Date: December 16th, 2019
Cattle futures finished triple digits higher and throughout the entire grain and livestock complex the only to finish strong. All other commodities faded from early morning gains as the Phase 1 U.S./China deal continues to be murky and incomplete. Cash feedlot trade was light all week at $118 to $119 live and $188 dressed. Volume picked up Thursday in TX and KS at $119 live. In the North, live trade topped out at $122 live and $190 dressed, both $2 to $3 higher than the week previous.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY–WEEK ENDING 12/13/2019
RECEIPTS: Auctions Direct Video/Internet Total
This week: 347,200 34,400 1,900 383,500
Last week: 286,900 26,000 56,700 369,600
Year Ago: 257,900 36,700 26,400 321,000
Compared to last week, steers and heifers sold steady to 3.00 lower. With the holidays and end of the year fast approaching, many auction barns had heavy runs this week as marketing opportunities will be limited after next week. Demand was moderate to good in most regions as cattle feeders look to fill orders to take advantage of the market reflected in the 2020 CME Live cattle contracts. Demand for yearlings continues to be strong.
For the week, Friday December 6th through Friday December 13th, December Live Cattle +$2.17, February +$2.57, January Feeder Cattle +$4.12, March +$4.57, February Lean Hogs +$1.95. Boxed Beef, Choice -$8.27 @ $216.29, Select -$3.06 @ $204.24. Pork Carcass Cutout -$.20 @ $81.88.
Cattle slaughter from Friday estimated at 122,000 head, up 1,000 from the week previous and up 1,000 from last year. For the week, 662,000 head, down 17,000 from the week previous but up 8,000 from last year.
Hog slaughter from Friday estimated at 492,000 head, up 4,000 compared to the week previous and up 15,000 compared to a year ago. For the week, 2,763,000 head, down 36,000 compared to the week previous but up 154,000 compared to a year ago.
Boxed beef cutout values firm to higher on moderate demand and moderate offerings for a total of 127 loads sold.
Choice Cutout__216.29 +.64
Select Cutout__204.24 +1.68
CME Feeder Index__143.40 +.09
CME Lean Hog Index__59.88 +.16
Pork Carcass Cutout__81.88 +.22
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__47.94 unchanged
National Wtd Avg Live Price__36.74 +.38, Wtd Avg Carcass Base__47.77 +.80
December live cattle hit a new recent high at $122.62 Friday with resistance up near $124 and the 20-day moving average providing support now at $120. January feeders broke the month long lower trend with resistance at the November high of $147.77 and support at $140. February lean hogs still holding the lower trend that has been in place since mid-April with support around $65.50 and resistance at $72.40 then $76.60.
Grains did finish higher and higher for the week but Friday’s session was concerning as highs were hit early in the morning and then faded throughout the day. Details are sketching yet again and this the second time there has been an agreement in principle on Phase 1 of the trade deal between the U.S. the China. Hopefully it will not all be lost in translation, overall it appears China still wants rollback on tariffs and the U.S. wants firm commitments on additional Ag export business.
For the week, Friday December 6th through Friday December 13th, March Corn +$.04 ¼, May +$.05 ½, January Soybeans +$.18, March +$.17 ¾, March KC Wheat +$.11 ¾, July +$.09 ¾, March Chicago Wheat +$.08, July +$.07 ¾, March MPLS Wheat +$.13 ¾, January Soybean Meal -$2.40T.
Overnight, grains were higher with corn finishing 3 to 5 higher, soybeans 9 higher and wheat 6 to 10 higher.
The markets are feeling a little more confident in the trade deal with details coming from the U.S. and confirmation from the Chinese although the amount of U.S. goods to be purchased as yet to be stated by China. Signing of the deal is slated now for January 20th.
Also supporting the market overnight, Argentina increased export taxes on soybeans, corn and wheat by 5%. Argentina has been very competitive on corn this past year and increasing the export tax is supportive for U.S. values.
This week’s weather back to mild conditions for the week over the Plains and heavy snow for the Eastern Corn Belt with heavy rain in the Southeast. The 6-10 day outlook showing normal to above normal temps across the U.S. with above normal precip on the West Coast and Southwest and below normal from the Plains to East Coast.
March corn breaking the lower trend with resistance next up around $3.92 and support at $3.78. January soybeans hitting resistance at $9.17 last Friday and overnight with support at $8.93. March KC wheat holding the higher trend with support at $4.23 and resistance up near $4.60. March Chicago wheat still trending higher with support at $5.20 and resistance up at $5.46. January soybean meal still holding a lower trend with the contract low down at $292.60 and resistance 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