Date: October 28th, 2020
Livestock futures finished mostly higher as grains were lower on Tuesday. Cash feedlot trade at a standstill so far this week, beef prices are steady as pork prices continue to be under pressure. The online auction from the Fed Cattle Exchange may be the first indicator for the week with over 2,000 head consigned compared to last week’s 1,096 head of which 702 head sold at mostly $106.50 live.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 10/26/2020
Total Receipts: 2,741 Last Week: 4,826 Last Year: 6,108
Compared to last week, steer and heifer calves 2.00 to 5.00 lower, yearlings steady to 5.00 lower. Demand moderate to light, supply light.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 10/26/2020
Total Receipts: 3,092 Last Week: 5,974 Last Year: 6,807
Compared to last week: Feeder steers and heifers traded mostly 3.00-5.00 lower on limited comparable sales. To few comparable trades on calves for an accurate test, however a lower undertone is noted. Demand moderate. Quality average. A cold front swept across the trade area hampering livestock movement.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 10/26/2020
Total Receipts: 2,276 Last Week: 3,576 Last Year: 2,434
Compared to last week: Steers and heifers had too few receipts to establish a trend, however a much lower undertone is noted. Demand moderate. Quality plain thru good. Slaughter cows mostly steady, in a light test. Slaughter bulls steady, also in a light test.
Cattle slaughter from Tuesday estimated at 117,000 head, down 4,000 from last week but up 4,000 from last year. Hog slaughter from Tuesday estimated at 492,000 head, up 4,000 compared to last week and matching a year ago.
Boxed beef cutout values Tuesday, lower on Choice and steady on Select with 175 loads sold.
Choice Cutout__206.70 -1.13
Select Cutout__188.67 +.18
CME Feeder Index__133.64 -.06
CME Lean Hog Index__77.47 -.70
Pork Carcass Cutout__88.83 -3.03
IA-S.MN Wtd Avg Carcass Base__63.42 +.87
National Wtd Avg Carcass Base__62.56 +2.05
October live cattle expire on Friday holding near the $105 level with feeders looking to hold steady cash trade this week. The December contract broke through the long term higher trend earlier this month with support at $102 and resistance at $106 then just shy of $109. October feeders expire on Thursday. The November contract looks similar to the fat market although a lower trend has been in place now since early August. Nearby support is around $128 with resistance levels at $135, $137 and $140. December lean hogs set a new high earlier this month at $72.80 with support around $65.
Soybeans hit a new contract high and corn a new 15-month high early in the trading sessions with both reversing into a lower close for the day. Fall harvest is wrapping up in many areas with nationwide numbers at 72% for corn and 83% for soybeans, both well ahead of the average pace. Exports continue to be supportive with the next major market movers coming from next week’s general election followed by the November USDA crops report. Wheat continued under pressure as precipitation coverage across the U.S. Plains was greater than expected and forecasts show better chances for rains across Southern Russian this week.
Overnight a massive selloff began hitting all markets as equity markets around the world are sharply lower with US futures pointing toward heavy selling for the third consecutive day. Crude has been sharply lower the past few days as the nearby December contract has bounced from $37 to $42 since early September. The rising COVID cases around the world and looming lockdown measures continue to provide the most pressure. For the grains, the improved weather across the US Plains, South America and Black Sea are adding pressure as well. Corn finished the overnight 8 to 10 lower, soybeans 15 to 20 lower and wheat 9 to 16 lower. Not to say the top is yet just yet, just more proof that bullish markets do not mean that we trade higher every day.
USDA announced private sales this morning of 207,000 MT or 8.15 MBU of optional origin corn sold to South Korea. Overnight, it was rumored they purchased a cargo of corn most likely to come from South America or South Africa. South Korea also purchased 77,900 MT or 2.9 MBU of US milling wheat and 1 MBU of Canadian wheat. USDA also had daily sales announcements for 110,000 MT or 4 MBU of soybeans sold to Egypt and 120,000 MT or 4.4 MBU of soybeans sold for unknown destinations.
The 11th hurricane, Zeta, to make landfall in the Gulf later today and bringing with it heavy rains for the Southeast, Mid Atlantic and possibly into the portions of KS and OK later this week. The 6-10 day outlook showing above normal temps for the western half of the U.S. and the WCB with below normal temps in the South and East while much below normal moisture showing for the eastern half of the U.S. and the Northern Plains.
December corn gapped lower in the overnight with yesterday’s new recent high at $4.22 ¼ and nearby support around the $4 mark. November soybeans with a new contract high yesterday at $10.94. First notice day though is Friday, please remember to roll or exit your positions by then as volume is getting thin and daily limits will not be in place through expiration. The January contract is currently trading at a $.05 inverse or lower. That means the market is charging an additional $.05 to hold soybeans in storage. Yesterday’s high was at $10.88 ½ with support at $10.55 then $10.35. December KC wheat into a new recent high last week at $5.79 ½ with support around $5.25. December Chicago wheat also a new recent high last week at $6.38 ¼ with support at $5.87.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700