Date: January 5th, 2022
Mixed day for the Ag futures yesterday with grains sharply higher, cattle sharply lower and lean hogs lower on the nearby contract but all deferred contracts higher for the day. Fats and feeders gapped lower at the open and bottomed out late morning nearly $2 lower for live cattle and over $4 lower for feeders. Very light cash fed cattle so far this week from $138 to $140 live, steady with a week ago. I wouldn’t expect to see much volume until later this week as packers will look to lower bids, especially with futures lower. Good news though that beef prices continue to creep higher and packers are needing inventory in the near term as we get back up to full capacity post the holidays. So far this week though slaughter numbers are lighter than expected.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 1/3/2022
This Week: 8,593 Last Report 12/13: 14,695 Last Year: 12,154
Compared to the last sale 12/13/21: Feeder steers and heifers steady to 3.00 lower. Demand moderate for feeder cattle. Steer calves 3.00- 6.00 higher. Heifer calves steady to 4.00 higher. Demand moderate to good for calves.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 1/3/2022
This Week: 2,609 Last Report 12/13: 4,502 Last Year: 2,821
Compared to two weeks ago: Steers and Heifers both 5.00-8.00 higher. Value Added steers 3.00-4.00 higher while Value Added Heifers traded 6.00-8.00 higher.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 1/3/2022
This Week: 11,331 Last Report 12/20: 5,146 Last Year: 11,730
This regular feeder sale also included a yearling special. Compared to the last sale, (December 20th), feeder steers traded 3.00-6.00 higher, except with heavy five weight steers trading up to 12.00 higher. Feeder heifers traded 2.00-5.00 higher with the most gain on weights over 725 lbs. Supply was heavy with very good demand.
Sioux Falls Regional Cattle Auction – Worthing, SD
Livestock Weighted Average Report for 1/3/2022
This Week: 4,965 Last Report 12/20: 2,647 Last Year: 3,820
Compared to two weeks ago: Feeder steers under 550 lbs sold with lower under tones, 550 lbs and over 2.00 to 5.00 higher. Feeder heifers 550 lbs and under sold with higher undertones, 600 -650 lbs steady to 3.00 lower, 650 lbs to 750 lbs 7.00 to 8.00 higher, not a meaningful comparison in the 8 weights, 900 lbs to 950 lbs 2.00 to 3.00 lower.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 1/4/2022
This Week: 3,287 Last Report 12/21: 1,566 Last Year: 4,212
Compared with a couple of weeks ago Tues 12/14/2021: Steer’s under 550 lbs 3.00 to 5.00 higher except for 400 to 450 lbs steady, 550 to 700 lbs steady to 3.00 lower decline on 550 to 600 lbs, over 700 lbs steady to 2.00 lower. Heifer’s under 500 lbs 5.00 to 8.00 higher, 500 to 700 lbs 2.00 to 3.00 lower, over 700 lbs steady to 1.00 lower.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 1/4/2022
This Week: 4,548 Last Report 12/21: 1,290 Last Year: 6,807
Compared to the last well tested market of three weeks ago, steer calves traded 6.00-9.00 higher with spots 15.00 higher. Heifer calves traded 4.00-8.00 higher.
Cattle slaughter from Tuesday estimated at 117,000 head, down 5,000 from last week and down 1,000 from last year. Monday’s slaughter dropped 5,000 head to 107,000. Hog slaughter from Tuesday estimated at 472,000 head, down 8,000 compared to a week ago and down 16,000 compared to a year ago. Hog slaughter also revised lower, down 13,000 to 458,000 head.
Boxed beef cutout values on Tuesday higher on moderate demand with 160 loads sold.
Choice Cutout__266.82 +.79
Select Cutout__259.23 +.33
CME Feeder Cattle Index__162.35 -3.00
CME Lean Hog Index__72.75 +.90
Pork Carcass Cutout __85.47 -.55
National Wtd Avg Carcass Base__ 63.09 +1.37
February live cattle, again gapping lower on the open yesterday, taking out nearby support with the next the December low down at $135.50. Resistance up at $141.42 then the contract high hit on November 29th at $141.85. January feeders stuck in roughly a $10 range since mid-November with resistance at $167.50 then $168.30 and support down at the December low at $158.40. February lean hogs chopping in a $14 range since June with nearby support around $80 and resistance at December’s high at $84.65.
Grains again led higher by soybeans, yet yesterday they were able to pull corn and wheat with them. November soybean crush was actually bearish after the close on Monday, but South American weather getting the most attention right now. Recent rains have been spotty but the extended forecasts back to below normal moisture in southern Brazil and Argentina. Honestly the past week was led by selling to the end year and fresh money flow in to begin this year. Funds estimated net buyers of 20K to 30K corn contracts, 20K beans, 5K to 6K wheat. March corn as of the close still 8 cents shy of the December 28th recent highs and all 3 wheat markets still holding lower trends. Soybeans will remain the nearby leader with new 6-month highs and March closing in fast on the $14 resistance level. Monday afternoon states updated monthly crop conditions confirming winter wheat ratings lower throughout the Southern Plains. Honestly I feel the markets had already factored this in a month ago.
Grains weaker overnight led lower by wheat. Wheat finished the overnight 8 to 11 lower with corn 1 to 2 lower and soybeans 2 to 4 lower. Outside markets mixed with equities steady to lower, US$ lower and energies higher. USDA announced a private sale of 132,000 MT or 4.85 MBU of new crop soybeans for delivery to unknown destinations.
The markets will continue to watch the weather in South America and then the USDA final crop production report on January 12th. Private estimates starting to come in with Brazil’s soy production seen as low as 138 to 134 MMT now compared to 143 to 144 last month. Argentina’s corn and soy crop production estimates both seen at 2 to 5 MMT lower than a month ago. USDA will update domestic crop production estimates as well, theoretically the final estimate along with any demand adjustments. It would not surprise me to see another cut to wheat exports as both sales and shipments are well behind the pace needed. Soybean sales are also a bit light, but there’s still the thoughts that Chinese demand needs to pickup to meet current demand needs. Brazil offers for this spring currently 50 cents discount to U.S. values.
Much below normal temps continue this week for the Northern Plains and dropping into the Corn Belt to end the week. Wintry mix still in the forecast for the PNW which could delay export loadings. The 6-10 day outlook showing normal to above normal temps for the majority of western half of the U.S. with below normal in the Northeast and normal to below normal precipitation for all except the Southwest.
March corn still trending higher and able to get above the July 1st spike high last week before reversing lower with support at $5.92 and $5.80. The next upside target is the June 10th high on $6.33 then the contract high from May 7th at $6.40 ½. March soybeans a new recent high overnight at $13.97 ¼ with support at $13.35. This is the highest price since mid-July with resistance next up at $13.99. March KC wheat choppy the past couple months with resistance at $8.71 then the contract high from November 24th at $8.92 ¼ and support at $7.81. March Chicago wheat resistance around $8.20, the contract high up at $8.74 ¾ and support at $7.51. March MPLS wheat breaking the sideways pattern that had held since late October with a new recent low at $9.55 ¾ overnight. Support next around $9.51 and resistance at around $10.10. March Soybean Meal a new contract high overnight at $416.50 with support at $398.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
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