Date: March 2nd, 2020
The narrative never changed last week, the spread of the coronavirus dominated headlines and pressured all markets. The DOW was down over 3600 points last week to levels not seen since last summer. Cattle futures tried to spark a rally almost every day last week but massive selling pressured prices as well as cash feedlot trade. On Tuesday, negotiated trade developed in Texas and Kansas at $115, which is $5 under last week’s weighted average. A very small amount of $114 traded in Kansas on Thursday and as low as $113. Nebraska dressed trade was $185 to $188 Tuesday and down to $183 on Thursday.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 02/28/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 202,700 67,000 1,200 270,900
Last Week: 240,100 36,100 38,900 315,100
Year Ago: 219,100 60,400 2,700 282,200
Compared to last week, steers and heifers sold 4.00 to 10.00 lower in the North and Southcentral regions, while the Southeast steers and heifers sold 2.00 to 4.00 lower. The negativity in the marketplace erased all of last week’s gains in feeder cattle circles. Feeder cattle nationwide still was reported to have moderate to good demand; it’s just that the demand was at lower levels. Auction receipts were curtailed somewhat this week as anecdotes of cattle producers pulling their consignments from local auction barns this week was not uncommon. Producers are not wanting to get caught in the aftermath of this week’s market drop. There are willing sellers, but there are always some that have enough winter forage left over to feed the cattle until better times develop in the marketplace.
For the week, Friday February 21st through Friday February 28th, February Live Cattle -$7.02, April -$10.67, March Feeder Cattle -$8.92, April -$9.40, April Lean Hogs -$4.75, June -$4.62. Boxed Beef, Choice +$.21 @ $205.30, Select -$2.79 @ $198.91. Pork Carcass Cutout -$.88 @ $64.12.
Cattle slaughter from Friday estimated at 115,000 head, down 6,000 from the week previous and down 2,000 from last year. For the week, 627,000 head, down 1,000 from the week previous and down 18,000 from last year. Beef production estimated at 519.3 million pounds compared to 518.7 million the week previous and 491.9 last year. Beef production year to date is up 2.5% with slaughter up 1%.
Hog slaughter from Friday estimated at 486,000 head, down 19,000 compared to the week previous but up 17,000 compared to a year ago. For the week, 2,556,000 head, down 66,000 compared to the week previous but up 119,000 compared to a year ago. Pork production estimated at 550.7 million pounds last week compared to 565.5 the week previous and 522.7 last year. Pork production year to date is up 3.9% with slaughter up 3.4%.
Boxed beef cutout values steady on Choice and lower on Select on light to moderate demand and moderate offerings for a total of 104 loads sold.
Choice Cutout__205.35 -.24
Select Cutout__198.91 -.78
CME Feeder Index__135.60 -2.43
CME Lean Hog Index__56.33 -.03
Pork Carcass Cutout__64.12 -.17
IA-S.MN Wtd Avg Carcass Base__50.24 -.32
National Wtd Avg Carcass Base__50.14 +.07
April live cattle into a new contract low last Friday at $107.47 with support from the continuous weekly chart next at $105 and resistance up around $114 then $120. March feeders into a new recent low at $128.72 with the contract low down at $126.05 from this past September and resistance up near $136. April lean hogs taking out the month long higher trend this past week with the contract low the next line of support down at $61 with resistance up around $65 then $68.25 which was the recent high last month.
Grains of course also under pressure last week although it could have been worse as soybeans climbed back some with soybean meal providing the strength as futures shot nearly $10 higher. Argentina raised only the export tax on soybeans by 3% over the weekend as some may have been trying to get ahead of themselves hoping for an export tax increase on meal which could have led to more U.S. meal being exported. Good news came from the US$ backing off 2% and weekly corn export sales continue to show strong demand kicking in. March grain contracts are now in delivery. February insurance pricing averages are set with corn at $3.88, soybeans $9.17 and spring wheat $5.56. We also begin this week with China’s trade tariff exemptions officially open and the markets will watch to see if export activity picks up as a result.
For the week, Friday February 21st through Friday February 28th March Corn -$.10 ½, May -$.08 ¼, March Soybeans -$.07, May -$.06 ¼, March KC Wheat -$.23, July -$.22, March Chicago Wheat -$.22, July -$.25 ¾, March MPLS Wheat -$.14 ¾, May -$.11 ¼, March Soybean Meal +$9.40/T, May +$10.80/T.
Overnight, grains were mixed with corn finishing steady to 3 higher, soybeans 5 to 6 higher and wheat 2 to 5 lower. Equities were all over the place overnight with DOW futures running from a few hundred points higher to lower. Gold is sharply higher with the US$ sharply lower.
Ukraine wheat harvest expected to be higher this year according to private estimates as exports have also increased. The UK and US are still working a free trade agreement as the British government released comments that they will not compromise on their food standards and they will consider opposition to a plan to impose a new digital tax on big tech companies.
Weather locally looks fairly mild while heavy rain hits the Southeast again this week. The 6-10 day outlook showing above normal temps centered over the Plains with below normal on the West Coast and above normal precipitation in the Southwest through the Great Lakes with below normal on the East Coast.
May corn into a new contract low on Friday at $3.65 ¾ with support next at $3.61 ¾ then $3.57 and resistance up around $3.87. May soybeans into a new 9-month low last week at $8.78 ¼ with the contract low down at $8.54 and resistance from $9.08 to $9.10. May KC wheat the last to break to long term higher trend with support next around $4.30 and resistance up at $4.81. May Chicago wheat holding a lower trend since mid-January with support at $5.06 and resistance at $5.55. May soybean meal trying to break the long term lower trend with support at $298 and resistance at $311.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700