Date: January 31st, 2022
All livestock futures finishing the week in positive territory which helped push week over week gains for both live cattle and lean hogs. Cash fed cattle trade steady to $1 lower last week in TX and KS at $136 to $137 live. Trade in the North steady to $1 higher at $137 to $139 live and mostly $218 dressed. Chainspeeds are still gaining vs. the past few weeks but still lagging vs. a year ago for both cattle and hogs. Looking down the road there is still plenty of evidence that fed cattle supplies will get tight so long as processing can keep up the pace.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 1/23/2022 – 1/29/2022
Current Week: 36,646 Last Report 1/17/22: 38,458 Last Year: 26,528
Compared to last week: Feeder steers 2.00-5.00 lower. Feeder heifers 2.00-3.00 lower. Demand moderate for feeder cattle. Steer calves steady to 2.00 lower. Heifer calves sold steady to 4.00 higher. Demand moderate to good for calves. Much of Oklahoma remains in some level of drought with Western Oklahoma and the Panhandle seeing the worst. Snow moved across the state this week, however not really enough to put a dent in that drought.
For the week, Friday January 21st through Friday January 28th, February Live Cattle +$.77, April +$1.00, January Feeder Cattle -$1.35, March -$3.67, February Lean Hogs +$1.72, April -$.02. Boxed Beef, Choice -$1.99 @ $290.42, Select +$1.08 @ $283.41, Pork Carcass Cutout +$3.10 @ $96.39.
Cattle slaughter from Friday estimated at 117,000 head and Saturday at 57,000 head. For the week, 643,000 head, up 7,000 from the week previous but down 13,000 from last year. Beef production estimated at 540.8 million pounds bringing year to date to -7.1% vs. last year and year to date slaughter -6.4%.
Hog slaughter from Friday estimated at 468,000 head and Saturday at 209,000 head. For the week, 2,546,000 head, up 106,000 compared to the week previous but down 114,000 compared to a year ago. Pork production last week estimated at 556.9 million pounds bringing year to date to -12.2% compared to a year ago and slaughter -11.4%.
Boxed beef cutout values on Friday higher on light demand with 77 loads sold.
Choice Cutout__290.42 +1.31
Select Cutout__283.41 +4.31
CME Feeder Cattle Index__158.66 -.39
CME Lean Hog Index__80.61 +.86
Pork Carcass Cutout __96.39 -1.80, butt +11.70, ham -15.13
National Wtd Avg Carcass Base__ 75.11 +1.29
February live cattle bouncing in a $6+ range since early November with support at $135.50, nearby resistance at $139.15 then the contract high from November 29th at $141.85. March feeders gapped lower last week, tested support just above $158 with resistance at $162.30. February lean hogs hitting a new recent high on Friday at $88.70 with the contract high from June 10th up at $90.97 and support around $85.
New recent highs for corn and new contract highs for soybeans to end the week. All grains actually finished higher last week and all expect MPLS wheat higher week over week. Funds were net buyers of more than 51K contracts of corn for the week ending January 25th according to the weekly CFTC report. This was more than expected and look to be net long 290K contracts heading into the weekend. The Commitment of Traders Report also showed funds buying over 15K contracts of soybeans, net long over 114K contracts, buying 4.5K contracts of KC Wheat, net long 40.6K contracts and buying 11.4K contract of Chicago wheat but still net short 13.4K contracts.
Egypt purchased a total of 420,000 MT or 15.4 MBU of wheat on Friday from Ukraine, Romania and Russia. Wheat futures were very volatile last week as strength in the fall crops helped stabilize. The US$ continues to rally, near its highest levels in almost 18 months which doesn’t help the slow U.S. exports. News headlines pertaining to the Russia/Ukraine conflict seemed to quiet some towards the end of the week.
Excess rain in northern Brazil where farmers are trying to harvest soybeans and plant second crop corn. Argentina looks to have a drier week. USDA attaché report late Friday dropped Argentina’s corn crop another 3 MMT but also raised the wheat production estimate by 1.3 MMT.
For the week, Friday January 21st through Friday January 28th, March Corn +$.19 ¾, December +$.04 ¼, March Soybeans +$.55 ¾, November +$.35 ¼, March KC Wheat +$.09, July +$.06, March Chicago Wheat +$.06 ¼, July +$.07 ¾, March MPLS Wheat -$.15 ¾, September -$.04 ¾, March Soybean Meal +$18.50/T, May +$17.90/T.
Grains continued to rally overnight with both the nearby corn and soybean contracts hitting new contract highs. World vegetable oil demand strengthen again with Malaysian Palm Oil into new all-time highs. Corn finished the overnight 2 to 6 higher, soybeans 13 to 17 higher and wheat 1 to 3 higher. Equities mixed this morning with crude higher and the US$ lower.
USDA reported a private sale of 129,000 MT or 4.7 MBU of soybeans sold to China split between this marketing year and new crop.
Artic air dips into the Plains midweek bringing a chance of heavy snow to heavy rain from Eastern KS up into the Great Lakes and into the Southeast. The 6-10 day outlook showing above normal temps in the Northern Plains and below normal for the South and eastern half of the U.S. with below normal moisture through the country except in TX. The recent rains for Argentina have been very beneficial yet the forecasts pointing now to a return of hot and dry.
March corn a new contract high overnight at $6.42 ½ with support at $6.20 then $6.10. These are the highest nearby prices since last summer when we hit $7.50 in July and up to $7.75 in May. December 2022 corn also hit a new contract high at $5.77 overnight. March soybeans also a new contract high overnight at $14.96 ¾, with support at $14.25 then $14.05. This is the highest nearby price since last June when the nearby contract got up to $16.23 ½ and $16.77 ¼ last May. November 2022 soybeans also hit a new contract high overnight at $13.69 ¼. March KC wheat still holding a lower trend the past 2 months with nearby support at $7.90 and resistance at $8.50. March Chicago wheat actually took out the lower trend last week with support at $7.74 and resistance at $8.31 ½. March MPLS wheat with support around $9.00 and resistance at $9.65. March Soybean Meal with support around $388 and resistance at $420.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700