Date: January 15th, 2020
Mixed but much quieter day for cattle futures yesterday as lean hogs charged triple digits higher. Grains were also mixed as wheat led the way higher, corn and soybeans tried to hold gains but fell short at the end. Equites were mixed along with lower gold, higher crude and a steady US$. Sounds a lot like all the markets were looking for direction in which they currently are. The Fed Cattle Exchange online auction will be held later this morning with 744 head consigned compared to last week’s 470 head of which none sold. Wednesday will still probably be too early in the week for cattle trade but will be a good indication as to how packers perceive this week’s trading shaking out. Show lists are mixed for the week, higher in Texas and most of the Northern Plains but smaller in Kansas.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 1/13/2020
Total Receipts: 6,263 Last Week: 13,074 Last Year: 6,810
Compared to last week, steers under 650 lbs 2.00 to 5.00 higher, steers over 650 lbs and heifers (all weights) steady.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 1/13/2020
Total Receipts: 11,325 Last Week: 12,702 Last Year: 9,166
Compared to last week: Feeder steers steady to 2.00 higher. Feeder heifers steady to 3.00 lower. Demand for feeder cattle is moderate to good as cattle futures trading lower. Stocker steers and steer calves 4.00-11.00 higher. Stocker heifers and heifer calves under 500 lbs 3.00- 6.00 higher; over 500 lbs 4.00 lower.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 1/13/2020
Total Receipts: 2,027 Last Week: 4,194 Last Year: 2,183
Compared to last week: Steer and heifers over 450 lbs traded 2.00-6.00 higher, under 450 lbs 1.00-3.00 lower. Slaughter cows sold 3.00-5.00 lower on limited offerings.
Cattle slaughter from Tuesday estimated at 123,000 head, matching last week and up 2,000 from last year. Hog slaughter from Tuesday estimated at 497,000 head, also matching last week and up 18,000 compared to a year ago.
Boxed beef cutout values higher on good demand and light to moderate offerings for a total of 120 loads sold.
Choice Cutout__212.76 +2.21
Select Cutout__210.30 +2.07
CME Feeder Index__146.51 +.05
CME Lean Hog Index__59.00 +.01
Pork Carcass Cutout__74.29 +.05
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__51.73 +.85
National Wtd Avg Live Price__39.74 -.19, Wtd Avg Carcass Base__51.56 +.97
February live cattle are still trending higher but mostly sideways since November with support at $126 then $124.50 and the contract high from mid-December up at $127.90. January feeders showing a higher trend but unable to break through the $147.80 area, tested now 3 times in the past 2 months, support is down at $145 and $143. February lean hog futures continue the long-term lower trend testing contract lows on Monday with resistance around $70.
Egypt purchased a total of 8.8 MBU of wheat from Russia and Romania yesterday paying $4/MT or $.11/BU higher than last week. U.S. values are of course still premium to Black Sea origins but we continue to track Egypt as it is the largest importer of wheat and higher world prices will continue to support higher U.S. values. Rumors swirling yesterday that Russia would be imposing a grain export quota. This narrative was spread a year ago many times which pushed and pulled on the wheat markets but in the end was never implemented.
Overnight, grains were fairly quiet trading mixed. Corn finished steady to 1 higher, soybeans 2 lower and wheat steady to 3 higher.
USDA announced a private sale of 126,000 MT or 4.6 MBU of soybeans sold to China this morning. Today at 10:30 AM CST, China and the U.S. are scheduled to finally sign Phase 1 of the trade deal. Full details of the agreement have to be officially released but the documents are supposed to be released today. The market of course has been feverishly awaiting in hopes some light will shed on the increased Ag purchase commitment by China and plan for tariff reductions by both. I have had my doubts that the public would ever see the actual commodity breakdown and according to sources this morning this will remain confidential. Confirmation of actual sales and tracking shipments should be what impacts the markets, not another verbal promise to purchase said amounts.
NOPA domestic crush for December 2019 will be released later this morning. The expectation is for 171.6 MBU of soybeans to have been crushed compared to 164.391 MBU in November and 171.76 December 2018. Soyoil stocks are expected to be slightly higher than November and last year.
This week below normal temps continue to dominate the North and heavy rains in the Southeast and Corn Belt as flooding is a concern on the Mississippi River and the majority of IL. The 6-10 day outlook calls for below normal temperatures for the eastern half of the U.S. and above normal on the West Coast and Southwest with above normal precipitation for the PNW and Southern Plains and below normal for the eastern third of the U.S.
March corn broke through the $3.82 support on Friday for a new recent low at $3.76 ½ but quickly reversed higher for a positive close. Resistance is still up at $3.92 then right around the $4 mark. March soybeans still holding support at $9.34 with resistance up at $9.61 then $9.70. March KC wheat still trending higher with support at $4.70 and resistance at $5.10. March Chicago wheat also still trending higher with support at $5.45 and into a new 14-month high overnight with resistance next up around $5.80 then $6. 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