Date: December 8th, 2021
Another mixed day across the Ag sector yesterday as news remains fairly light ahead of Thursday’s USDA supply and demand report. Cattle futures held gains throughout the day but finished a bit softer for the day as lean hogs remained under pressure. The nearby contract actually finished a tick in the green but broke through nearby support levels and into new recent lows earlier in the trading session. Negotiated cash fed cattle trade so far this week limited to the North on light volume at mostly $140 live which is steady with a week ago.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 12/7/2021
This Week: 7,553 Last Week: 3,375 Last Year: 9,099
Compared with last Tuesday: Feeder steers and heifer under 500 lbs weaned 50 days or longer with quality and condition 5.00 to 8.00 higher instances 10.00 higher on steers. Steers 500 to 700 lbs 3.00 to 5.00 higher over 700 lbs steady to 3.00 higher with instances 8.00 higher. Heifers 500 to 700 lbs steady to 2.00 higher, over 700 lbs 2.00 to 3.00 higher.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 12/7/2021
This Week: 3,928 Last Week: 3,390 Last Year: 3,353
Compared to last week, steer calves under 600 lbs. traded 3.00-6.00 higher while heavier weights traded steady to 3.00 higher. Heifer calves traded steady to 4.00 higher. Demand was very good on a moderate to heavy supply. With several weeks of sub-freezing mornings past us, there has been an increased demand for light weight calves with 3 and 4 weight steers in the 2.00+ range and 2.00 knocking on the 5 weight’s door. Yearlings are in high demand with those that can be found bringing per cwt. prices similar to 6 weight calves.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 12/7/2021
This Week: 3,476 Last Week: 3,051 Last Year:
Compared to last week steers and heifers sold steady to 6.00 higher with most of the gain on those under 600 lbs. A few drafts of heifer calves under 450 lbs sold sharply higher. Demand was good for a heavy supply that featured mainly calves with a few yearlings in the offering.
Philip Livestock Auction – Philip, SD
Livestock Weighted Average Report for 12/7/2021
This Week: 3,167 Last Week: 1,893 Last Year:
Compared to last week Feeder Steers 400 to 450 8.00 to 10.00 higher, 450 to 500 Steady, 500 to 550 8.00 higher, 550 to 600 Steady, 600 to 650 10.00 higher, 650 to 700 Steady to 3.00 higher, Feeder Heifers under 400 Steady, 400 to 500 3.00 to 5.00 higher, 500 to 600 6.00 to 8.00 higher.
Miles City Livestock Commission Auction – Miles City, MT
Livestock Weighted Average Report for 12/7/2021
This Week: 1,757 Last Week: 3,790 Last Year: 5,345
Compared to last week: Yearling steers and heifers were too lightly tested to develop any market trend. Demand for yearlings was moderate to good for light offerings. Feeder steers under 500 lbs sold steady to 5.00 higher in a narrow comparison. Steers over 500 lbs sold mostly 5.00 higher. Feeder heifers under 500 lbs sold mostly steady to 5.00 higher, heifers over 500 lbs sold generally steady. Quality this week was average to attractive.
Cattle slaughter from Tuesday estimated at 123,000 head, up 1,000 from last week and up 7,000 from last year. Hog slaughter from Tuesday estimated at 470,000 head, down 10,000 compared to a week ago and down 23,000 compared to a year ago.
Boxed beef cutout values on Tuesday sharply lower on strong demand with 159 loads sold.
Choice Cutout__268.03 -4.50
Select Cutout__255.68 -2.17
CME Feeder Cattle Index__160.96 +.53
CME Lean Hog Index__70.94 +.16
Pork Carcass Cutout __81.09 -2.62
National Wtd Avg Carcass Base __61.92 +1.41
December live cattle hit a new contract high last week at $139.12 with support holding around $136. Delivery began this week with cash still at a $2 premium. January feeders holding a lower trend since hitting new recent highs just above $168 two weeks ago with support at $162.50. December lean hogs also trending lower with a new 10-month low yesterday at $71.25. Support next down at $70 and resistance at $78. The contract expires next Tuesday as volume is already thin. The February contract has been chopping in a $14 range since June with nearby support at $74 and resistance at $81.
Grains back and forth throughout the trading session as soybeans the leader lower and wheat the leader higher. Rumors swirled during trading hours that EPA would be releasing updated biofuel mandates, sharply cutting back last year and this year’s ethanol mandate but back up to pre-COVID levels for 2022 at 15 billion gallons. Soybeans actually started higher for the day as continued daily export sales are announced to primarily China or for unknown destinations, which has we have come to know has mostly destined for China as well.
Grains were weaker overnight, again led lower by soybeans. Equites and energies steady to firm following a few days of recovery. Corn finished the overnight 2 lower, soybeans 6 to 9 lower, and wheat 1 to 6 lower.
South Korea purchased 50,000 MT or 1.8 MBU of milling wheat from both Australia and the U.S. USDA announced a massive 1.844 MMT or 72.6 MBU of corn sale to Mexico this morning. 42.9 MBU for delivery this marketing year and the remaining 29.7 MBU for next year. Another soybean sale was announced as well making it 5 days in row for daily soybean export sales. Today’s is 130,000 MT or 4.8 MBU of soybeans sold for delivery to China.
I don’t look for much in the way of earth-shattering news from USDA tomorrow. USDA will update domestic and world supply and demand at 11 am. U.S. production numbers typically are left alone as USDA does not send out producer surveys for the December monthly crop report. The demand side of balance sheet could see minor reductions to exports and increased demand estimates for domestic corn and soy use.
The average trade estimates for ending stocks are as follows…
U.S. Corn 2021/22 Ending Stocks 1.487 BBU vs. 1.493 BBU in November
U.S. Soybean 2021/22 Ending Stocks 352 MBU vs. 340 MBU in November
U.S. Wheat 2021/22 Ending Stocks 589 MBU vs. 583 MBU in November
Slight reductions are expected this month for both corn and soybean production in Argentina along with a slight reduction in Brazil soybean production.
The average trade estimates for world ending stocks are as follows…
World Corn 2021/22 Ending Stocks 304.47 MMT vs. 304.42 MMT in November
World Soybean 2021/22 Ending Stocks 104.13 MMT vs. 103.78 MMT in November
World Wheat 2021/22 Ending Stocks 276.3 MMT vs. 275.8 MMT in November
Dry conditions continue for most with a chance of heavy snow in the forecast for the Northern Corn Belt heading into the weekend and heavy rain for the Southeast. The U.S. 6-10 day outlook still showing normal to well above normal temps across the country, below normal temps now for the West Coast, with above normal moisture for the western third and a pocket now for the Corn Belt but below normal remaining in place across the Southern Plains and the East Coast.
March corn still trending higher to sideways with nearby support around $5.60 and resistance at last week’s new 3-month high at $5.96 ¾. January soybeans very choppy this past month with support at $12.14 and resistance up around $12.80. March KC wheat well off the contract high from November at $8.92 ¼, yet still holding the long-term higher trend with support at $8.00 and resistance at $8.48. March Chicago wheat has nearby support at $7.82 with resistance at $8.24. March MPLS wheat chopping sideways from $10 to $10.65 over this past month. January Soybean Meal holding a higher trend since mid-October with support around $340 and resistance at $360 then $375.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700