Date: January 10th, 2020
Small gains for cattle futures as lean hogs were triple digits lower. Cash feedlot trade still light so far this week with only a few hundred head so far at $125 live and $198 dressed which is steady with last week.
Farmers and Ranchers Livestock Commission Co. – Salina, KS
Livestock Weighted Average Report for 1/9/2020
Total Receipts: 4,439 Last Reported 1/2/20: 3,448
Compared to last week: Steers 650-950 lbs steady to 2.00 higher. Heifers 650-1050 lbs steady to 3.00 lower. Steers and heifers 650 lbs and under higher undertone noted.
Winter Livestock – Dodge City, KS
Livestock Weighted Average Report for 1/9/2020
Total Receipts: 6,455 Last Reported 12/18/19: 2,828 Last Year: 3,395
Compared to three weeks ago: Feeder steers sold mostly 2.00 to 4.00 higher, with instances of 5.00 to 8.00 higher on reputation consignments. Feeder heifers sold mostly steady to 2.00 higher. Weaned steer calves sold mostly 2.00 to 4.00 higher, weaned heifer calves sold 4.00 to 6.00 higher. Overall, demand good to very good, quality average to attractive. Full house with active buyers for the first sale of the year. Slaughter cows sold 5.00 to 6.00 higher. Bulls sold 2.00 to 3.00 higher.
Cattle slaughter from Thursday estimated at 122,000 head, matching last week and up 1,000 from last year. Week to date now at 488,000 head, up 148,000 from last week and up 7,000 from last year.
Hog slaughter from Thursday estimated at 495,000 head, up 1,000 compared to last week and up 18,000 compared to a year ago. Week to date now at 1,987,000 head, up 601,000 compared to last week and up 88,000 compared to a year ago.
Boxed beef cutout values steady to firm on moderate to fairly good demand and heavy offerings for a total of 139 loads sold.
Choice Cutout__209.96 +.46
Select Cutout__206.68 +.15
CME Feeder Index__145.91 -.07 from January 7th
CME Lean Hog Index__59.56 +.22
Pork Carcass Cutout__72.83 +.09
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__51.70 +.49
National Wtd Avg Live Price__38.28 +.15, Wtd Avg Carcass Base__51.12 +.45
Export sales for the week ending January 2nd were light for beef but friendly for pork, shipments light for both. Net beef sales totaled 8,200 MT and shipments were only 4,500 MT. Pork sales were 26,800 MT with 7,200 sold to China and 7,100 to Mexico. Exports though were only 1,900 MT.
February live cattle still mostly sideways, just a slight uptrend with the contract high at $127.90 back on December 13th and support at $124.50. January feeders still holding a higher trend with support right around $143 and resistance just shy of $148. February lean hogs have a lower trend in place since mid-April with support at $65.40 and resistance around $72.
Corn and soybeans both finished weaker yesterday while wheat futures tested last week’s resistance. Yesterday was more of a rebalancing heading into the barrage of reports from USDA today. I would expect we see similar low volume, tight trading ranges this morning.
Overnight, grains were mixed to firm with corn and soybeans from ½ lower to ½ higher and wheat 1 to 3 higher.
Export sales were again low, but also for the week of New Year’s. Soybeans sales totaled a net 13 MBU, corn 6.4 MBU (a marketing year low), grain sorghum 791,000 BU and wheat 3 MBU this marketing year (a marketing year low) and 1.8 MBU for next year.
Average trade estimates for today’s USDA reports looking for friendly numbers. Corn harvested acres and yield are expected to be slightly lower with production down 148 MBU to 13.513 BBU. U.S. ending stocks are also projected lower at 1.757 BBU compared to 1.910 BBU in December. My concern here is export demand as it has been very disappointing so far this marketing year. It would not surprise me to see USDA drop production but also export demand for a net zero change to ending stocks. World corn stocks are projected nearly 4 MMT lower.
Soybean numbers look similar with harvested acres and yield both expected slightly lower. U.S. ending stocks are projected approximately 50 MBU lower and world stocks 1 MMT lower. USDA will also update South American production estimates with most looking for slight reductions for both Argentina and Brazil.
Wheat ending stocks are expected to be reduced again as USDA decreased 40 MBU a month ago. World stocks are also expected to be reduced. Winter wheat seedings in the U.S. will also be reported later this morning with the average trade estimate at 30.666 million acres compared to 31.159 million a year ago.
Wintry mix is expected through the Plains today and tomorrow while rain continues in the Eastern Corn Belt and Southeast. The 6-10 day outlook showing below normal temps in the west and north with above normal south and east and above normal precipitation for all expect in the Southwest.
March corn in a dime range from $3.82 to $3.92 since mid-December after breaking the lower trend that was in place since mid-October. March soybeans holding support at $9.37 with resistance at $9.61 then $9.70. March KC wheat still trending higher with support at $4.69 and resistance at $4.97. March Chicago wheat also still trending higher with support at $5.45 and resistance up at $5.67 then $5.73 ½, the high from this past summer. March soybean meal still holding a lower trend with the contract low down at $295.50 and resistance around $307.50.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700