Date: October 13th, 2021
Livestock futures mixed again on Tuesday as cattle futures traded both sides of unchanged and lean hogs continue to drift lower. Light cash feedlot trade yesterday steady with last week in the WCB at $122 live and for the TX Cash Pool at $124.15. USDA updated supply and demand for the meats by increasing beef production estimates for both this year and next while decreasing both pork and poultry production estimates. The report confirming longer term bullish fundamentals for the cattle market as liquidation, increased domestic consumption projections and reduced pork and poultry production should eventually lead to higher sustained prices.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 10/12/2021
This Week: 2,171 Last Week: 1,770 Last Year: 5,196
Compared with last Tuesday: Steer calves under 700 lbs 2.00 to 3.00 higher, over 700 lbs steady. Heifer calves under 700 lbs steady to 1.00 higher, except for 500 to 600 lbs 2.00 to 3.00 higher, over 700 lbs mostly steady. Slaughter cows 3.00 to 5.00 lower, Slaughter bulls steady to 2.00 lower. Trade and demand moderate to good for calves, moderate for slaughter cows.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 10/12/2021
This Week: 1,819 Last Week: 2,130 Last Year: 1,617
Compared to last week, the majority of the cattle on hand were yearlings and sold steady to 6.00 higher. Calves were more lightly tested but sold steady to firm except for a few packages of 400-500 lb steers selling with a higher undertone. Demand was good for a moderate supply.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 10/12/2021
This Week: 1,967 Last Week: 2,272 Last Year: 2,802
Compared to last week, steer calves traded uneven from 3.00 lower to 3.00 higher while heifer calves traded steady to 2.00 lower in a light test of the market. Demand was moderate on a light supply.
Miles City Livestock Commission Auction – Miles City, MT
Livestock Weighted Average Report for 10/12/2021
This Week: 5,727 Last Week: 4,986 Last Year: 3,485
Compared to last week: Yearling steers and heifers were scarcely tested this week thus no trend is available. Limited yearlings sold on moderate to good demand. Steer calves sold unevenly steady from 5.00 lower to 5.00 higher. Heifer calves under 450 lbs sold mostly 5.00- 10.00 lower, heifers over 450 sold steady to 5.00 higher.
Philip Livestock Auction – Philip, SD
Livestock Weighted Average Report for 10/12/2021
This Week: 8,227 Last Week: Last Year: 7,138
Compared to last week Feeder Steers under 400 8.00 to 10.00 higher, 400 to 500 5.00 to 7.00 higher, 500 to 600 Steady, 600 to 650 3.00 higher, over 650 not well compared, Feeder Heifers under 400 8.00 higher, 400 to 450 Steady, 450 to 500 4.00 higher, 500 to 550 Steady, 550 to 600 Steady to 2.00 lower, 600 to 650 Steady, over 650 not well compared.
Cattle slaughter from Tuesday estimated at 120,000 head, down 2,000 from last week and from last year. Hog slaughter from Tuesday estimated at 477,000 head, up 1,000 compared to a week ago but down 16,000 compared to a year ago.
Boxed beef cutout values steady on Choice but lower on Select on Tuesday with strong demand and 177 loads sold.
Choice Cutout__281.07 -.05
Select Cutout__261.35 -2.29
CME Feeder Cattle Index__154.15 +.53
CME Lean Hog Index__90.94 -.66
Pork Carcass Cutout__102.38 -5.63
National Wtd Avg Carcass Base__69.11 +.49
October live cattle rebounding since the new lows from the first of October to test nearby resistance around $126 but unable to push through this week with support at $123. October feeders also rebounding and finding resistance just above $160 with support at $156.50. October lean hogs still choppy with support around $88 and resistance at $92.50 as deferred contracts work lower to fill the gaps from September 27th.
The grain markets were fairly quiet ahead of the USDA update on supply and demand. Weekly export inspections came out first which by far are the best of this marketing year and almost back to what I call normal for this time of year. Soybean inspections at 59.2 MBU compared to the average weekly need at 41.8 MBU. Wheat shipments also above average at 16.0 MBU. Corn and milo shipments though still weak at 29.4 MBU and 448,719 BU respectively. China the overall #1 destination taking a cargo each of corn and wheat and nearly 43 MBU of soybeans.
The crop report following though was bearish for corn and soybeans as USDA increased production estimates and ending stocks more than expected. U.S. soybeans now estimated to be a record crop at 4.448 BBU with yield increased 0.9 BPA to 51.5. Ending stocks up to 320 MBU compared to 185 MBU. U.S. corn production estimated now at the second largest crop in history at 15.019 BBU with yield at 176.5 BPA. Ending stocks for corn projected to be 1.5 BBU compared to 1.408 BBU last month. These were all still within the range of estimates and half of the stocks increase was not a surprise as old crop stocks were raised a couple weeks ago in the Quarterly Stocks report. I think the market is more concerned with can these still get bigger and will demand pick up the additional supply especially China. Wheat numbers were friendly though as both U.S. stocks and world stocks were decreased which allowed both KC and Chicago markets to reverse higher for the day and MPLS wheat contracts to continue to make new daily highs.
After the close, USDA updated crop progress with fall harvest in line with expectations. Corn harvest is now 41% complete as of this past Sunday which compares to 39% last year and 31% 5-year average. Soybean harvest is 49% complete compared to 58% last year and 40% average while grain sorghum harvest is also 49% complete compared to 47% last year and 42% average. Winter wheat planted in line with the average at 60% but emergence still behind at 31%.
Overnight, grains were mixed with soybeans gaining back some of yesterday’s losses while wheat and corn traded both sides of unchanged but finished lower. Palm oil into new record highs overnight as crude oil is lower. Corn finished 2 lower, soybeans 5 to 6 higher and wheat steady to 6 lower.
China reported September soybean imports at 6.88 MMT vs. 9.79 MMT last year, down 30% and the lowest import volume for September since 2014. Finally some more sales though with 330,000 MT or 12.1 MBU of soybeans to China, 198,000 MT or 7.3 MBU of soybeans for unknown destinations and 161,544 MT or 6.4 MBU of corn for unknown destinations.
Scattered rains continue this week in the Southern Plains, Dakotas and the Midwest but weather opens back up for fall harvest by the week’s end. The 6-10 day outlook showing normal to above normal temps across the entire country now with below normal moisture for all expect on the West Coast, Florida and a small pocket in the Southwest.
December corn still holding the long term lower trend with nearby support taken out yesterday the next down at $5.12 then right around the $5 level and resistance at $5.48. November soybeans also holding the lower trend with new 6-month lows again yesterday and breaking the $12 level with support next at $11.85 and resistance around $12.40. December KC wheat holding a higher trend since early July with the contract high at $7.69 on August 13th and support at $7.26. December Chicago wheat also a higher trend with the contract high at $7.86 ½, but resistance first at $7.63 and support at $7.26. December MPLS wheat a new contract high yesterday at $9.60 with nearby support at $9.20. December Soybean Meal another new low overnight at $310.7 with resistance around $325.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
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