Date: December 23rd, 2019
Cattle futures were mixed on Friday but lower for the week. Cash feedlot trade though was steady to $1 higher at $120 live and $194 dressed. USDA’s Cattle on Feed report was neutral to bearish Friday after the close. On feed as of December 1st at 102% vs. a year ago which matched pre report expectations. Placements into feedlots though in November were 105% vs. last year as expectations were only 101%. Marketings were also a little light at 97%.
China continues to source protein throughout the world. Last week, Tyson began ramping up for poultry exports to China. China reported November pork imports at 230,000 MT, the highest monthly total since 2016. They have also lifted the 20 year ban on beef from Japan.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 12/20/2019
RECEIPTS: Auctions Direct Video/Internet Total
This week: 223,000 45,500 14,000 282,500
Last week: 347,200 34,400 1,900 383,500
Year Ago: 183,800 16,900 4,000 204,700
Compared to last week, steers and heifers sold 2.00 to 4.00 higher with a few instances of 5.00 to 6.00 higher. Demand was good for many calves with very good demand for all yearlings offered. This was the last marketing opportunity for 2019 as a majority of auction barns will be closed until after the New Year’s holiday. Moisture is in the forecast for areas of the southern Plains and Gulf coast regions in the coming week while adequate moisture is still needed in winter wheat production areas.
For the week, Friday December 13th through Friday December 20th, December Live Cattle -$.15, February -$1.75, January Feeder Cattle -$1.40, March -$1.87, February Lean Hogs +$1.17, April +$1.27. Boxed Beef, Choice -$6.59 @ $209.70, Select -$3.21 @ $201.03. Pork Carcass Cutout -$5.34 @ $76.54.
Cattle slaughter from Friday estimated at 116,000 head, down 6,000 from the week previous and from last year. For the week, 668,000 head, up 6,000 from the week previous and up 8,000 from last year.
Hog slaughter from Friday estimated at 486,000 head, down 1,000 compared to the week previous but up 12,000 compared to a year ago. For the week, 2,810,000 head, up 52,000 compared to the week previous and up 71,000 compared to a year ago.
Boxed beef cutout values steady to firm on moderate demand and offerings for a total of 117 loads sold.
Choice Cutout__209.70 +.71
Select Cutout__201.03 +.04
CME Feeder Index__146.26 +.51
CME Lean Hog Index__59.90 -.33
Pork Carcass Cutout__76.54 -.17
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__47.26 -.06
National Wtd Avg Live Price__36.98 no comparison, Wtd Avg Carcass Base__47.81 +.03
December live cattle holding strong above $122 this past week with resistance next up near the $124 area and the 20-day moving average is providing support now at $120.80 January feeders hit resistance around $146.60 early last week but then fell under technical pressure when it was not able to break through with support right around $143. February lean hogs still holding the lower trend that has been in place since mid-April with support around $69.50 and resistance at $72.40 then $76.60.
Grains held gains for the week still supported by optimism over Phase 1 of the U.S./Chinese trade deal moving forward as well as official signing in the U.S. House of the USMCA. Trade remains the most critical demand factor this marketing year to try and pull down supplies and support higher prices. The next couple weeks could be light volume holiday trade with the markets closed mid-week on both Christmas and New Year’s Day.
For the week, Friday December 13th through Friday December 20th, March Corn +$.06 ¾, May +$.06, January Soybeans +$.20 ¾, March +$.16 ¾, March KC Wheat +$.19 ½, July +$.20 ½, March Chicago Wheat +$.09 ¾, July +$.11, March MPLS Wheat +$.11, January Soybean Meal +$1/T.
Overnight, grains were firm with corn finishing steady to fractionally higher, soybeans 2 higher and wheat 2 to 3 higher.
USDA announced a private sale of 126,000 MT or 4.6 MBU of soybeans sold to China this morning. USDA also reported changes in destinations of 220,500 MT or 8.1 MBU of soybeans from unknown destinations to the Netherlands for 5.7 MBU and Saudi Arabia for 2.4 MBU.
Soybean spreads continue to firm and basis remains strong for most domestic crush plants. Some may be looking to secure enough volume to get through the holidays but I have seen some already pushing for January forward delivery.
One to two inch rains fell over good swaths of Argentina and Brazil over the weekend. The forecast for the next week looks beneficial to crops there with mild temps and a couple chances for scattered rain. This week’s U.S. weather holding to mild conditions with snow in the Rockies and heavy rain for a portion of the Southern Plains towards the end of the week. The 6-10 day outlook showing below normal temps in the Southwest, above normal for the rest of the U.S. with above normal precipitation stretching from the Southwest up through the Corn Belt and below normal for the West Coast.
March corn breaking the lower trend with resistance holding this past week at $3.90 and support at $3.80. January soybeans hit resistance around $9.30 this past week with support at $9.12. 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 $5.25 and resistance up at $5.57. January soybean meal still holding a lower trend with the contract low down at $292.60 and resistance around $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