Date: December 30th, 2019
Cattle futures finished mixed to end the week but with the strong gains last Thursday were able to hold gains when compared to a week ago. Cash feedlot trade was mostly inactive, only light volume trade at $122 live which was $2 higher than a week ago heading into Friday. Their certainly hasn’t been any rush by feedlots as the December contract is $3+ premium to last week’s cash, and expiring Tuesday, along with the carry to the February contract of another $3+ providing support for higher prices as well. Friday’s cash feedlot trade ended up $4 higher at $196 dressed in the North and $2 higher at $122 live in the South.
Lean hog futures were mixed all week with little movement to far from unchanged. The U.S. hog supply is still burdensome and keeping pressure on prices but hope is building that China will soon be turning the corner and begin rebuilding their hog herd. Until then, China will continue to be a major protein importer which is supportive for continued U.S. meat exports.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 12/27/2019
RECEIPTS: Auctions Direct Video/Internet Total
This week: 5,300 16,400 0 21,700
Last week: 223,000 45,500 14,000 282,500
Year Ago: 0 0 0 0
Compared to last week, steer and heifers were lightly tested on a national basis this week due to limited receipts as the majority of auctions were closed for the holidays.
For the week, Friday December 20th through Friday December 27th, December Live Cattle +$1.27, February +$.90, January Feeder Cattle +$1.27, March +$.42, February Lean Hogs -$.10, April +$.37. Boxed Beef, Choice -$.74 @ $208.96, Select +$3.54 @ $204.57.
Cattle slaughter for the week estimated at 468,000 head, down 200,000 from the week previous but up 26,000 from last year. Beef production year to date up .6% with slaughter up 1.2%. Hog slaughter for the week estimated at 2,034,000 head, down 776,000 compared to the week previous but up 132,000 compared to a year ago. Pork production up 4.7%, slaughter up 4%.
Boxed beef cutout values weak to lower on light demand and moderate offerings for a total of 113 loads sold.
Choice Cutout__208.96 -1.19
Select Cutout__204.57 -.68
CME Feeder Index__144.61 -1.20
CME Lean Hog Index__59.03 -.09
Pork Carcass Cutout__75.04 -.74
IA-S.MN Wtd Avg Live Price__38.43 +.32, Wtd Avg Carcass Base__49.23 +.44
National Wtd Avg Live Price__38.63 +.53, Wtd Avg Carcass Base__49.06 +.39
December live cattle into a new recent high on Friday at $123.87 with the contract high at $124.17 from April and the 10-day moving average providing support now at $122.50. January feeders hit resistance around $146.60 back on December 13th then fell under technical pressure when it was not able to break through with support holding just above $143. February lean hogs still holding the lower trend that has been in place since mid-April with support at $69 and resistance being tested around $71.50.
Wheat continued to lead the grains higher on Friday, corn remains stuck in a sideways trading pattern with the nearby March contract near the $3.90 mark and soybeans reached a new recent high on Friday but were unable to hold gains. Weekly changes though for all the grains were higher. Weekly export sales Friday morning were bullish for wheat but only mediocre for corn and soybeans. Volume remained fairly light after the markets were closed Christmas Day and should be light again this week as the markets close again on Wednesday for New Year’s Day.
For the week, Friday December 20th through Friday December 27th, March Corn +$.02 ¼, May +$.02 ¾, January Soybeans +$.01 ¼, March +$.03 ¼, March KC Wheat +$.17, July +$.17 ¾, March Chicago Wheat +$.14, July +$.11, January Soybean Meal -$2.50/T.
Overnight, grains were firm led by soybeans gaining back all of their losses from Friday. Corn finished 1 higher, soybeans 7 to 8 higher and wheat 2 to 6 higher.
First notice day for January soybeans is tomorrow. If you are long make sure and roll or exit today, if you are short, you have a few more days but daily limits will not be in place any longer and volume will be thinning.
Rumors swirling this morning that China’s trade negotiators will travel to Washington D.C. this week to sign Phase 1 of the trade deal. This is unexpected and good news for the markets as expectations were the signing would not take place until mid-January.
Snow blanketed an area from central NE up through the eastern half of ND and northern MN. Heavy snow or rain expected heading into the New Year for the PNW, Great Lakes and Southeast. The 6-10 day outlook showing below normal temps for the western half of the U.S. and normal temps for everyone else with above normal precipitation across the Northern Border States and below normal in the South.
March corn did break higher to the $3.91 on Friday but settled right at the resistance level holding since mid-December at $3.90, above $3.91 overnight with support at $3.80. January soybeans into a new recent high on Friday at $9.41 ½ but ending with a key reversal lower with support down at $9.20. March KC wheat into new recent highs with resistance next up near $4.90 and support at $4.65. March Chicago wheat still trending higher with support at $5.38 and resistance up at $5.73. 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