops. USDA made no changes to the supply or demand side for U.S. corn or soybeans but did drop U.S. wheat ending stocks by 40 MBU. USDA decreased imports of Canadian HRS by 5 MBU and Durum by 10 MBU while increasing U.S. exports of HRW and Durum by 10 MBU and HRS by 5 MBU. World stocks for all three though increased with the largest swing in corn up 4.6 MMT due all to an increase in Chinese corn production. South American crop estimates were left unchanged and Australian wheat was dropped to 16.1 MMT with most private estimates looking closer to 15 MMT. Egypt purchased a total of 12.3 MBU of wheat yesterday which included 2 cargoes from France and 1 each from Ukraine, Romania and Russia.
USMCA or NAFTA 2.0, the update to the 1994 deal that has been sitting idle in the U.S. House for over a year now, finally is able to move forward. USMCA made two big revisions to the prior agreement: First it updates a lot of provisions around intellectual property, pharmaceuticals and the digital economy. Second it includes more environmental and labor protections. On the Ag side, the biggest relief is having certainty that we can continue free trade with America’s two largest agricultural export markets (Canada #1 and Mexico #2). USMCA also allows U.S. dairy farmers to sell more milk products, eggs and turkey to Canada and will allow U.S. wheat to move into Canada without automatically be downgraded to feed quality.
Overnight, grains were weaker, but fairly tight trading ranges of 2 to 4 cents. All finished the overnight in the red but corn and soybeans were only fractionally lower with wheat 1 to 2 lower. This isn’t the follow through I was hoping for and doesn’t look promising heading into the holiday season of typically lower volume and limited new news.
USDA announced a private sale of 585,000 MT or 21.5 MBU of soybeans sold to China and 140,000 MT or 5.1 MBU sold for unknown destinations. Earlier this week it was rumored that 300,000 MT were sold to China, so good to see a confirmation and the additional volume today. Taiwan is seeking 3.8 MBU of U.S. milling quality wheat in a tender to close next week. Japan is seeking a total of 6.3 MBU wheat from Australia, Canada and the U.S.
Weather for the balance of this week looks to be fairly mild with some spots of heavy snow in the Rockies and heavy rain forecasted for the Southeast into early next week. The 6-10 day outlook showing mostly normal temps with above normal precipitation in the Southeast and for the West Coast with below normal across the Northern Plains and Corn Belt.
March corn trying to break the lower trend that has been in place since mid-October with support holding from $3.75 to $3.73 and resistance from $3.83 to $3.85. January soybeans have broken the lower trend with 6 days of higher trade, but have stalled out so far this week hitting resistance at $9.03, the 38% Fibonacci retracement level. March KC wheat higher trend since early September is in jeopardy this week with support at $4.23 and resistance up near $4.50. March Chicago wheat still trending higher with support at $5.19 and resistance up at $5.46. January soybean meal into a new contract low last week at $292.60 and still holding a long term lower trend with resistance at $303.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
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