Date: December 30th, 2020
Cattle futures tried to hold on but with corn and the soy complex hitting new contract highs again, the lackluster trading allowed pressure to spill over pushing both live and feeder cattle triple digits lower yesterday. Beef prices moving higher indicating good Christmas clearance is overall supportive. Cash feedlot trade asking prices this week $2 to $5 higher than last week’s trade at $110 live yet no activity to report.
No salebarn reports for this week as most are closed for holidays and resume next week. The following are the only state recaps for the week ending December 24th…
Missouri Weekly Cattle Auction Summary
Livestock Weighted Average Report for 12/18/2020 – 12/24/2020
Compared to last week, feeder calves traded mostly steady to 3.00 lower and yearlings traded steady to 2.00 higher on a very light test. Sales were quite limited, as many barns across the state were closed this week.
Nebraska Weekly Livestock Auction Summary
Livestock Weighted Average Report for 12/18/2020 – 12/24/2020
Compared to last week steer calves under 700 lbs sold 2.00 to 4.00 lower, over 700 lbs sold steady. Heifer calves under 700 lbs sold steady to 4.00 higher; 700 lbs to 800 lbs 2.00 lower with all other weights steady. Demand was good for the light supply of calves and feeder on hand this week. Demand was moderate at best for the bred heifers and cow receipts.
Cattle slaughter from Tuesday estimated at 116,000 head, down 3,000 from last week but up 15,000 from last year. Hog slaughter from Tuesday estimated at 465,000 head, down 8,000 compared to last week but up 57,000 compared to a year ago.
Boxed beef cutout values Tuesday, sharply higher on Choice and lower on Select with 144 loads sold.
Choice Cutout__210.30 +2.48
Select Cutout__195.48 -1.17
CME Feeder Cattle Index__138.29 -.17
CME Lean Hog Index__59.93 -.67
Pork Carcass Cutout__72.36 +.51
IA-S.MN Wtd Avg Carcass Base__50.52 +.58
National Wtd Avg Carcass Base__50.06 +.24
December live cattle expire tomorrow. February live cattle holding a higher trend since late October with support at $113 and resistance at $116.60. January feeders holding a higher trend since mid-October with support around $139 and resistance at $142. February lean hogs choppy the past 2 months with support at $63 and resistance at $69.
Again, corn, soybeans and meal into new contract highs, that is the 8th consecutive trading day of new contract highs for the nearby January soybean contract and 11th consecutive higher settlement and 6th consecutive new contract high for March corn. US$ down to levels not seen since the spring of 2018 with the bottom set that year another point and half lower than current values, breaking that area would lean to a test of the 2014 lows. Argentina labor strike still ongoing as of the close and has stalled the export loading of more than 160 ships since December 9th. Late last night, Argentina’s soybean processors signed a contract with labor ending the 20-day strike.
Argentina did receive some much needed near term rain relief but forecasts looking hot and dry over the next couple weeks. Brazil is in much better shape overall with spotty continued dryness in mostly the southern growing regions. Private estimates already trimming Argentine corn and soybeans another 1 MMT while leaving Brazil alone for now. Wheat was a follower higher yesterday. Private estimates for Russian wheat continue to lower production estimates and now export estimates with the new quota and tax announced earlier this month. USDA though increased both production and exports for Russia by ½ MMT in its December WASDE report.
There is currently a general upward trend that is common to all of the Ag commodities. The overall supporting factors include the arrival of the COVID vaccine holding the promise of ending the pandemic, FED policy decision to hold interest rates low for the foreseeable future, and the latest stimulus package along with promises for more relief next year. These actions have brought the dollar to a multi-year low making our exports less expensive and our imports more expensive. This also means a recovering economy and assured inflation as all prices are headed higher.
Overnight grain markets were mostly steady to lower following the massive rally yesterday. This could be the calm after the storm as this is another holiday shortened week with markets closing early tomorrow and closed on Friday. Corn and wheat finished 1 lower to 1 higher while soybeans pulled back to finish to 2 to 6 lower.
Taiwan purchased 82,325 MT or 3 MBU of U.S. milling quality wheat overnight but no pirvate sales announced by USDA this morning.
Another winter storm moving through the area over New Year’s as heavy rains move through the Southeast. The 6-10 day outlook showing normal to above normal temps for all except in the Southwest with normal to above normal moisture for all except on the East Coast.
March corn new contract high yesterday at $4.67 ¼ which breaks the spot high from the summer of 2019. The next on the continuous weekly chart up at $5.19 ½ from 2014. January soybeans new contract high yesterday at $12.98 ¾ with nearby support around $12.45. March KC wheat, a new recent high at $5.93 last week with support at $5.66 ½. March Chicago wheat with resistance at $6.33 ¾ and support at $6.05. January Soybean Meal a new contract high yesterday at $428.90 and support around $398.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700