Date: February 17th, 2021
Livestock futures mixed yesterday and looking for direction, cattle futures did a decent job of defending last week’s rally. How many slaughter plants are down and for how long is the lingering question? Yesterday was the second day of rolling electrical outages in the 14 state Southwest Power Pool. Most salebarns have cancelled sales this week. A pork plant in Alberta is shutting down for an indefinite time due to continued COVID outbreaks. This carries good and bad news as this could help already bullish exports from the U.S. but also the market fears are still present here in the states of another wave shutting down plants.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 02/13/2021
RECEIPTS: Auctions Direct Video/Internet Total
THIS WEEK: 130,500 41,100 36,700 208,300
LAST WEEK: 225,100 34,200 10,900 270,200
YEAR AGO: 191,800 30,000 5,000 226,800
Compared to last week, steers and heifers sold steady to 4.00 lower. The best demand was shown in the Northern Plains on the larger sets of good doing big-boned yearlings that always show up at auctions this time of year.
Cattle slaughter from Monday estimated at 79,000 head and Tuesday 95,000 head, down 20,000 from last week and down 30,000 from last year. Hog slaughter from Monday estimated at 412,000 head and Tuesday at 419,000 head, down 75,000 compared to last week and down 72,000 compared to a year ago.
Boxed beef cutout values higher yesterday with only 78 loads sold.
Choice Cutout__234.77 +2.33
Select Cutout__222.03 +.62
CME Feeder Cattle Index__135.55 -.02
CME Lean Hog Index__75.15 +.61
Pork Carcass Cutout__89.71 -1.55
IA-S.MN Wtd Avg Carcass Base__69.71
National Wtd Avg Carcass Base__69.56 +2.47
February live cattle still holding a higher trend with the 20-day moving average providing nearby support now at $115.80 and resistance at $118.40. March feeders holding support around $137 last week and nearby support this week at $139 with resistance around $145. April lean hogs 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 held on for a double digit higher start to the week. KC wheat led the way as record breaking low temps stretched throughout the Plains. Export inspections for the week ending February 11th were not as impressive as last week and could be even worse next week with the river system frozen as far south as St Louis. Corn inspections totaled 52.1 MBU which was above expectations but below the average weekly need. Japan, Mexico and South Korea were the top three destinations with China absent this past week from the top 5. Year to date inspections equate to only 34.5% of the current USDA estimate and the average per week is now at 39 MBU with the average needed for the rest of this marketing year up at 59 MBU. Soybean inspections were below expectations at 29.7 MBU bringing year to date up to 82% of the current export estimate. China continues to be the #1 destination but also decreasing week by week as vessels continue to line up awaiting the Brazilian new crop. Wheat inspections totaled a disappointing 14.4 MBU with the average needed over the next 16 weeks at 21.6 MBU. Grain sorghum inspections total 2.8 MBU, all heading to China. Soybean demand still not being rationed as NOPA reported January 2021 domestic soybean crush at new January record and 2nd highest month ever at 184.65 MBU.
Grains fairly quiet overnight and pulling back some as energies continue to rally and hit new recent highs. Corn finished the overnight 2 to 5 lower, soybeans 1 to 4 lower and wheat 5 to 9 lower.
News also quiet overnight. We may continue to see controlled interruptions of electrical service over the next couple days according to the Southwest Power Pool forecasts last night. All weekly reports delayed this week with the EIA report on Thursday and weekly export sales Friday morning. No daily sales announced by USDA this morning. South Korea purchased 69,000 MT or 2.7 MBU of optional origin corn overnight, most likely to be sourced from the U.S.
Much below normal temps continue for the Southern Plains and Midwest through this weekend. The 6-10 day outlook showing normal to above normal temps across most of the country now and below normal only in the Northwest with above normal moisture across the northern border states and below normal from the West Coast to the Southeast.
March corn with nearby support at $5.39 ¼ then around $5.25 and resistance at $5.55 with the new contract high from last week at $5.74 ¼. 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 but a lower trend over this past month 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