Date: February 22nd, 2021
Cattle futures higher on Friday while lean hogs were lower and all mostly lower for the week. Cash feedlot trade remained mostly steady when compared to the week previous at $114 live and $180 on a dressed basis. Some light volume traded as high as $116 live and $182 dressed. Export sales and shipments for pork remain friendly as beef sales were friendly at 22,900 MT but actual shipments for the week ending February 11th were only average at 15,500 MT.
Cattle on feed as of February 1st at 12.1 million head and in line with expectations at 101% vs. a year ago. This is the second highest February 1 inventory. Placements in January bearish at 2.02 million head, 3% higher than a year ago with the average trade estimate even with a year ago. Marketings only 1.82 million head or 94% vs. a year ago, just below the average trade estimate. Actual daily marketings were 103.1% vs. a year ago with 2 less business days this January compared to January 2020.
For the week, Friday February 12th through Friday February 19th, February Live Cattle -$1.27, April -$1.50, March Feeder Cattle -$1.72, April -$2.05, April Lean Hogs -$.70, June +$.42, February Pork Cutout Futures +$.45. Boxed Beef, Choice +$6.86 @$239.23, Select Cutout +$6.97 @ $227.90, Pork Carcass Cutout +$3.11 @ $91.49.
Cattle slaughter from Friday estimated at 109,000 head and Saturday at 63,000 head bringing the weekly total to 552,000 head, down 56,000 from the week previous and down 74,000 from last year. Hog slaughter from Friday estimated at 488,000 and Saturday at 173,000 head bringing the weekly total to 2,438,000 head, down 216,000 compared to the week previous and down 173,000 compared to a year ago.
Boxed beef cutout values steady to higher last Friday with 90 loads sold.
Choice Cutout__239.23 +.38
Select Cutout__227.90 +.43
CME Feeder Cattle Index__138.11 +1.82
CME Lean Hog Index__77.43 +.23
Pork Carcass Cutout__91.49 +.68
National Wtd Avg Carcass Base__69.22 -.36
February live cattle still holding a higher trend with the 50-day moving average now the next support level at $114.60 and resistance at $118.40. Volume is getting thin though as the contract will expire this Friday. April live cattle still carrying a hefty premium to Feb and a steeper higher trend with a new contract high last week at $126.70 and support around $122. March feeders still very choppy these past few months with nearby support around $137 and resistance around $145. April lean hogs holding a sharply higher trend since mid-January, hitting a new contract high on the 12th at $87.25 with support at $80 and resistance next up around $93, the spot high from the spring of 2019.
Grains finished mixed on Friday but mostly higher for the week. U.S. winter wheat winter kill will take some time to see but overall is supportive to futures as record low temps were set across the Southern Plains last week. Weekly export sales were neutral to friendly along with the USDA outlook forum projections. The early look at anticipated acreage and supply and demand pointed towards ending stocks remaining nearly unchanged for corn and soybeans next year vs. this year even though planted acres are expected to be higher. Wheat acreage is also expected to be higher, winter wheat acreage higher for the first time since 2013/2014 yet a robust demand led to USDA projecting ending stocks for 2021/22 at 698 MBU compared to 836 MBU for 2020/21.
For the week, Friday February 12th through Friday February 19th, March Corn +$.04, May +$.05 ¼, March Soybeans +$.05 ¼, May +$.08 ¾, March KC Wheat +$.15, May +$.15 ¾, March Chicago Wheat +$.14, May +$.14 ¼, March MPLS Wheat +$.12 ¾, May +$.14, March Soybean Meal -$2.90/T, May -$3.40/T.
Grains firm overnight as new crop soybeans hit a new contract high. Corn finished the overnight 2 to 3 higher, soybeans steady to 4 higher and wheat 3 to 5 higher.
South American weather outlook features dryness in Argentina and southern Brazil while conditions remain soggy in the center to northern Brazil growing areas. Brazil soybean harvest continues but still lagging a year ago with the estimate country wide around 12% complete. In Mato Grosso, it’s estimated that soybean harvest is 35% complete compared to around 60% a year ago and second season corn planting is at 36% compared to 80% a year ago.
Mild weather for most areas of the U.S. as we wrap up February with heavy rains expected in the Southeast towards the end of the week. The 6-10 day outlook showing normal to above normal temps for the eastern half of the U.S. and below normal for the western half with above normal moisture covering the majority of South and eastern half of the U.S. and below normal in the Southwest and Florida.
March corn with the 20-day moving average holding nearby support at $5.44, resistance at $5.55 with the new contract high from the 9th at $5.74 ¼. March soybeans contract high from mid-January at $14.36 ½ with support around $13.70. 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