Date: October 7th, 2020
Livestock markets were mixed yesterday as live cattle continue a cautiously higher trend. October fats are in delivery now with the Iowa topping the cash feedlot trade last week at $109 and early asking prices this week at $110+. The supply of cattle are transitioning from oversupply to more moderate as light placements were indicated in March and April. Feeders were hit with triple digit losses though as pressure spilled over from the grain rally. Nearby lean hogs into another recent high, testing resistance from this past winter but deferred contracts held near unchanged.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 10/5/2020
Total Receipts: 5,082 Last Week: 6,125 Last Year: 3,529
Compared to last week, steer calves sold steady to 4.00 higher, yearlings unevenly steady. Heifers weak to 5.00 lower with a few lightweight heifers trading as much as 9.00 lower.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 10/5/2020
Total Receipts: 5,527 Last Week: 5,767 Last Year: 7,913
Compared to last week: Feeder steers unevenly steady. Feeder heifers 1.00-4.00 higher. Steer calves steady to 3.00 lower, most declines over 500 lbs. Heifer calves mostly 2.00-5.00 higher.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 10/5/2020
Total Receipts: 3,888 Last Week: 3,116 Last Year: 2,589
Compared to last week: Steers mostly steady to 3.00 lower. Heifers 3.00-5.00 lower. Demand good. Quality plain thru attractive. Slaughter cow 3.00-4.00 lower. Slaughter Bulls mostly steady to 2.00 lower.
Cattle slaughter from Tuesday estimated at 120,000 head, matching last week and up 2,000 from last year. Hog slaughter from Tuesday estimated at 487,000 head, up 2,000 compared to last week but down 1,000 compared to a year ago.
Boxed beef cutout values lower with 168 loads sold on Tuesday.
Choice Cutout__216.24 -.74
Select Cutout__206.84 -1.17
CME Feeder Index__143.10 +.36
CME Lean Hog Index__77.41 +.15
Pork Carcass Cutout__92.55 -2.45
IA-S.MN Wtd Avg Carcass Base__63.77 -2.17
National Wtd Avg Carcass Base__64.08 -.47
October live cattle holding a higher trend over the past month and the long term higher trend holding since early April. We hit a new recent high yesterday at $109.55 with resistance up at $111, the recent high from August, and support at $107.30, both the 20-day and 50-day moving averages. October feeders with the dive lower yesterday into a new 3-month low with support next from $134 to $130 and resistance at $144. October lean hogs with another new recent high yesterday at $76.37, breaking the resistance area from this past winter with the next up around $77 then the contract high from May 2019 at $88.60 and support at $64.
Grains led higher by soybeans into new contract highs as wheat and corn followed hitting new recent highs. KC wheat led the 3 wheat markets higher as concern is building with the current dryness in the Southern Plains and dry weather forecasts still in Russia. Another hurricane looking to impact the Gulf firing up to a Cat 4 yesterday. This could also be behind the pop in soybeans yesterday with a massive export program on the books. We have made it through all the named hurricanes so now onto the Greek Alphabet with Hurricane Delta expected to make landfall in Louisiana late Friday or early Saturday. USDA monthly crop this Friday with average trade estimates for reduced production and ending stocks again would be another fundamental friendly charge for the grains.
Grains continued to rally overnight with corn finishing 2 to 3 higher, soybeans 6 to 8 higher and wheat 5 to 10 higher.
Russia Ag Minister on Wednesday said they are planning on setting grain export quota for the first half of 2021. USDA attaché report for Brazil forecasts 2020/21 soybean production at 131 MMT. September WASDE was projecting 133 MMT.
South Korea buying South American origin meal for delivery in December and corn for delivery January through February. USDA announced private sales this morning of 120,000 MT or 4.4 MBU of soybeans sold for unknown destinations and 132,000 MT or 4.85 MBU of soybeans sold to China.
Pre USDA Report Average Trade Estimates
US Soybean harvested acres at 82.92 mln acres down from September’s 83.02 mln acres
US Soybean yield estimate at 51.5 BPA, September at 51.9 BPA
US Soybean production at 4.28 BBU, September at 4.313 BBU
20/21 US Soybean ending stocks at 370 MBU, September at 460 MBU
20/21 World Soybean ending stocks at 91.36 MMT, September at 93.59 MMT
US Corn harvested acres at 83.32 mln acres down from September’s 83.47 mln acres
US Corn yield estimate at 177.7 BPA, September at 178.5 BPA
US Corn production at 14.81 BBU, September at 14.900 BBU
20/21 US Corn ending stocks at 2.11 BBU, September at 2.503 BBU
20/21 World Corn ending stocks at 300.1 MMT, September’s at 306.8 MMT
20/21 US Wheat ending stocks at 888 MBU, September at 925 MBU
20/21 World Wheat ending stocks at 317.2 MMT, September at 319.37 MMT
Weather this week remains wide open for fall harvest with above normal temps. Heavy rains expected in the Southeast after Hurricane Delta makes landfall, some light rain in the forecast for the Western Corn Belt into early next week. The 6-10 day outlook showing above normal temps for the eastern half of the U.S. and the West Coast with below normal over the Rockies and Plains and above normal moisture for the eastern half of the U.S. with below normal in the Southwest.
December corn hit a new recent high yesterday and again overnight at $3.89 ¼ with resistance next up around $3.93 and support at $3.77. November soybeans with a new contract high yesterday at $10.53 ¾. May 2018 was the last time a spot price was above $10.50, up to $10.71 in March of that year. Support is at $10.17 then around $9.86. December KC wheat into a new recent high overnight at $5.46 ¾ with resistance at $5.50 and support at $5.04. December Chicago wheat also a new recent high overnight at $6.02 ¾. Spot Chicago Wheat has not been above $6 since 2015.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700