Date: January 6th, 2021
Wild swings in all the commodity markets continue for this the second trading day of the New Year. Almost all commodity and equities finished higher yesterday with US$ settling at new lows. Cattle futures collapsed triple digits lower on Monday looking like they were finally reacting to corn and meal prices higher almost every day over this past month. Yet that was not the case yesterday as they were able to gain back most of Monday’s losses reversing back higher. Cattle futures have traded near $4 ranges the past 2 days. Both cash feedlot trade and beef prices rallied to end last year which is supportive yet availability remains plentiful for the packers here in the near term. Only some light cash trade so far this week steady with a week ago at $112 live and $175 dressed. Domestic meat demand remains under pressure with COVID surging again in many areas. Exports have helped in the recent months but remember there sure isn’t the same demand at home or waste as there is in full capacity restaurants.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 1/4/2021
Total Receipts: 11,730 Last Report: 7,612 Last Year: 13,074
Compared to the last auction two weeks ago, feeder steers under 600 lbs. sold 2.00-5.00 higher, over 600 lbs. steady to 5.00 lower. Feeder heifers sold 3.00-5.00 lower, except those under 500 lbs. which sold steady to 4.00 higher. The supply of feeders was heavy with several load lots of heavier weight yearlings in the offering. Demand was moderate to good especially for thin fleshed pee wee calves.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 1/4/2021
Total Receipts: 12,154 Last Report: 10,744 Last Year: 12,072
Compared to the last sale on 12/14/20: Feeder steers 1.00-4.00 lower. Feeder heifers steady to 3.00 lower. Steer calves steady to 2.00 lower. Heifer calves steady to 3.00 higher.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 1/4/2021
Total Receipts: 2,821 Last Report: 1,730 Last Year: 4,194
Compared to the last sale on December 14th: Steers 7.00-9.00 higher. Heifers 8.00-10.00 higher. Demand good. Quality plain thru attractive. Slaughter cows steady to 2.00 higher. Slaughter bulls 2.00 higher.
Cattle slaughter from Tuesday estimated at 118,000 head, up 2,000 from last week but down 5,000 from last year. Hog slaughter estimated at 489,000 head, up 38,000 compared to a week ago but down 8,000 compared to a year ago.
Boxed beef cutout values on Tuesday were sharply lower on Choice and steady on Select on strong demand and 204 loads sold.
Choice Cutout__205.90 -3.97
Select Cutout__196.49 -.04
CME Feeder Cattle Index__136.13 -.42
CME Lean Hog Index__61.47 +.85
Pork Carcass Cutout__77.63 -.14
IA-S.MN Wtd Avg Carcass Base__53.89
National Wtd Avg Carcass Base__54.69
February live cattle with a key reversal lower on Monday followed by the key reversal higher on Tuesday, still holding a higher trend since late October with support at $110.60 and resistance at $116.60. January feeders sideways and choppy trade the past couple months with nearby support taken out this week and the next support level down at $133 with resistance at $142. February lean hogs finally able to break their sideways pattern with a breakout to the upside the end last week. Nearby support is just above $66 with resistance tested on Monday at $72.
Grains again led by the soybeans with now 12 consecutive trading days with a new contract high. It has been awhile since we have seen this kind of rally, 2012 and 2007 both jump out on the charts with bigger moves though. There really hasn’t been much new bullish news just continued record domestic crush and exports and weather concerns for the next new crop available from South America. The demand rationing rally though has continued and kicked it up a notch with 40 cent ranges traded on Monday and 60 cent ranges traded yesterday. Corn new contract highs were hit Monday, that capped a 9-day consecutive streak, while wheat futures followed with new highs yesterday but exports for both need to pick up the pace to meet the current USDA estimates.
Overnight, soybeans continue to lead the charge higher with new contract highs again for both soybeans and corn. Soybeans finished 12 to 21 higher, corn 3 to 4 higher and wheat 1 to 5 higher.
Argentina with another strike expected, this time a 3-day strike from farmers to begin next week to protest the government decision to suspend corn exports. Argentina has already shipped approximately 90% of their expected amount yet it does solidify the fact that U.S. corn is the main source until new crop supplies again available in South America.
Private estimates begin coming out this week ahead of next Tuesday’s USDA supply and demand report. Most are expecting to see another cut to Argentina’s corn and soybean production as USDA trimmed both 1 MMT in December. USDA left Brazil unchanged last month yet some private estimates looking for cuts of 2 to 5 MMT this month.
USDA reported a private sale this morning of 102,616 MT or 4 MBU of corn for unknown destinations.
Rains moving through parts of Southern Plains here today. The 6-10 day outlook showing above normal temps for the West Coast and Northern Border States and below normal in Southeast with below normal moisture in the Southwest and from the Southeast up to the Great Lakes.
March corn with a new contract high overnight at $5.02 ¾. The next resistance from the continuous weekly chart up at $5.19 ½ from 2014. January soybeans now in delivery with a new contract high overnight at $13.75 ¾. March new contract high at $13.78 ¼ with $14 to $14.10 the next high mark also from 2014. March KC wheat, a new high yesterday at $6.16 ½ with support at $5.75. March Chicago new contract high yesterday at $6.64 ½ with support at $6.07. March Soybean Meal a new contract high overnight at $444.10.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700