Date: December 18th, 2019
Another mixed day for livestock futures and strong gains for the grain complex yesterday. Early gains pushed cattle contracts to test the recent highs but faded as the day progressed and corn futures began to move from steady to higher for the day. Cash feedlot markets remain fairly quiet with light volume in the Western Corn Belt trading at $120 live and $188 dressed which is even with last week’s trade. The Fed Cattle Exchange online auction will be held later this morning with 878 head consigned compared to last week’s 977 head of which none sold.
US Department of Agriculture (USDA) researchers believe they have found a vaccine against African swine fever of Georgia, according to an article published earlier this month but just now making it to mainstream media outlets. The vaccine has only been tested under controlled conditions and is still in the experimental stage, according to Pig Progress website. So far there is no vaccine or medicine against the disease.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 12/16/2019
Total Receipts: 5,354 Last Week: 11,973 Last Year: 4,342
Compared to last week, steer calves and yearlings steady, heifer calves steady to 2.00 higher. Demand moderate to good, supply moderate. A winter weather advisory for the trade area curtailed the receipts. Joplin Regional Stockyards last sale of this year will be Thursday, December 19, 2019. Selling all classes of cattle in that sale.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 12/16/2019
Total Receipts: 3,024 Last Week: 4,202 Last Year: 3,149
Compared to last week: Steers 7.00-9.00 higher. Heifers 4.00-6.00 higher. Quality mostly attractive. Demand good. Slaughter cows mostly steady. Slaughter bulls 1.00 higher. A total of 309 cows and bulls sold with 35 percent going to packers. This is the last sale for 2019. Our next Sale will be Monday January 6, 2020.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 12/16/2019
Total Receipts: 9,720 Last Week: 14,809 Last Year: 8,666
Compared to last week: Feeder steers 600-700 lbs. 1.00-2.00 lower, heavier weights trading 1.00-4.00 higher. Feeder heifers steady to 2.00 higher. Steer calves steady to 2.00 lower. Heifer calves 2.00-7.00 higher. Demand good. Quality average to attractive.
Cattle slaughter from Tuesday estimated at 123,000 head, up 1,000 from last week and up 5,000 from last year. Hog slaughter from Tuesday estimated at 494,000 head, up 6,000 compared to last week and up 15,000 compared to a year ago.
Boxed beef cutout values sharply lower on light demand and moderate offerings for a total of 152 loads sold.
Choice Cutout__212.81 -4.27
Select Cutout__203.47 -2.04
CME Feeder Index__145.10 +.49
CME Lean Hog Index__60.22 +.41
Pork Carcass Cutout__78.81 -.75
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__47.77 +.29
National Wtd Avg Live Price__38.58 +.83, Wtd Avg Carcass Base__48.10 +.06
December live cattle continue to creep into new recent highs now at $122.87 with resistance up near $124 and the 20-day moving average providing support now at $120.40. January feeders broke the month long lower trend but have yet to break through the November high of $147.77 with support down at $140. February lean hogs still holding the lower trend that has been in place since mid-April with support at $68 and resistance at $72.
Little fresh news for the grain complex yesterday yet we still managed to score new recent highs across the board. Export trade continues to be a wait and see process as the US$ has been trending lower since early October yet U.S. grain values are still mostly carrying a premium to other major exporters. No new news on Phase 1 except for China’s deputy minister of Agriculture who basically said even though China will buy some wheat, the amount will be controlled within import tariff-rate quotas (TRQs). China’s wheat TRQs for 2020 is set at 9.636 MMT, with 90% allocated to state-owned enterprises. In regards to China buying U.S. corn, it will be more of a political statement than an economic one. China likely more interested in animal proteins in the short-run anyway; Tyson gearing up to ship poultry there, likely starting in greater volumes early next year. China also looking at milo, resuming DDG imports and possibly ethanol to meet the $200B target of imported U.S. products over the next 2 years.
Overnight, grains were weaker, but traded inside yesterday’s range so far. Corn finished 1 to 2 lower, soybeans 4 to 5 lower with wheat 1 to 7 lower.
This week the U.S. House will be voting on impeachment of President Trump and finally the USMCA with both moving then onto the Senate and neither to probably be discussed there until January.
Still awaiting confirmation by USDA, but it is being reported up to 15 cargoes of U.S. soybeans have been purchased by China so far this week as part of the latest allotment of tariff free quotas issued by the Chinese government. Countries shopping for wheat this week…Ethiopia is in for 75 TMT of milling wheat, Japan for a total of 148,405 MT of Australian, Canadian and U.S. wheat, Taiwan Flour Millers is in for 104,600 MT of U.S. milling grade wheat, along with Iran, Colombia and Nigeria.
Rain and snow moving into the PNW and heavy rain out of the Southeast through this weekend with mostly mild conditions across the rest of the U.S. The 6-10 day outlook still showing normal to above normal temps across most of the U.S., below normal on the West Coast with above normal precipitation in the Southwest and Central Plains and below normal from the Southeast and Northeast.
March corn closing higher now 4 days in row and testing resistance from $3.90 to $3.92 with support at $3.80. January soybeans higher 10 of the last 11 trading sessions with resistance next up around $9.50 and support at $9.18. March KC wheat holding the higher trend with support at $4.40 and resistance up near $4.70. March Chicago wheat still trending higher with support at $5.30 and resistance next up at the highs from this past summer around $5.73. 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