Date: September 16th, 2020
Livestock futures finished mostly steady to higher yesterday led by feeders. Live cattle futures continue to be apprehensive as beef prices continue to slide lower and packers have held control over cash trade which is yet to develop this week. Packers did test the market yesterday at $103 which only resulted in a couple hundred sold out of IA. The question still remains though how will the short placements from March and April effect the supplies of fed cattle? We should be just starting to see those smaller numbers now through the month of October has showlists do appear to be smaller this week. There is still a push to move fed cattle though from the backlog created by COVID with weights just last week 20+ lbs heavier than a year ago. The Fed Cattle Exchange online auction will be held later this morning with 473 head consigned compared to last week’s no sale due to technical issues and two weeks ago 436 head of which 365 head sold at $103 live.
Lean hogs are overbought and looking for some technical support before attempting another charge higher. China’s Ag Ministry reported August 2020 pig herd +31.3% year over year with the sow herd +37%. Back in August 2019 those numbers were down 37 to 38% as African swine fever swept the nation. The country’s government has been pushing to rebuild the herd since the August 2018 outbreak of African swine fever. Germany announced another 5 cases of ASF near to the location of the first case found last week in wild boars. This led to an immediate ban of pork imports by South Korea last week, then China over the weekend and more from Southeast Asia since. Germany had accounted for 14% of Chinese pork imports so far this year.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 9/14/2020
Total Receipts: 6,075 Two Weeks Ago: 5,751 Last Year: 4,897
No sale last week due to the Labor Day holiday, compared to two weeks ago, steers under 450 lbs steady to 3.00 higher, 450 to 700 lbs steady to 3.00 lower, heifers under 700 lbs steady to 5.00 lower, yearlings over 700 lbs steady to 3.00 higher. Demand moderate to good, supply moderate.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 9/15/2020
Total Receipts: 2,983 Last Week: 2,624 Last Year: 2,545
Special Note: An additional 1,332 head were sold though the Video Auction.
Compared to last week, steer calves 550-700 lbs traded steady to 4.00 higher with other weights unevenly steady. Heifer calves under 700 lbs traded steady with heavier weights not well tested. Demand was good early and moderated throughout the day.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 9/14/2020
Total Receipts: 8,737 Two Weeks Ago: 9,416 Last Year: 5,139
Compared to the last sale 2 weeks ago: Feeder steers and heifers 4.00-8.00 higher. Demand good but many conditions were in the buyers favor. Weaned calves sold mostly steady to firm, however most of the un-weaned calves selling at a sharp discount. Supply did include some reputation brand un-weaned calves and these sold to very good demand. It is only mid-September but we are already seeing temperatures more typical of October with warm days and cool damp nights. Demand moderate to good.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 9/14/2020
Total Receipts: 3,812 Two Weeks Ago: 2,880 Last Year: 2,653
Compared to two weeks ago: Steers weighing 300-400 pounds 15.00-20.00 higher. Feeder steers 1.00-2.00 lower. Heifers mostly steady. Quality good thru attractive. Demand good. Slaughter cows 2.00 higher. Lean Slaughter cows 9.00-15.00 higher. Slaughter Bulls steady.
Cattle slaughter from Tuesday estimated at 120,000 head, up 2,000 from last week and matching last year. Hog slaughter from Tuesday estimated at 485,000 head, up 20,000 compared to last week but down 7,000 compared to a year ago.
Boxed beef cutout values lower with 159 loads sold on Tuesday.
Choice Cutout__216.09 -1.12
Select Cutout__206.28 -1.48
CME Feeder Index__140.52 -.95
CME Lean Hog Index__65.35 +.80
Pork Carcass Cutout__84.26 +4.55
IA-S.MN Wtd Avg Carcass Base__60.44 -1.06
National Wtd Avg Carcass Base__58.89 +.72
October live cattle rounding a bottom the past two weeks around $103.50, hopefully breaking the month long lower trend while the 6-month long higher trend is still holding. Nearby resistance is up at $109 then up to $111 which is the recent high from last month. September feeders also a rounded bottom with the 100-day moving average providing support now at $137.90. September feeders do expire next week though and the long term higher trend has been taken out this past month. Nearby resistance is around $142, tested the past two trading sessions, with last month’s high at $149.32. October feeders look similar with support around $138, resistance at $144 and the recent high at $150.20. October lean hogs again taking a break so far this week compared to the sharply higher move the past two weeks. Resistance is up around $70 and support around $60.
Over in the grains, crop conditions Monday afternoon came in as expected, corn -1% and soybeans -2% in the good to excellent categories. ND with the biggest move as corn ratings down 6% and soybeans down 9%, likely reflecting some freeze damage from early last week. Fall harvest is picking up steam as the extended forecasts look fairly wide open in major growing regions. All these stacked up to most likely apply the pressure seen on the grains yesterday. South American weather will soon be the focus of the markets as first crop planting begins. Drier than normal conditions have already delayed some early soy planting which pushing supplies for China back and possibly more export business for the U.S. this spring. Reports from China indicating a possible loss from strong winds and heavy rains up to 10 MMT of corn production or 4% of estimated output. Wheat futures held losses as several tenders have popped up recently and the U.S. will most likely still not get much of that business. Russian wheat values continue to grind higher though.
The World Trade Organization released a report yesterday stating that U.S. tariffs on Chinese goods violate international rules, undermining President Donald Trump’s trade war against Beijing. On Tuesday, a panel of three trade experts said the U.S. violated international rules when it imposed tariffs on Chinese goods in 2018. While the ruling bolsters Beijing’s claims, Washington can effectively veto the decision by lodging an appeal at any point in the next 60 days.
Grains were mixed overnight as soybeans held gains, getting back most of yesterday’s loss, finishing 5 to 6 higher. Corn finished 1 lower with wheat steady to 3 lower.
The lowest wheat offers for Egypt this morning coming from Russia and Poland from $248 to $253/MT delivered compared to their last purchase of Russian wheat back on August 25th around $228/MT.
USDA announced a private sale this morning of 327,000 MT or 12 MBU of soybeans sold to China. So far this week a total of 21.6 MBU of soybeans to China with another 16.5 MBU for unknown destinations has been announced by USDA.
The balance of this week’s weather showing above normal temps across the Rockies and Northern Plains, below normal temps for the Great Lakes and Northeast and flooding likely in the Gulf from Hurricane Sally. The 6-10 day outlook showing above normal temps over the western half of the U.S. and below normal on the East Coast with below normal moisture expected over the U.S. expect for a couple small pockets in the PNW and Southwest.
December corn hit a new 6-month high on Monday at $3.71 with resistance next up around $3.85 and support around $3.53. November soybeans into a new contract high Monday at $10.08 ¾ with resistance next up around $10.50 looking at the weekly continuous chart and going back to the summer of 2018, nearby support at $9.60. December KC wheat hit a new 3-month high on September 1st testing the $4.90 resistance pulling back test support around $4.64, the 100-day moving average. December Chicago wheat also spiked higher 2 weeks ago to test resistance around $5.70 with support at $5.33, the 50-day moving average. December soybean meal peaked at $328 Monday with the next resistance up around $335 and nearby support at $309.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700