Date: November 29th, 2021
Livestock futures finished mixed last Friday as cattle futures continued higher but lean hogs reversed lower wiping out all the gains made during the week. Negotiated cash feedlot trade jumped sharply higher this past week, $5 to $9 higher than the week previous, with live trade in TX and KS up to $140 and dressed trade in NE up to $220. Weekly export sales for both beef and pork were friendly this past week. Net beef sales were 19,300 MT with an additional 5,800 MT for next year. Actual exports totaled 18,200 MT. Net pork sales for this year and next combined were 33,100 MT and exports were 28,900 MT.
For the week, Friday November 19th through Friday November 26th, December Live Cattle +$4.57, February +$3.50, January Feeder Cattle +$6.22, March +$4.60, December Lean Hogs -$.55, February -$1.45. Boxed Beef, Choice +$1.60 @ $280.01, Select -$1.55 @ $262.28, Pork Carcass Cutout -$5.84 @ $83.98.
Cattle slaughter from Friday estimated at 119,000 head and Saturday at 81,000. For the holiday shortened week, 566,000 head, down 111,000 from the week previous but up 2,000 from last year. Beef production last week estimated at 470.5 million pounds compared to 562 million the week previous and 475.5 million last year. Year to date beef production is +2.5% compared to last year with slaughter +2.9%.
Hog slaughter from Friday estimated at 470,000 head and Saturday at 363,000. For the week, 2,261,000 head, down 368,000 compared to the week previous and down 79,000 compared to a year ago. Pork production last week estimated at 487.9 million pounds compared to 565.4 million the week previous and 511.3 million last year. Year to date pork production is -2.3% compared to a year ago with slaughter -2.1%.
Boxed beef cutout values on Friday higher on Choice but lower on Select on very low demand with 50 loads sold.
Choice Cutout__280.01 +.90
Select Cutout__262.28 -1.19
CME Feeder Cattle Index__157.83 +.40
CME Lean Hog Index__69.71 -2.85
Pork Carcass Cutout__83.98 -1.00
National Wtd Avg Carcass Base__55.13 -.53
December live cattle hitting a new contract high this morning at $139.10, a gap on the charts from $136 to $135.57 and support at $134. January feeders into a new 2-month high just above $168 with resistance next around $170, the contract high at $172 and support at $162. December lean hogs reversing lower on Friday yet still stuck in the choppy, range bound trading pattern with support at $71.70 and resistance at $79.50.
Grains were very volatile to end the week as wheat futures still remain the leader higher. Quality milling wheat is very short and in high demand which continues to support the wheat rally. The uncertainty around the new COVID variant first identified in South Africa was the cause for the initial market panic on Friday. What we know so far is this variant has multiple mutations and has already led to lockdowns throughout the world. Equities and energies were sharply lower spilling over pressure to the grains with gap lower moves on the open and only corn and MPLS wheat recovering to finish in the green for the day. Weekly export sales were again friendly for both corn and soybeans. Corn a new marketing year high at 56.3 MBU and soybeans totaled 57.5 MBU.
For the week, Friday November 19th through Friday November 26th, December Corn +$.16, March +$.14 ¾, January Soybeans -$.10 ½, March -$.12, December KC Wheat +$.30 ¼, March +$.30 ½, December Chicago Wheat +$.02 ½, March +$.06, December MPLS Wheat +$.29 ¼, March +$.34, December Soybean Meal -$15.60/T, March -$15.00/T
Grains mixed but mostly higher overnight. Corn finished 1 to 3 lower but crude $3 higher after the $10 collapse on Friday. Soybeans finished the overnight 5 to 9 higher and wheat 3 to 10 higher. Chinese demand and South American weather should be the major fundamental drivers ahead of the December USDA crop reports, but markets around the world will almost certainly see more knee-jerk reactions to developments surrounding the new COVID variant.
Egypt tendering for wheat again with Romania the cheapest offer. World wheat values continue to rally with Russian milling quality up another $6/MT or $.16/BU this past week. No daily sales announced by USDA this morning.
Mild and dry weather expected across the U.S. this week. The 6-10 day outlook showing normal to above normal temps across the entire country except in New England with above normal moisture across the Northern Border States and below normal from the Southwest into the WCB. Recent moisture in both Brazil and Argentina but spotty to limited rain chances in the forecast. It is estimated only 15% of the crop area in Southern Brazil currently under stress.
December corn holding the higher trend and up to a new recent high last week at $5.89 with the next upside target at $5.94 ¼, the spike high from mid-August, support at $5.66. January soybeans breaking the long term lower trend this month but choppy since with resistance at $12.89 and support at $12.40. December KC wheat a new contract high last week at $8.87 ¼ with support at $8.50 then $8.15. December Chicago wheat also a new contract high last week at $8.63 ¼ with support at $8.10. December MPLS wheat contract high back on November 2nd at $10.86 ½ with support at $10.00. December Soybean Meal still holding a higher trend since mid-October with support at $340 and resistance at $382.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700