Date: February 19th, 2020
Livestock futures were higher most of the day yesterday and held onto decent gains to start the week as follow through buying controlled the market chatter. Feedlots should be looking to take advantage of the recent rally with cash trade now some $2 discount to the nearby live cattle contract. Beef demand should also continue to strengthen as we exit winter and enter the grilling season along with continued hopes that China becomes a major buyer of protein this year. The Fed Cattle Exchange online auction will be held later this morning with 422 head consigned compared to last week’s 413 head of which 315 sold at $119 live.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 2/17/2020
Total Receipts: 6,882 Last Week: 4,817 Last Year: 4,509
Compared to last week, steers and heifers under 700 lbs steady to 5.00 higher, over 700 lbs 2.00 to 7.00 higher. Demand good, supply moderate to heavy. Weigh-ups and flesh condition favorable to the Buyers side, along with good quality kept the trade active.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 2/17/2020
Total Receipts: 8,740 Last Week: 7,598 Last Year: 9,190
Compared to last week: Feeder steers 600-800 lbs. 5.00-9.00 higher, heavier weights mostly steady to 1.00 higher. Feeder heifers 2.00-6.00 higher. Steer and heifer calves 5.00-10.00 higher. Demand good to very good, especially so for thinner fleshed calves headed to graze wheat pasture.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 2/17/2020
Total Receipts: 2,202 Last Week: 2,070 Last Year: 2,370
Steers 7.00-9.00 higher. Heifers 6.00-8.00 higher. Quality plain thru attractive. Demand good. Slaughter cows 3.00- 4.00 higher. Slaughter bulls 8.00-9.00 higher following a light test last week.
Cattle slaughter from Tuesday estimated at 123,000 head, up 1,000 from last week and up 7,000 from last year. Hog slaughter from Tuesday estimated at 494,000 head, down 2,000 compared to last week but up 18,000 compared to last year.
Boxed beef cutout values lower on Choice and sharply lower on Select on light demand and moderate offerings for a total of 123 loads sold.
Choice Cutout__206.13 -1.13
Select Cutout__203.73 -2.45
CME Feeder Index__141.19 +.47
CME Lean Hog Index__55.66 -.31
Pork Carcass Cutout__65.01 +2.15
IA-S.MN Wtd Avg Carcass Base__50.37 +2.33
National Wtd Avg Carcass Base__50.05 +2.05
February live cattle with an inner trading day yesterday after the reversal higher on Friday. Support is down around $118.50 with resistance at $122.70. The February contract expires next Friday. April live cattle dipped down to the 62% retracement level last week for a new recent low at $116.65 with resistance up at $122. March feeders have also found support at the 62% retracement level near $134.30 with resistance at $139.65 then $141.50. April lean hogs with a key reversal higher yesterday but still a very ugly chart with support at $61 and resistance up at $66.85. There are still a couple gaps to fill left from the collapse last month and a long term lower trend line that started last April which would require a rally above $75 to take out.
Grains were led higher by wheat actually to start the week as most had hoped soybeans would be the leader. NOPA domestic crush was friendly with nearly 177 MBU of soybeans processed in January. Phase 1 of the U.S./China trade officially kicked off over the weekend and China had already commented about reducing some tariff levels on U.S. products including soybeans, beef and pork. Additional comments were being reported the China will in fact cut the tariff back on soybeans to just the 3% making U.S. and Brazilian soybeans back on a level playing field. The US$ though has been rallying so far this year and into new 2 year highs. No sales announced by USDA after the long holiday weekend. So what sparked wheat and help carry corn futures higher yesterday…Australia’s wheat crop the lowest in 12 years, which isn’t new news, Euro wheat markets were sharply higher Monday though and a swarm of locusts heading into China that already caused havoc across Africa and around the Red Sea. Honestly if there isn’t follow through today in the wheat markets then it shows wheat futures were ripe for any bullish news as the other commodities still need additional help.
Export inspections for the week ending February 13th were above expectations, above average for soybeans and grain sorghum but still below the average needed for corn and wheat. Corn inspections totaled 31.3 MBU compared to average needed at 43.5 MBU. The 3 major importers of U.S. corn remain Mexico, Japan and Colombia. South Korea has been sourcing most of its corn from Argentina so far this marketing year, so it was good to see a cargo for them this past week. Wheat totaled 18.4 MBU with the average at 22.5 MBU. Southeast Asia remains the primary destination, taking 10.6 MBU this past week. Grain sorghum totaled 2.9 MBU with 1.9 MBU going to China. Soybeans totaled 36.5 MBU with 8 MBU heading to Mexico, 7.5 to China and 4+ MBU to both Egypt and Bangladesh.
Overnight, grains were lower as wheat showed no follow through from yesterday’s sharp gains. Corn finished 1 lower, soybeans 4 to 6 lower and wheat 4 to 7 lower.
No USDA sales announced this morning. South Korea remains active, buying optional origin corn. Ukraine reported 2020 corn production should be near last year’s output as the Russian Ag Ministry stated 2020 wheat production is expected to be 3 to 5% higher than last year’s output.
Heavy rains in the forecast again for early next week in the Southeast with much below normal temps and heavy snow expected in the Rockies. The 6-10 day outlook shifting above normal temperatures to the East coast and below normal centered over the Rockies and Plains with above normal precipitation across the Northern Plains and East Coast and below normal precipitation along the West Coast and Southwest.
March corn still holding range bound trade with support at $3.75 ¼ and resistance at $3.85 then $3.94. March soybeans holding a higher trend so far this month with the recent low down at $8.68 ¾ and resistance at $9.00. March KC wheat holding the higher trend going back to early September with support $4.58 and resistance up at $4.90. March Chicago wheat back above the long term higher trendline with support at $5.38 and resistance at $5.76 ½. March soybean meal hit a new contract low on February 6th at $286.40 with resistance at $294.50 then around $300.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700