Date: November 18th, 2020
Livestock futures traded higher yesterday, most contracts triple digits higher as fall crops were also higher and wheat lower. Outside markets were mixed with equities lower but the US$ lower as well. Beef prices continue to rally which is supportive, yet yesterday’s move higher does not impact the technical picture at all as cattle and hog futures remain choppy. Cash feedlot trade so far this week reported on light volume at $110 live which is steady with last week. Later this morning, the Fed Cattle Exchange online auction will be held with only 930 head consigned.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 11/16/2020
Total Receipts: 9,010 Last Week: 5,437 Last Year: 7,812
Compared to last week, steer calves under 450 lbs steady to 5.00 higher, steer calves over 450 lbs steady, heifer calves steady to 3.00 higher, yearlings steady, except 650 to 700 lbs steers steady to 6.00 higher. Demand good, supply heavy.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 11/16/2020
Total Receipts: 13,829 Last Week: 11,125 Last Year: 13,355
Compared to last week: Feeder steers 1.00 to mostly 4.00 lower. Feeder heifers steady to 3.00 lower. Bulk of supply calves. Steer calves 4.00-8.00 higher. Heifer calves steady to 2.00 higher. Light weight (under 500 lbs) steer and heifer calves selling 10.00-15.00 higher. Demand very good for steer calves; moderate for heifers. Quality average to attractive.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 11/16/2020
Total Receipts: 5,314 Last Week: 4,187 Last Year: 4,874
Compared to last week: Steers 4.00-6.00 lower. Heifers 5.00-7.00 lower. Quality good thru attractive. Demand good. Slaughter cows mostly steady to 2.00 higher. Slaughter bulls 4.00 higher.
Cattle slaughter from Tuesday estimated at 121,000 head, up 1,000 from last week and from last year. Hog slaughter from Tuesday estimated at 493,000 head, matching last week but down 5,000 compared to a year ago.
Boxed beef cutout values Tuesday, sharply higher on Choice and higher on Select with 142 loads sold.
Choice Cutout__233.72 +6.77
Select Cutout__213.96 +1.61
CME Feeder Index__137.55 -.13
CME Lean Hog Index__70.08 -.76
Pork Carcass Cutout__78.60 -2.55
IA-S.MN Wtd Avg Carcass Base__58.88 +.40
National Wtd Avg Carcass Base__58.66 -.24
December live cattle with support at $109.70, the convergence of the 50-day and 100-day moving averages, and nearby resistance at $113 then the recent high from August at $114. November feeders holding a higher trend this past month with support around $135 then around $129 and resistance at $142 then just shy of $145. December lean hogs breaking the long-term higher trend with choppy, range bound trade over the past month from $64 to $70.
Over in the grains, the soy complex continues to lead the way higher with new contract highs yet again. Daily sales have been absent recently and weekly sales last week were a marketing year low for soybeans. South American weather though taking hold and supporting the current rally as areas of Southern Brazil continue to suffer and forecasts pulled what little chances were present a day ago back out. Soybeans look to be entering a demand rationing phase as the U.S. crop was smaller than initially expected this year, China continues to gobble up every available source and now the markets are concerned, although early in the growing season, about a shrinking crop in Brazil. Gulf values for corn on the rise two weeks ahead of delivery for December corn. December to March corn futures were able to widen out to +10 to the March, still not enough to justify storing commercially but would pay on the farm, now back to single digits and getting tighter, maybe looking to invert if gulf values remain strong.
Overnight grains were steady to higher again led by the soy complex as new contract highs were hit yet again. Corn finished the overnight 1 to 3 higher, soybeans 6 to 12 higher and wheat steady to 3 higher.
USDA reported a private sale this morning of 140,000 MT or 5.5 MBU of corn for delivery to unknown destinations. We will see some U.S. trade today as Japan is in for its weekly tender, Taiwan looking for US milling wheat and Thailand announced a snap tender for optional origin feed wheat.
Heavy rain still expected for the WCB over this coming weekend and rolling east into early next week. The 6-10 day outlook showing above normal temps for all areas except the West Coast with above normal moisture in the PNW and Midwest into New England and below normal stretching from the Southwest through the Plains up to the Canadian border.
As expected, central and northern Brazil received beneficial rains overnight with a broader coverage expected today. Argentina though was mostly dry with some light rain in the forecast for next week. The current weather outlook looks to limit crop stress in both countries for the time being. Brazil is near complete in planting their first crop corn as Argentina is only about ½ done.
December corn with support at $4.09 then at $3.93 and resistance at the new contract high hit last week at $4.28. January soybeans hit a new contract overnight at $11.84 with support around the $11 mark. Looking at a continuous weekly chart, the nearby contract hit $12.08 ½ back in June 2016. December KC wheat still barley holding the higher trend going back to early August with support at $5.32 and resistance at $5.70. December Chicago has held a higher trend since late June, lower trade this week will break that higher trend though. Support is at $5.86 with resistance up at $6.13. December soybean meal with support at $390 and the contract high at $401.1 last week, a price level not seen since May 2018 when the nearby contract hit $404.90. In June 2016 the nearby contract hit $432.50.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700