Date: September 28th, 2020
Cattle futures finished the week under pressure even though cash feedlot trade was reported in TX, KS and NE at mostly $2 higher than the week previous at $105 live and $165 on a dressed basis. USDA’s Cattle on Feed report after the close on Friday was not friendly. Cattle on Feed as of September 1 came in at 11.4 million head, 4% higher than a year ago with trade estimates at 3.5%. Placements during August were 109% compared to only 106% pre report average trade estimate. Marketings were in line with expectations at 97% and with one less business day this year, were actually friendly at 101.5% on a daily basis vs. last year.
Lean hog futures scored another triple digit higher day to end last week with the nearby October contract hitting new 7-month highs. Through Friday, another two cases of African swine fever had been confirmed in wild boars in the eastern Germany. This brings total confirmed cases to 34 since Sept. 10, all in wild animals, with no farm pigs affected. Exports to Southeast Asia though remain banned.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 09/25/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 195,500 29,700 42,300 267,500
Last Week: 201,200 46,700 39,800 287,700
Year Ago: 208,000 73,900 24,800 306,700
Compared to last week, steers and heifers sold steady to 2.00 lower. Weakness in the CME Cattle Complex weighed heavily on the market this week ahead of Friday’s Cattle on Feed report. Supply was moderate this week as yearlings become harder and harder to find as we get closer to fall on the calendar. The larger cow/calf states are now starting to see calves that are weaned as the trailer is going down the road to the auction, which is normal for this time of year. Demand was moderate to good with health records and amount of flesh playing a big part of how strong demand was for those new crop calves. Steep discounts for those unweaned calves happen as backgrounding yards’ sick pens get full.
For the week, Friday September 18th through Friday September 25th, October Live Cattle +$.22 December -$.45, September Feeder Cattle +$1.35, October -$2.10, October Lean Hogs +$5.25, December +$1.90. Boxed Beef, Choice +$3.70 @ $219.34, Select +$3.04 @ $206.98. Pork Carcass Cutout +$3.79 @ $91.32.
Cattle slaughter from Friday estimated at 112,000 head, up 1,000 from the week previous but down 2,000 from last year. Saturday’s kill was estimated at 57,000 head bringing week to date up to 651,000 head, up 6,000 from the week previous and up 1,000 from last year. Beef production estimated at 546.6 million pounds compared to 540.1 million the week previous and 535.9 million pounds last year. Year to date beef production is down 1.7% compared to last year with cattle slaughter -4.3%.
Hog slaughter from Friday estimated at 478,000 head, up 19,000 from the week previous but down 4,000 compared to a year ago. Saturday’s kill was estimated at 230,000 bringing the week to date up to 2,627,000 head, up 49,000 compared to the week previous but down 14,000 compared to a year ago. Pork production last week estimated at 552.6 million pounds compared to 541.6 million the week previous and 556.2 million pounds a year ago. Year to date pork production is up 1.9% compared to last year with hog slaughter up 1.2%.
Boxed beef cutout values higher on Choice and lower on Select with 138 loads sold on Friday.
Choice Cutout__219.34 +1.86
Select Cutout__206.98 -.76
CME Feeder Index__142.23 -.59
CME Lean Hog Index__74.53 +.83
Pork Carcass Cutout__91.32 -.71
IA-S.MN Wtd Avg Carcass Base__65.12 +1.47
National Wtd Avg Carcass Base__64.74 +.14
October live cattle holding a higher trend this month and the long term higher trend holding since early April. Nearby resistance is up at $109 and then $111 which is the recent high from last month with support at $106 then $103.50. October feeders look similar with a sideways to higher trend this month, resistance at $144 then around $150 and support at $137.50. October lean hogs again hitting a new 7-month high at $72 last Friday with resistance up around $75 and support at $64.
Grains were under pressure most of last week as trade volume has slowed, fall harvest expands and thoughts that Chinese purchasing may be slowing. There were no new corn or soybean sales announced by USDA for a second day in a row, only 100K MT of meal for unknown destinations. US weather forecast is generally supportive for harvest activity this week after a cold front pushes through on Sunday. South American weather is still dry but also still early as the bulk of Brazil’s soybean planting takes place during October and November.
The CFTC Commitment of Traders report Friday afternoon showed managed money or funds through September 22nd +37.3k corn (net long 95.9k), -570 Chicago Wheat (net long 14.5k), +8.2k KC Wheat (net long 18.4k) and +19.3k soybeans (net long 211.1k).
For the week, Friday September 18th through Friday September 25th, December Corn -$.13 ¼, March -$.14 ¼, November Soybeans -$.41, January -$.41, December KC Wheat -$.29, March -$.29 ¾, December Chicago Wheat -$.30 ¾, March -$.31 ¼, December MPLS Wheat -$.21 ½, March -$.20 ¾, October Soybean Meal -$.50/T, December -$3.50/T.
Grains were mixed overnight as the US$ is up near its 2-month highs and Chinese national holiday from October 1st through the 8th will cut buying of U.S. soybeans and corn. Corn finished 2 lower, soybeans steady to 1 higher and wheat 2 to 5 lower.
USDA announced private sales this morning of 110,800 MT or 4.4 MBU of corn sold to Japan, 207,140 MT or 8.2 MBU of corn sold for unknown destinations and 218,300 MT or 8.0 MBU of soybeans sold for unknown destinations.
End of month/quarter along with the USDA quarterly stocks and small grain reports will be this Wednesday. The average trade estimate for soybean stocks is 575 MBU compared to stocks one year ago at 909 MBU. The average trade estimate for corn stocks is 2.25 BBU compared to 2.221 BBU a year ago. US wheat stocks are estimated to be 2.24 BBU compared to 2.346 BBU last year and all wheat production in essence unchanged at 1.84 BBU.
Weather this week continues to look favorable for harvest activity with much below normal temps in the Western Corn Belt and heavy rain along the East Coast. The 6-10 day outlook showing above normal temps over the western half of the U.S. and below normal east with below normal moisture for all except in Florida.
December corn trending lower since hitting a new 6-month high on September 18th at $3.79 ¼ with nearby support at $3.60. November soybeans new contract high on September 18th at $10.46 ¾ with support at $9.93. December KC wheat trying to hold the higher trend since early August with support at $4.63. December Chicago wheat very choppy but also a higher trend going back to late June with support at $5.33 and resistance at $5.78.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700