Date: January 29th, 2020
Livestock and grain futures were mixed yesterday, at least the free fall subsided for a few commodities. Cattle futures were mixed to mostly lower and didn’t even need the expanded ranges after Monday’s limit lower move with only a $1 range trading for Live Cattle and $2 ranges for Feeders. Cash feedlot trade only active in the Western Corn Belt so far this week on light volume but $2 lower at $122 live and $4 lower at $194 dressed. The Fed Cattle Exchange online auction will be held later this morning with 477 head consigned compared to last week’s 561 head of which 1 lot of 112 sold at $124.
The latest update from China confirms more than 6,060 coronavirus cases, exceeding the total number of SARS cases during the 2002-2003 epidemic and 132 fatalities. More than 50 million Chinese are in essence on lockdown or quarantined currently. Retail and travel are of course the two hardest hit segments right now in Asia but outside markets recovered some yesterday with stocks and crude higher. Australia has had a breakthrough on a vaccine while Novartis chief executive released a statement that it will take at least 12 months to find a new vaccine. U.S. testing for a vaccine against African swine fever is looking promising as it has proven so far to be 100% effective in pigs when they were challenged 28 days after inoculation.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 1/27/2020
Total Receipts: 5,007 Last Week: 6,469 Last Year: 7,334
Compared to last week, steers under 550 lbs steady, over 550 lbs 4.00 to 6.00 lower, heifers under 600 lbs steady to 3.00 higher, over 600 lbs 1.00 to 3.00 lower.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 1/27/2020
Total Receipts: 12,616 Last Week: 12,638 Last Year: 10,629
Compared to last week: Feeder steers 3.00-6.00 lower. Feeder heifers 4.00-7.00 lower. Steer calves 6.00-9.00 lower. Heifer calves 1.00-6.00 lower. Demand light to moderate for feeder cattle, moderate to good for grazing cattle.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 1/27/2020
Total Receipts: 2,498 Last Week: 2,329 Last Year: 2,352
Compared to last week: Steers 6.00-8.00 higher. Heifers 2.00-4.00 higher. Demand good. Quality good. Slaughter cows mostly steady to 1.00 higher. Slaughter bulls 6.00-8.00 higher.
Cattle slaughter from Tuesday estimated at 117,000 head, down 6,000 from last week and matching last year. Hog slaughter from Tuesday estimated at 498,000 head, up 5,000 compared to a week ago and up 32,000 compared to a year ago.
Boxed beef cutout values weak on Choice and higher on Select on moderate to good demand and moderate to heavy offerings for a total of 153 loads sold.
Choice Cutout__212.85 -.74
Select Cutout__212.16 +1.66
CME Feeder Index__143.76 -.56
CME Lean Hog Index__61.74 +.10
Pork Carcass Cutout__75.88 -1.38
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__55.39 +1.10
National Wtd Avg Live Price__42.37 +1.15, Wtd Avg Carcass Base__54.71 +.82
February live cattle into a new recent low again yesterday at $122.10 with support next right around $120 and a 38% retracement at $119.25, resistance up around $126. January feeders expire tomorrow. March pushing lower into a new 4-month low yesterday with support next at $134.30, the 62% retracement line, then around $130, resistance up at $143.50. February lean hogs continue the long-term lower trend but still holding support above $65 with resistance at $69.
Corn futures were the only grain to finish in the green yesterday. U.S. corn export sales have picked up dramatically with weekly sales announced last week the 3rd highest for this marketing year and daily sales announced by USDA four consecutive days. U.S. values are currently discount to the competing exportable corn in Argentina and Ukraine. Basis remains firm for both corn and soybeans from the overall lack of cash grain movement along with stalled out corn futures and tanking soybean futures so far this month. A little support for corn may have also come from a state update on crop progress and conditions which showed corn harvest for SD not quite finished and ND still only half done. These reports should have also helped wheat futures yesterday as well with every HRW producing state reporting lower conditions, yet all three markets traded mixed and finished lower.
Overnight, equity markets and energies again higher, grains traded both sides of unchanged and finished mixed. Corn finished 3 lower, soybeans fractionally higher and wheat 5 to 7 lower.
No daily sales announced by USDA this morning. South Korea purchased a total of 133,000 MT or 5.2 MBU of optional origin corn, most has been coming from Argentina lately but the rumors for this shipment are leaning towards the U.S.
Weather the rest of this week fairly mild locally with the next system to come through early next week. The 6-10 day outlook still showing normal to above normal temps for the eastern third of the U.S. and below normal in the West with above normal precipitation stretching from the Southwest up into the Northern Plains and in the Southeast but below normal centered on the West Coast and Southern Plains.
March corn with support at $3.75 ¼, testing the nearby resistance around $3.86 where most of the major moving averages have now converged then up at last week’s high at $3.94. March soybeans on a steep lower trend so far this month with support holding the past 2 days at $8.88 then down at $8.82, the lows from early December, resistance up around $9.30. March KC wheat still trending higher with support at $4.70 and resistance around $5.04. March Chicago wheat also still trending higher and continues to look the most impressive with nearby support at $5.45 and resistance at $5.93. March soybean meal still holding a lower trend with a new contract low this week at $295.20 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