Date: February 16th, 2021
Livestock futures higher on Friday and higher for the week. Cash feedlot trade disappointing last week though with the high end midweek steady with the week previous at $114 live but faded to end the week with light volume down to $112. Dressed trade in the North held steady at $180. Delivery against the February live cattle contract should get ramped up again as it continues to trade at $3 to $4 premium to cash. There was some chatter that a few slaughter plants may have to shut down heading into this week due to freezing temps and a lack of or redirecting natural gas needs.
For the week, Friday February 5th through Friday February 12th, February Live Cattle +$.47, April +$1.40, March Feeder Cattle +$2.57, April +$2.52, February Lean Hogs +$3.02, April +$4.90, February Pork Cutout Futures +$8.02. Boxed Beef, Choice -$2.21 @$232.37, Select Cutout +$.14 @ $220.93, Pork Carcass Cutout +$4.20 @ $88.38.
Cattle slaughter from Friday estimated at 109,000 head and Saturday only 40,000 head. For the week, 611,000 head, down 42,000 from the week previous and down 10,000 from last year. Weather related problems already affected a few slaughter plants last week and more will have issues this week. Rolling power outages began on Monday and will continue today across the 14-state area of the Southwest Power Pool.
Hog slaughter from Friday estimated at 488,000 head and Saturday at 216,000 head. For the week, 2,664,000 head, down 11,000 compared to the week previous but up 75,000 compared to a year ago.
Boxed beef cutout values yesterday steady to higher with 93 loads sold.
Choice Cutout__232.44 +.07
Select Cutout__221.41 +.48
CME Feeder Cattle Index__135.34 -.15 from 2/11
CME Lean Hog Index__73.15 +.79 from 2/11
From Friday 2/12
Pork Carcass Cutout__88.38 -.49
IA-S.MN Wtd Avg Carcass Base__67.99
National Wtd Avg Carcass Base__65.38
February live cattle still holding a higher trend with nearby support levels at $115.50 and $114 and resistance at $118.40 then around $124. March feeders holding support around $137 with resistance around $145. April lean hogs now the front month and holding a sharply higher trend since mid-January, hitting a new contract high last Friday at $87.25, with support at $80 and resistance next up around $93, the spot high from the spring of 2019.
Grains finished the week mixed after some major back and forth movement from a bearish crop report to continued bullish exports. Volume was light to end the week as we enter a 3-day weekend with President’s day on Monday, China celebrates the lunar New Year and Brazil’s carnival begins. The old crop demand rationing continues for both corn and soybeans. Wheat continues to be a follower even though the freezing temps continued across the Plains with the coldest temps forecasted over the weekend.
For the week, Friday February 5th through Friday February 12th, March Corn -$.09 ¾, May -$.11, March Soybeans +$.05 ¼, May +$.05 ½, March KC Wheat -$.08 ½, May -$.07 ½, March Chicago Wheat -$.04 ½, May -$.04 ½, March MPLS Wheat -$.10, May -$.10 ½, March Soybean Meal -$3.30/T, May -$2.50/T.
Grains gapped higher last night on the open after the 3-day weekend but struggled to hold those gains and closed most of the gaps. Corn finished the overnight steady to 3 higher, soybeans 10 to 13 higher and wheat 5 to 11 higher.
NOPA crush report coming out later today with the forecast for January soybean crush at 183.09 MBU. This compares to last January’s 176.94 MBU. The USDA Outlook Forum begins later this week with the first take on spring acreage projections. Bloomberg released a survey about 2021-22 crops with the average trade estimate at 92.9 million acres of corn, 89.8 million acres for soybeans and 45.3 million for wheat.
Soybean harvest in Brazil estimated around 10% complete and behind last year’s pace at 20%. Weather forecasts extend the below normal moisture for Argentina and Southern Brazil. Much below normal temps continue in the U.S. this week with heavy precip in the Southeast and East Coast. The 6-10 day outlook showing normal to below normal temps across most of the country, above normal showing now in the northern and southern border states with above normal moisture in the PNW and Midwest and below normal in the Plains and Southwest.
March corn hitting contract high hit last week at $5.74 ¼ with support at $5.37 ½ then around $5.25. March soybeans contract high from mid-January at $14.36 ½ with support around $13.65 then $13.35. 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 around $420 and resistance at $443.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700