Date: January 19th, 2021
Livestock futures rebounded to end the week but still finished week over week lower. Soaring grains prices continue to provide overall pressure. Cash feedlot trade came under pressure as well this past week trading $1 to $4 lower than the week previous at $109 to $111 live and $172 to $174 on a dressed basis. Mild liquidation still seen has long term friendly for both the cattle and hog markets but demand will have to come back to pre COVID levels before getting too excited for a long lasting rally.
For the week, Friday January 8th through Friday January 15th, February Live Cattle -$1.70, April -$1.10, January Feeder Cattle -$1.25, March -$1.00, February Lean Hogs -$.77, April -$.17, February Pork Cutout Futures +$.85. Choice Cutout +$6.12 @$212.92, Select Cutout + $6.39 @ $203.08, Pork Carcass Cutout -$.93 @ $80.07.
Cattle slaughter last week estimated at 651,000 head, matching the week previous and up 18,000 from last year. Beef production estimated at 544.8 million pounds. Hog slaughter last week estimated at 2,654,000 head, down 195,000 compared to the week previous but up 158,000 compared to a year ago. Pork production estimated at 579.6 million pounds.
Cattle Slaughter from Monday estimated at 115,000 head, down 1,000 from last week and down 6,000 from last year. Hog Slaughter from Monday estimated at 427,000 head, down 71,000 compared to a week ago but up 18,000 compared to a year ago.
Boxed beef cutout values on Monday were higher with 109 loads sold.
Choice Cutout__215.04 +2.12
Select Cutout__205.84 +2.76
CME Feeder Cattle Index__134.45 -1.04
CME Lean Hog Index__65.63 -.24
Pork Carcass Cutout__80.07 -.48
IA-S.MN Wtd Avg Carcass Base__54.30
National Wtd Avg Carcass Base__52.72
February live cattle chopping sideways the past couple months in roughly a $7 trading range. Nearby support at $111.35 and resistance at $114.40 then at $116.00. January feeders holding a lower trend now for 3 weeks, dipping below the December and November lows with support next around $130 then the low from October down at $124.25 and resistance at $138. February lean hogs showing a higher trend with support at $66 and resistance at $72.
Grains pulled back some to end the week as wheat continued into new highs. Overall, all grains hit new highs throughout the week as the bullish USDA crop reports supported the rally to continue. Russia announced increased export taxes and possibly extending those past harvest. Basis levels domestically for corn and soybeans continue to weaken as futures rally but margins tighten. This actually is the focus of the futures market currently to try and ration both corn and soybean demand.
For the week, Thursday December 31st through Friday January 8th, March Corn +$.35 ¼, May +$.37 ¼, March Soybeans +$.42, May +$.43 ½, March KC Wheat +$.48 ¼, May +$.46 ¾, March Chicago Wheat +$.36 ¾, May +$.35 ¾, March MPLS Wheat +$.35 ½, May +$.35 ½, March Soybean Meal +$23.60/T, May +$22.70/T.
Overnight, soybeans down double digits again with corn steady to lower yet wheat still charging higher. Looks to be some profit taking on the fall crops to start the week also China’s soy prices lower. Not much in the way of new news over the extended weekend break. Argentina’s weather forecasts still remain dry with Brazil looking to receive spotty rains. Wheat futures remain excited to see the increased Russian wheat tax and hopeful for more U.S. export business.
USDA announced private sales this morning of 128,000 MT or 5 MBU of corn sold to Japan, 100,000 MT or 3.9 MBU of corn sold to Israel and 132,000 MT or 4.85 MBU of new crop soybeans sold to China.
Snow in the forecast for the Upper Midwest later this week and heavy rains in the Southeast. The 6-10 day outlook showing above normal temps for the Southeast and below normal for the western half of the U.S. with normal to above normal moisture throughout.
March corn contract high last week at $5.41 ½, taking out the 2014 spot high, with the next a crazy to think about at this time at $7.30 mark from July 2013. March soybeans contract high also last week at $14.36 ½, the next spot high up at $15.11 ¾ from June 2014 then $15.36 ¾ from May 2014. March KC wheat, a new contract high on Friday at $6.60, with support at $6.02. March Chicago wheat, a new contact high on Friday as well at $6.93 with support at $6.41. March soybean meal a new contract high last week at $471.40, resistance next up around $500.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700