Date: March 18th, 2020
Live Cattle futures were the leader yesterday using expanded limits to close $4.50 higher on the front three months. Feeders were impressive also, but did show some wild trading ranges as high as $7 and finished +187 to +505. Nearby Lean hogs also finished the expanded limit higher. This also wasn’t the result of limit higher equites with the Dow +600 points when livestock futures closed. Beef prices shot higher Monday and yesterday after the mass grocery store meat counter cleanout that started late last week. Cash feedlot trade already kicked off Monday on moderate volume at $105 live up to $110 but has ceased since. Later this morning the Fed Cattle Exchange online auction will be held with 10 times the normal run, 4,680 head consigned, compared to last week’s 460 head of which all sold at $110. Cattle on Feed coming this Friday with average trade estimates looking for 100% on feed compared to a year ago, placements only 92% and marketings up to 106%.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 3/16/2020
Total Receipts: 1,724 Last Week: 5,627 Last Year: 7,809
Compared to last week, steers and heifers 10.00 to 15.00 lower, with some steer calves 20.00 lower.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 3/16/2020
Total Receipts: 1,208 Last Week: 6,933 Last Year: 8,975
Compared to last week: Feeder steers and heifers sold 9.00-15.00 lower.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 3/16/2020
Total Receipts: 514 Last Week: 2,253 Last Year: 2,568
Compared to last week: Following several days of rain in the trade area. There were too few receipts to establish a trend. However a much lower undertone is noted.
Cattle slaughter from Tuesday estimated at 121,000 head, down 2,000 from last week and matching last year. Hog slaughter from Tuesday estimated at 498,000 head, matching a week ago and up 27,000 compared to a year ago.
Boxed beef cutout values sharply higher for the second day in a row on good demand and heavy offerings for a total of 268 loads sold.
Choice Cutout__239.93 +15.57
Select Cutout__229.32 +12.61
CME Feeder Index__124.00 -.67
CME Lean Hog Index__59.74 -.45
Pork Carcass Cutout__74.42 +1.04
IA-S.MN Wtd Avg Carcass Base__55.82 +2.16
National Wtd Avg Carcass Base__55.44 +2.06
Last night, Europe and Asian equity markets sharply lower, Dow mini futures locked limit lower at midnight, down 821 points. US$ higher, gold and energies lower. Today, we have $4.50 limits on all livestock futures. April live cattle contract low from Monday at $91.07 with support next down around $90, the lows from 2010 then around $80, the lows from 2009. March feeders contract low at $108.50 with support next down at $106.50, the spot low from October 2010. April lean hogs contract low at $52.12 with support next at $51.27, the spot low from October 2018.
Grains were all over the place yesterday, corn sharply lower, soybeans mostly higher but finishing mixed and wheat steady for Chicago while modest gains held for KC HRW. There are most certainly many factors pulling and pushing on the grains right now. The most pressing for corn is the collapsing energy markets and specifically ethanol market as demand is falling. RBOB gas futures are down over $.70/gal this month, ethanol futures down over $.40 hitting a new all-time low yesterday at $.945/gal yet still some $.30 higher than gas. Crude oil down to its lowest level since May 2003.
Many ethanol plants beginning in the Eastern Corn Belt reported reduction in grinds to fulling shutting down for the rest of the month. On a positive note, DDG supplies will go down increasing the domestic demand for corn and meal. Export sales have been very good for both corn and grain sorghum recently. The US$ though has been sharply higher since March 9th now into new 2-year highs. Argentina has reportedly started a program that may quarantine vessels looking to load if coming in from high risk areas such as Europe and SE Asia. Argentina is a major exporter and competitor to the U.S. for wheat, corn and soybean meal. Ukraine and Russia have suggested limiting food exports, not grain exports yet, but Egypt just pulled their wheat inspectors from both countries yesterday while leaving some in France.
Overnight, grains were mixed with mirrored trade from yesterday. Corn finished 2 to 7 lower, soybeans steady to 4 higher and wheat steady to 7 higher.
South Korea remains active buying optional origin corn and feed wheat with a tender announced for U.S. milling quality wheat as well. South American production estimates for both corn and soybeans continue to creep lower due to recent dry conditions.
Rain still in the forecast the balance of this week with heavy rain for the Southeast through the weekend. Minor flooding expected in SD, parts of Western MO, the OH River Valley and Southern Mississippi. The 6-10 day outlook showing below normal temps for the western third of the U.S. and above normal south and east with above normal precipitation across the U.S, below normal starting to show in the South.
May corn into a new contract low overnight at $3.35 ½ matching the spot low from May 2019 with support next around $3.30, the spot lows from 2017 & 2018. May soybeans contract low from Monday at $8.21, support next at $8.10 then $8.00 with resistance up at $8.85. May KC wheat holding a lower trend since mid-January, holding support at $4.20 so far with the contact low down at $4.08 ¾ and resistance at $4.48. May Chicago wheat also holding a lower trend with support next at $4.88 and resistance at $5.25. May soybean meal choppy this month from $311 down to $295.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700