Date: January 20th, 2021
Tuesday livestock futures traded mixed with nearby live cattle higher but deferred contracts lower, all but the soon to expire January feeder cattle contract higher and lean hogs futures triple digits lower. The soy complex was sharply lower and corn following allowing feeders to catch a break after being under pressure the past few weeks. Cash feedlot trade last week was disappointing at lower money and larger volumes than expected with over 60K head committed for delivery in the next two weeks and over 35K head for delivery 15 to 30 days out. So far this week, only some light trade in TX at $110.50 live and in the Western Corn Belt at $105.
There continues to be enough supply for packers and even with beef prices higher these past few days, cash trade will struggle to rally until we hit the 2nd quarter.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 01/16/2021
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 313,400 63,800 157,300 534,500
Last Week: 349,800 40,300 87,300 477,400
Year Ago: 281,400 49,300 61,700 392,400
Compared to last week, steers and heifers sold 2.00 to 4.00 lower in the North Central and South Central regions, while calves suitable for grazing out of the Southeast sold 2.00 to 4.00 higher. Even though the receipts at auctions weren’t as large as last week, the receipts nationwide still topped the 300K mark this week. Demand was reported as good to even very good in some auctions, but at lower price levels than the previous week in the Plains. The most talked about factor this week was the increase of grain prices and how it will affect the feeder and slaughter cattle markets moving forward. With the sharp increase in feedstuff protein prices, feedlot breakevens escalate significantly. That leaves the cattle feeder in a position to continue to buy cattle but at lower values.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 1/18/2021
Total Receipts: 7,124 Last Report: 7,392 Last Year: 6,469
Compared to last week, steers traded steady to 3.00 lower. Heifers also traded steady to 3.00 lower. Supply moderate with good demand.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 1/18/2021
Total Receipts: 17,343 Last Report: 10,752 Last Year: 12,638
Compared to last week: Feeder steers and heifers steady to 4.00 lower with most declines being seen on plainer type cattle. Steer and heifer calves under 500 lbs 2.00-6.00 higher; over 500 lbs steady to 2.00 lower. Demand moderate to good for all classes, especially for 4 weight and under steers. Quality average to attractive.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 1/19/2021
Total Receipts: 5,980 Last Report: 7,813 Last Year: 5,039
Compared with last Tuesday; Steer calves under 450 lbs 1.00 to 3.00 higher, 450 to 500 lbs 3.00 to 5.00 lower, 500 to 550 lbs 2.00 to 4.00 lower, over 550 lbs steady to 2.00 lower. Heifer calves under 550 lbs steady to 2.00 lower except for 350 to 400 lbs 3.00 to 5.00 lower, 600 to 700 lbs 1.00 to 3.00 lower. Feeder steers and heifers over 700 lbs steady to 1.00 higher. Slaughter cows and bulls mostly steady.
Cattle slaughter from Tuesday estimated at 117,000 head, up 2,000 from last week but down 7,000 from last year. Hog slaughter from Tuesday estimated at 498,000 head, matching a week ago and up 2,000 compared to a year ago.
Boxed beef cutout values on Tuesday were higher with 148 loads sold.
Choice Cutout__217.49 +2.45
Select Cutout__206.44 +.60
CME Feeder Cattle Index__132.90 -.53
CME Lean Hog Index__65.92 -.36
Pork Carcass Cutout__77.42 -1.10
IA-S.MN Wtd Avg Carcass Base__54.63
National Wtd Avg Carcass Base__54.26
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.
March soybeans have now pulled back some $.53, based off yesterday’s close, since hitting the new contract high last week. We saw similar pullbacks the past few months and as of now, nothing fundamentally or technically to get too excited about. South American weather still concerning, more so in Argentina than Brazil and exports continue at a record pace. Inspections for the week ending January 14th were 75.6 MBU with 46.8 MBU heading to China. Year to date sales now stand at 92% of the current USDA estimate and shipments at 71% with 33 weeks left to go in this marketing year. Corn inspections continue to lag at 34.5 MBU, YTD sales at 70% but inspections only 27% of the USDA export estimate for the year. Wheat shipments are also lagging at 10.2 MBU this past week. The increased Russian export tax and duration though supported wheat futures yesterday. Grain sorghum inspections totaled 6.3 MBU, above the weekly average needed and continuing the rapid pace, now +167% vs. last year at this time.
Overnight, soybeans leading the charge sharply lower, down another $.30 which actually is still not overly alarming on the charts. If March soybeans were to break below the $13.42 support then another wave of selling could commence to push prices down to the $13 area or even $12.50. Managed money or the funds are certainly liquidating longs right now and historically, a 3-day run can be expected, and today would be that 3rd day. Fundamentally some much needed recent rains did come through the dry areas of South America easing some of the fear that crops would continue to deteriorate. Chinese soybean futures have been lower the past couple days as well. Corn finished the overnight 5 to 11 lower and wheat 6 to 14 lower.
Customs data from China overnight show imports of U.S. soybeans during 2020 at 25.89 MMT, up +52.8% from 2019 level. They will still fall short of meeting phase one of the trade deal or $36.5 billion obligation. In 2020, China imported 64.28 MMT of Brazil soybeans, which was an increase of +11.5% from 2019. Taiwan reportedly purchased a cargo of U.S. corn. USDA did not have any daily sales to announce.
Snow in the forecast for the Upper Midwest and Rockies 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 except in TX, FL and New England.
March corn filled the gap overnight left from last week’s report reaction that ended with a new contract high last week at $5.41 ½, nearby support around $4.90. March soybeans contract high also last week at $14.36 ½, the next spot high up at $15.11 ¾ from June 2014. The overnight low is down $.84 ½ from the contract high with support at $13.42 then around the $13.00 mark. March KC wheat, a new contract high on Friday at $6.60, with support at $6.05. March Chicago wheat, a new contact high on Friday as well at $6.93 with support at $6.43. March soybean meal a new contract high last week at $471.40, down almost $33 since with support next at $435 then $430.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700