Date: December 21st, 2020
Livestock futures finished the week mixed but held gains week over week. Cash feedlot trade held off towards the later part of the week in the South at $108 live which is steady with the week previous. Feedlots in the North started giving up earlier last week at $105 live and $165 dressed, $3 to $5 lower than the week previous, as they did not want to hold already heavier cattle through the holiday shortened weeks. Weekly export sales were routine for beef again this past week as pork sales and shipments continue to be very impressive. Friday’s USDA Cattle on feed report was friendly as expected with 12.0 million head on feed as of December 1st, just slightly above a year ago. Placements in feedlots during November totaled 1.91 million head, 9 percent below 2019 and Marketings of fed cattle during November totaled 1.78 million head, 2 percent below 2019.
With an outbreak of COVID-19 at a Cargill beef plant in Ontario Canada, the company said it will temporarily close the facility. No date has been set to reopen. The facility reportedly employs 950 people. 82 workers tested positive, and another 129 are self-isolating.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 12/18/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 237,200 42,000 26,700 305,900
Last Week: 354,700 27,000 8,500 390,200
Year Ago: 223,000 45,500 14,000 282,500
Compared to last week, steers and heifers sold steady to 3.00 higher. Receipts this week are typical for the last full marketing week of a year when some producers want to sell before winter weather really gets here. Some will also defer payment at their local auction markets to the next year. Over the next two weeks, livestock auction volumes will be very limited with several acknowledging the holidays in front of them and letting employees rest up for the receipts that will be substantial the first full week of 2021.
For the week, Friday December 11th through Friday December 18th, December Live Cattle +$1.72, February +$1.60, January Feeder Cattle +$.72, March +$1.75, February Lean Hogs +$2.57, April +$2.42. Boxed Beef, Choice -$5.25 @ $208.63, Select -$1.44 @ $194.27. Pork Carcass Cutout -$8.24 @ $71.47.
Cattle slaughter from Friday estimated at 117,000 head, down 1,000 from the week previous but up 1,000 from last year. Saturday’s kill estimated at 69,000 head bringing the week to date to 659,000 head, down 6,000 from the week previous and down 9,000 from last year. Beef production last week estimated at 553.5 million pounds. Year to date beef production -0.9% compared to last year with cattle slaughter -3.3%.
Hog slaughter from Friday estimated at 481,000 head, down 9,000 compared to week previous and compared to a year ago. Saturday’s kill is estimated at 380,000 bringing week to date up to 2,792,000 head, up 30,000 compared to the week previous but down 33,000 compared to a year ago. Pork production last week estimated at 611.3 million pounds. Year to date pork production +1.8% compared to a year ago with hog slaughter +0.7%
Boxed beef cutout values Friday, lower on Choice and higher on Select with 115 loads sold.
Choice Cutout__208.63 -.88
Select Cutout__194.27 +.57
CME Feeder Cattle Index__138.48 +1.29
CME Lean Hog Index__63.72 -.67
Pork Carcass Cutout__71.47 -1.75
IA-S.MN Wtd Avg Carcass Base__51.00 -.68
National Wtd Avg Carcass Base__51.09 -.98
December live cattle breaking nearby resistance last week and now premium to cash. February live cattle also breaking nearby resistance and the lower trend with support at $112.50 and resistance next up at $115. January feeders holding a higher trend since mid-October with support at $136.50 and resistance at $142. February lean hogs choppy the past 2 months with support at $63 and resistance at $67.
Grains led higher again by the soy complex as we hit new contract highs for the 2nd day in a row and prices not seen since 2014. Record exports and record domestic crush along with South American weather mostly dry still concerning the markets. Higher prices are still justified to try and ration demand. Corn followed higher as well, but still a penny away from taking out the contract high hit last month. Wheat futures were down some this past week as U.S. winter news is typically not an impact. This past week though Russia confirmed an export tax around $30/MT and an export quota to try and reduce domestic food prices. Now customs documents are being delayed and export offers were pulled on Friday. This along with the US$ into new lows could be enough to stimulate some additional export demand.
For the week, Friday December 11th through Friday December 18th, March Corn +$.14, May +$.12 ¾, January Soybeans +$.59 ½, March +$.58, March KC Wheat -$.12, May -$.11, March Chicago Wheat -$.06 ¼, May -$.04 ¾, March MPLS Wheat -$.01 ½, May -$.01, January Soybean Meal +$25.20/T, March +$23.90/T.
Overnight markets started higher for all grains with corn and soybeans hitting new contract highs. Grains reversed lower as updated forecasts increased rain chances for central Brazil. Corn finished the overnight 2 to 3 lower, soybeans steady to 5 higher and wheat 4 to 9 lower.
Outside markets, equities and energies, under pressure as the UK is reporting a highly contagious new strain of COVID which led to many countries cutting off transportation. The new strain is said to be up to 70% more transmissible but there is no evidence yet that it is more deadly.
Over the weekend, both Argentina and Brazil received some moisture as expected. Again, the updated forecasts increasing chances for central Brazil. The U.S. 6-10 day outlook showing above normal temps through the central part of the country with below normal on the East Coast and above normal moisture from the West Coast into the Southern Plains with below normal from the Great Lakes to the East Coast.
March corn hitting a new contract high at $4.40 overnight with support at $4.27. January soybeans also a new contract high, for the third consecutive trading day in a row, overnight at $12.37 ¼ with support around $11.60. March KC wheat with resistance at $5.88 and support at $5.57. March Chicago wheat with resistance at $6.22 and support at $5.90. January Soybean Meal also a new contract high overnight at $413.30 and support at $376.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700