Date: January 25th, 2021
Livestock futures sharply higher to end last week with the heaviest volume March feeder contract limit higher. Beef prices pushed higher last week as well but cash feedlot trade was only able to remain steady with the week previous. Trade in South mostly $110 to $111 live and in Nebraska at $110 to $111 live and mostly $173 on a dressed basis. Friday’s Cattle on Feed report was a little bearish with on feed and placements higher than expected. Cattle on
Feed as of January 1st totaled 12.0 million head, slightly above a year ago. December Placements totaled 1.84 million head, 1% above 2020. Marketings of fed cattle during December totaled 1.85 million head, also 1% percent above 2020.
For the week, Friday January 15th through Friday January 22nd, February Live Cattle +$3.95, April +$4.32, January Feeder Cattle +$2.67, March +$8.32, February Lean Hogs +$2.00, April +$3.50, February Pork Cutout Futures +$2.97. Boxed Beef, Choice +$9.90 @$222.82, Select +$10.26 @ $213.34, Pork Carcass Cutout +$2.76 @ $82.83.
Cattle slaughter from Friday estimated at 119,000 head, up 4,000 from the week previous but down 2,000 from last year. Saturday’s kill estimated at 69,000 bringing the weekly total to 657,000 head, up 6,000 from the week previous and up 14,000 from last year. Hog slaughter from Friday estimated at 490,000 head, up 112,000 compared to the week previous and matching a year ago. Saturday’s kill estimated at 327,000 bringing the weekly total to 2,738,000 head, up 97,000 compared to the week previous and up 31,000 compared to a year ago.
Boxed beef cutout values on Friday were higher with 143 loads sold.
Choice Cutout__222.82 +1.62
Select Cutout__213.34 +3.06
CME Feeder Cattle Index__133.99 +.80
CME Lean Hog Index__65.55 +.15
Pork Carcass Cutout__82.83 +2.57
IA-S.MN Wtd Avg Carcass Base__54.37
National Wtd Avg Carcass Base__55.46
February live cattle breaking through nearby resistance on Friday into a new 10-month high with resistance next up at $118.50 and support at $113. January feeders expire on the 28th. The March feeder cattle contract carrying the highest daily volume now, also breaking nearby resistance last Friday. The contract high is up at $145.30 with support at $136.50. February lean hogs holding the higher trend with support at $66 and resistance at $72.
Grains under massive pressure for most of last week with the largest slide coming Friday. South American weather has improved recently but I wouldn’t call this collapse led by any new bearish fundamental development. Friday’s move is just another example of how dynamic and volatile trade action will be from day to day. I have talked about the need to ration demand for both soybeans and corn as ending stock projections continue to tighten. It is though only January and the markets may have extended themselves a bit here recently. The markets certainly needed a pullback, we will see if that’s all this was or a shift into a new price range. If basis begins to firm and reach into new seasonal highs, that could be the signal for another futures rally to ration demand.
For the week, Friday January 15th through Friday January 22nd, March Corn -$.31, May -$.31 ¾, March Soybeans -$1.05, May -$1.03, March KC Wheat -$.29 ¾, May -$.29, March Chicago Wheat -$.41, May -$.40 ½, March MPLS Wheat -$.30 ¾, May -$.30 ¼, March Soybean Meal -$41.60/T, May -$40.60/T.
Overnight, grains were mixed trading both sides of unchanged. It will take the day session trading to see if funds continue their recent liquidation of long positions. Corn finished the overnight 1 to 3 lower, soybeans 3 to 5 lower and wheat steady to 3 lower.
No USDA export sales announced today and only a couple wheat tenders so far with one from Turkey and another from Taiwan.
South American weather holding a below normal precip pattern for Northern and East Central Brazil while Argentina expected to see two rounds of rain this week. A mix of rain and snow moving through the Plains today and then into the Midwest and Southeast this week. The 6-10 day outlook showing below normal temps on the West Coast and above normal temps centered on the Southern Plains stretching across the eastern half of the U.S. with above normal moisture from the PNW and West Coast through the Corn Belt, below normal in TX and FL.
March corn pulling back nearly $.50 from the contract high on January 13th with nearby support around $4.90. March soybeans off $1.38 from the contract high with support next around $12.50 and nearby resistance at $13.50. March KC wheat off $.52 from the contract high with support at $5.95. March Chicago wheat off nearly $.70 with support at $6.14 and resistance at $6.59. March soybean meal slipping $54/T from the contract high with support next at $408.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700