Date: December 9th, 2020
Livestock futures trading both sides of unchanged yesterday. Feeders tried to rally as corn prices were lower. Lean hog futures did hold onto small gains as pork prices continue to rally. Cash feedlot trade reported in KS and TX, roughly $2 lower than last week’s average at $108 live with dressed trade in the North at $170. Beef prices continue sharply lower after peaking in late November. There is some concern that inventories were building and now may not be needed as many areas of the country move back to stay at home orders in which in house restaurant dining has again been closed.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 12/8/2020
Total Receipts: 9,099 Last Week: 4,507 Last Year: 5,879
Compared with last Tuesday: Steer calves 2.00 to 3.00 higher instances 5.00 higher on 600 to 700 lbs. Heifer calves 2.00 to 3.00 higher except for 500 to 600 lbs 5.00 to 8.00 higher. Yearling feeder steers over 700 lbs steady to 2.00 lower. Yearling feeder heifers over 700 lbs steady to 3.00 higher.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 12/8/2020
Total Receipts: 3,933 Last Week: 3,376 Last Year: 3,038
Compared to last week, steers sold mostly steady but with spots 3.00 higher to 3.00 lower. Heifers sold steady to 5.00 lower, except for 350- 425 lb calves selling with a higher undertone. Demand was moderate to good, best for the higher quality loads of yearlings and calves to graze. Supply was heavy with many loads of yearlings and groups of calves.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 12/8/2020
Total Receipts: 3,353 Last Week: 4,262 Last Year: 3,732
Compared to a week ago, feeder steers and heifers traded unevenly steady from 3.00 lower to 3.00 higher with some peewee steers 8.00 higher. Demand was good early and moderated throughout the day.
Cattle slaughter from Tuesday estimated at 115,000 head, down 7,000 from last week and down 9,000 from last year. Hog slaughter from Tuesday estimated at 496,000 head, up 8,000 compared to last week and up 6,000 compared to a year ago.
Boxed beef cutout values sharply lower again on Tuesday on strong demand, 228 loads sold.
Choice Cutout__225.02 -5.78
Select Cutout__205.42 -4.06
CME Feeder Cattle Index__137.34 -.94
CME Lean Hog Index__65.60 -.19
Pork Carcass Cutout__78.12 +.22
IA-S.MN Wtd Avg Carcass Base__56.23 -.37
National Wtd Avg Carcass Base__55.62 +.25
December live cattle holding a lower trend since mid-August with cash convergence and nearby support right around $108 and resistance around $110. The December contract is in delivery with volume getting thin and will expire at the end of the month. February live cattle also holding a lower trend with support around $106 and resistance at $113. January feeders holding a higher trend since mid-October but still unable to test above the $145 area since August with support around $135. December lean hogs still choppy with support around $64 and resistance at $68.
Grains stayed mostly in the red on Tuesday led lower again by the soy complex. Rumors also swirling yesterday that China purchased up to 1 MMT, over 39 MBU, of Brazilian new crop corn. This would of course make it even more difficult for the U.S. to meet the lofty and all-time record corn export estimate for this marketing year posted by USDA last month at 2.65 BBU. Year to date inspections are only at 16% of that total and while total commitments through November 26th are over 1.5 BBU or nearly 57%. South American weather still looks less threatening with rain coverage looking better for Brazil than Argentina in the rest of this week’s forecast and mixed for the weekend yet still below normal for both.
Grains bouncing back overnight with corn finishing steady to 1 higher, soybeans 3 to 9 higher and wheat steady to 5 higher.
USDA announced a private sale of 257,071 MT or 10.1 MBU of corn sold for delivery to Mexico. Taiwan reportedly purchased 65,000 MT or 2.6 MBU of U.S. corn. Japan in its weekly tender, purchased a total of 83,405 MT or 3.1 MBU of U.S. milling wheat.
President-elect Joe Biden plans to nominate former Iowa Gov. Tom Vilsack as Secretary of Agriculture, a position he held for eight years during the Obama presidency. It appears Vilsack became the safe and comfortable choice for Biden.
Average Trade Estimates for USDA Monthly Crop Report Thursday at 11am CST
US 20/21 Corn ending stocks at 1.690 BBU vs. November’s 1.702 BBU
US 20/21 Soybean ending stocks at 168 MBU vs. November’s 190 MBU
US 20/21 Wheat ending stocks at 875 MBU vs. November’s 877 MBU
World 20/21 Corn ending stocks at 289.3 MMT, November at 291.43 MMT
World 20/21 Soybean ending stocks at 85.11 MMT, November at 86.52 MMT
World 20/21 Wheat ending stocks at 321.1 MMT, that compares to November’s 320.45 MMT, increases expected for Canada and Australia.
Argentina’s 20/21 Soybean production at 50.4 MMT, off from the 51.00 MMT in November Brazil’s 20/21 Soybean crop production at 132.3 MMT, off from the 133.0 MMT last month
Argentina’s 20/21 Corn production at 49.25 MMT, off from the 50.00 MMT in November
Brazil’s 20/21 Corn crop production at 109.1 MMT, off from the 110.0 MMT last month
Light rains up to an inch fell in major growing areas of central and southern Brazil overnight. A mix of rain and snow expected through the central part of the U.S. this week with heavy rain expected in the Mississippi River Valley over the weekend. The 6-10 day outlook showing normal to above normal temps for the entire country expect in the Southeast with above normal moisture in the PNW and across the Northern Border States and below normal moisture for the Southwest, Southern Plains and into the Corn Belt.
March corn hit a new contract high last week at $4.39 ½ with resistance from the continuous weekly chart next at $4.50 and support at $4.14. January soybeans contract high was hit November 23rd right at the $12 mark, with nearby support just above $11.40. March KC wheat breaking support this past week with support next at $5.28 and resistance at $5.54. March Chicago wheat trending lower since mid-October with support next around $5.50 and resistance at $6.08. January Soybean Meal with a contract high at $401.30 on November 25th yet trending lower since. Support is being tested along the 50-day moving average currently at $376 with resistance up around $390.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700