Date: January 22nd, 2020
Livestock and grain futures were mixed yesterday after the 3-day weekend. There was hope early on that cattle futures would have a strong start with packers running Monday and beef prices higher, but overall it was another early in the week trading day with little direction. Formula totals for last week were mixed, larger in Nebraska, but smaller in Texas and Kansas: Kansas 86,605 (down 13,399), Nebraska 60,284 (up 7,982), Texas 74,955 (down 3,687). Total trade volume was also mixed, higher in Nebraska, somewhat lower in Texas, and lower in Kansas: Kansas 108,370 (down 6,723), Nebraska 85,284 (up 14,102), Texas 81,801 (down 744). New show lists appear to be larger in Kansas, but lower in Texas, and Nebraska/Colorado.
The Fed Cattle Exchange online auction will be held later this morning with 561 head consigned compared to last week’s 744 head of which 435 sold at $124 to $124.25.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 1/20/2020
Total Receipts: 6,469 Last Week: 6,263 Last Year: 2,920
Compared to last week, steers and heifers under 500 lbs steady to 4.00 higher, steers 500 lbs to 800 lbs and heifers over 500 lbs steady, steers over 800 lbs 2.00 to 4.00 lower.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 1/20/2020
Total Receipts: 12,500 Last Week: 11,325 Last Year: 4,489
Compared to last week: Feeder steers steady to 4.00 lower. Feeder heifers 600-700 lbs.1.00 higher, heavier weights steady to 2.00 lower. Steer calves steady to 5.00 higher. Heifer calves sold steady. Demand moderate to good.
Cattle slaughter from Tuesday estimated at 123,000 head, matching last week and up 6,000 from last year. Hog slaughter from Tuesday estimated at 498,000 head, up 1,000 compared to a week ago and up 25,000 compared to a year ago.
Boxed beef cutout values steady to weaker on moderate demand and moderate to heavy offerings for a total of 115 loads sold.
Choice Cutout__214.51 -.13
Select Cutout__213.47 -.01
CME Feeder Index__145.69 +.02
CME Lean Hog Index__60.18 +.04
Pork Carcass Cutout__78.19 +1.08
IA-S.MN Wtd Avg Live Price__40.25 no comp, Wtd Avg Carcass Base__52.15 +.39
National Wtd Avg Live Price__40.14 no comp, Wtd Avg Carcass Base__51.71 -.11
February live cattle holding to a sideways pattern since November with support first at $124.50, resistance at $126.55 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 with support around $143. February lean hogs continue the long-term lower trend testing recent lows near $65.50 early last week with resistance around $70 then $72.
A new coronavirus is spreading in Southeast Asia. The latest updates from China reporting over 440 people infected and at least nine people have died from the pneumonia-like illness. Officials this week also confirmed that the new coronavirus, which is linked to a seafood and animal market in the Chinese city of Wuhan, is transmissible between humans. This ultimately sparked fears that a person infected with the virus and experiencing the most severe stage of infection could be a super-spreader — someone who transmits the virus to a considerable more amount of people than the average infected person. Tuesday afternoon, the CDC confirmed the first case here in the U.S. after a traveler from China was diagnosed in Seattle, WA.
Coronavirus can cause a range of illnesses, from the common cold to Severe Acute Respiratory Syndrome (SARS) — the latter of which also began in China and infected some 8,000 people during a 2002-2003 outbreak. At least 770 died after it spread to other cities and countries across the world. Back in 2002, China kept the SARS outbreak hidden for quite some time and it appears they could be behind on confirmations again today.
Asian equity markets were down hard Tuesday which spilled into the U.S. markets after the long 3-day weekend. Hong Kong was at the epicenter of the SARS outbreak as consumer spending collapsed which helped trigger a recession. This could have been part of the break in soybeans yesterday along with the markets still wanting to see export sales into China ahead of the week long Lunar New Year’s holiday break that begins January 25th.
Export inspections for the week ending January 16th impressive again for soybeans at 44.1 MBU. China was at the top of list again taking over 20 MBU followed by Bangladesh, Mexico and Vietnam. Shipments are up 170 MBU (+24%) vs. last year. Wheat inspections totaled 16.0 MBU compared to 20 MBU average needed per week. The top 3 destinations were Indonesia, Mexico and Bangladesh. Year to date shipments are up 70 MBU (+14%) from last year. Grain sorghum shipments only totaled 743K BU last week, split between Japan and Mexico, compared to needing to average 2.5 MBU per week. Year to date is up 16.2 MBU (+73%). Corn exports poor again at 13.6 MBU last week with the top three remaining the same in Mexico, Colombia and Japan. Year to date down 440 MBU (-54%) from a year ago.
Overnight, equity markets stabilized and grains were firm to higher. Corn finished 1 to 2 higher, soybeans 2 to 3 higher and wheat 1 to 8 higher, again led by Chicago wheat into new recent highs.
No sales announced by USDA this morning. South Korea purchased 134,000 MT or 5.3 MBU of optional origin corn.
Wintry mix moving across the Southern Plains this week with spots of heavy rain in the forecast for eastern TX and OK into next week. The 6-10 day outlook still showing normal to above normal temps throughout the U.S. with above normal precipitation for the Southern Plains and PNW and below normal for CA and New England.
March corn with support at $3.75 ¼, last week’s new recent low, and resistance still holding so far at $3.92 then right around the $4 mark. March soybeans into new recent lows overnight with support next at $9.12 then $9.02 to $9.00 and resistance up around $9.40. March KC wheat still trending higher with support at $4.70 and resistance at $5.10. March Chicago wheat also still trending higher and continues to look the most impressive with nearby support at $5.60 and resistance next at $5.93. March soybean meal still holding a lower trend with the contract low down at $295.50 and resistance at $304.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700