Date: February 10th, 2021
Livestock and grain futures mixed yesterday with cattle futures and soybeans finished mostly higher while corn and wheat lower. Cash feedlot trade very light so far this week on some cleanup trading at $178 dressed in the Western Corn Belt and $114 to $114.25 live in TX and KS. Asking prices to move sizeable volume as high as $117 live and $185 dressed. The largest supplies of slaughter ready cattle are behind us now which should lead to trading leverage in the hands of feeders. Bitter cold weather throughout the plains this week will impact gains, most cattle will perform poorly and some will lose weight.
USDA updated supply and demand yesterday with the largest change on the livestock side for U.S. beef production in 2021 increased by 350 million pounds. Beef exports for this year were increased by 55 million pounds. Pork production was increased by 145 million pounds yet exports were left unchanged. Total poultry production was only increased by 10 million pounds compared to last month’s estimates while exports were reduced by 15 million pounds.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 2/8/2021
Total Receipts: 2,928 Last Week: 4,016 Last Year: 4,817
Compared to last Monday, steers and heifers under 700 lbs. traded 2.00-5.00 lower; over 700 lbs. traded steady.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 2/8/2021
Total Receipts: 7,200 Last Week: 10,758 Last Year: 7,598
Compared to last week: Feeder steers steady to 2.00 lower where tested. Steer calves mostly 4.00-8.00 lower. Feeder heifers and heifer calves unevenly steady. Demand moderate.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 2/9/2021
Total Receipts: 3,450 Last Week: 2,692 Last Year: 1,506
Compared with last Tuesday: Feeder steers under 550 lbs steady to 2.00 lower, 550 to 700 lbs 3.00 to 5.00 higher, over 700 lbs steady to 1.00 higher. Feeder heifers under 550 lbs mostly steady instances 5.00 higher on thin fleshed fancy lots, 550 to 700 lbs 1.00 to 3.00 higher, over 700 lbs steady. Slaughter cows steady to 1.00 higher. Slaughter bulls 3.00 to 5.00 higher.
Cattle slaughter from Tuesday estimated at 115,000 head, down 3,000 from last week and down 9,000 from last year. Hog slaughter from Tuesday estimated at 494,000 head, up 5,000 compared to a week ago and up 2,000 compared to a year ago.
Boxed beef cutout values on Tuesday lower on Choice and steady to higher on Select with 121 loads sold.
Choice Cutout__234.29 -1.91
Select Cutout__220.73 +.12
CME Feeder Cattle Index__135.63 +.16
CME Lean Hog Index__71.07 +.67
Pork Carcass Cutout__85.36 +.49
IA-S.MN Wtd Avg Carcass Base__65.28
National Wtd Avg Carcass Base__64.10
February live cattle hitting a new recent high yesterday at $118.40 with a gap left to fill from last February from $118.57 to $119.47 and the high that month the next line of resistance at $121.57. March feeders holding support yesterday at the 100-day moving average now at $137.17 with resistance around $145. February lean hogs hitting a new recent high last week at $73.25 with resistance next up at $74.50 and support at $71.
The USDA supply and demand report for the crops was mixed with corn still the focus of the markets and the 50 MBU cut to U.S. ending stocks much less than expected. World corn stocks increased 2.7 MMT vs. expectations of a 4 MMT decrease. Good news though on the world balance sheet as USDA increased the China import estimate by 6.5 MMT. Wheat followed corn lower even though U.S. stocks unchanged and world stocks down a surprising 9 MMT. China wheat feeding increased by 5 MMT and India domestic consumption increased by 3.5 MMT. Soybeans pulled back from their highs as well but did hold gains into the close as U.S. ending stocks were decreased by the expected 20 MBU to now a very tight 120 MBU. World stocks decreased the equivalent, nearly 1 MMT. USDA did not adjust Brazil or Argentina corn and soybean production estimates as the market was expecting to see a reduction of .5 to 1 MMT for each crop.
Overnight, grains were under continued selling pressure with soybeans finishing 13 to 17 lower, corn 6 to 10 lower and wheat 2 to 9 lower.
News overnight very light. The weekly fuel report will be out later today with expectations for an increase in both ethanol production and stocks to increase 1%. No daily export sales announced by USDA again this morning, none so far this week. The announcement today was a cancellation of 132,000 MT or 5.2 MBU of corn for delivery to unknown destinations. Weekly export sales will be out tomorrow morning, we will see if China pieced together any additional corn purchases following their recent buying frenzy.
Much below normal temps continue this week with colder temps and wind chill still to come this weekend. The 6-10 day outlook still showing well below normal temps across most of the country and above normal moisture.
March corn hitting a new contract high yesterday at $5.74 ¼ prior to the report and then reversing lower with support at $5.36 ½. March soybeans contract high from mid-January at $14.36 ½, we finally got back above the $14 mark yesterday with support around $13.65. March KC wheat still holding the long-term higher trend with support at $6.05, resistance at $6.48 and the contract high at $6.60. March Chicago wheat with support at $6.25, resistance at $6.72 and the contract high at $6.93. March soybean meal with support at $420 and resistance at $443.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700