Date: February 7th, 2022
Livestock futures finished mixed last week but solid gains week over week. Cash fed cattle trade $3 to $4 higher in TX and KS at $139 to $140 live. Trade in the North $3 to $6 higher at $138 to $140 live and mostly $222 dressed. Slaughter rates started the week on what could be termed near capacity pace. The winter storms that rolled through the middle of the country midweek though were said to have delayed nearby delivers and caused chainspeeds to slow ending another week with totals less than a year ago. Beef prices pulled back lower this past week as pork prices continued higher.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 1/30/2022 – 2/5/2022
Current Week: 23,659 Last Report 1/24/22: 36,646 Last Year: 34,616
Compared to last week: Feeder steers unevenly steady. Steer calves sold 5.00-10.00 lower. Feeder heifers and heifer calves steady to 2.00 higher. Demand moderate to good. Numbers somewhat lighter this week as mid-week winter storm had some auctions canceling or moving sales up in order to miss the ice and snow. Ice and snow did come as expected and was a welcome site as much of the state in desperate need of moisture.
For the week, Friday January 28th through Friday February 4th, February Live Cattle +$3.35, April +$3.77, March Feeder Cattle +$6.47, April +$6.12, February Lean Hogs -$.90, April +$5.15. Boxed Beef, Choice -$10.61 @ $279.81, Select -$7.36 @ $276.05, Pork Carcass Cutout +$1.02 @ $97.41.
Cattle slaughter from Friday estimated at 114,000 head and Saturday only 46,000 head. For the week, 639,000 head, down 4,000 from the week previous and down 13,000 from last year. Beef production estimated at 537 million pounds bringing year to date to -6.1% vs. last year and year to date slaughter -5.5%.
Hog slaughter from Friday estimated at 430,000 head and Saturday at 203,000 head. For the week, 2,436,000 head, down 90,000 compared to the week previous and down 237,000 compared to a year ago. Pork production last week estimated at 534.2 million pounds bringing year to date to -13.7% compared to a year ago and slaughter -11.1%.
Boxed beef cutout values on Friday lower on light demand with 87 loads sold.
Choice Cutout__279.81 -1.65
Select Cutout__276.05 -.42
CME Feeder Cattle Index__160.17 +.92
CME Lean Hog Index__84.30 +.97
Pork Carcass Cutout __97.41 +.20
National Wtd Avg Carcass Base__ 83.87 -3.62
February live cattle sharply higher since testing support at $135.50 back on January 24th and hitting a new contract high on Friday at $142.07. Looking at a continuous weekly chart, this is the highest nearby price since November 2015 with the next upside target around $150. March feeders also rebounding from recent lows but hitting resistance last week at $168 with the next up around $170.80 and the contract high at $171.57. All contracts May forward continue to make new contract highs. February lean hogs sharply higher over the past month but set to expire next Monday with resistance at $89.50 and support at $84.20. April forward continue to make new contract highs after breaking out of the range bound trading seen most of last year.
Grains finished the week higher although all soybean and meal contracts along with the new crop December corn contract were the only to have week over week gains. Wheat still holding a lower trend. The nearby March corn contract hit a new contract high to start the week but sold off and unable to test that level since. Hot and dry conditions back in the forecast for southern Brazil and Argentina’s grain areas. The Buenos Aires Grain Exchange called the Argentine soybean crop 42 MMT, down from their earlier estimate of 44 MMT. USDA will update domestic demand and world balance sheets this Wednesday. The average pre report trade estimates looking for another 2 to 3 MMT reduction in both Brazil’s and Argentina’s corn and soybean production estimates.
The CFTC Commitment of Traders report showed managed money or funds for the trade week ending 2/1 aggressively bought the soy complex. They added 6.9k contracts corn (net long 372.5k), sold 13k contracts Chicago Wheat (net short -26.4k), sold 2.8k KC Wheat (net long 37.7k), added 39.5k soybeans (net long 154.4k) and added 12.4k meal (net long 76.7k).
For the week, Friday January 28th through Friday February 4th, March Corn -$.15 ½, December +$.04 ¼, March Soybeans +$.83 ½, November +$.44 ¼, March KC Wheat -$.16 ½, July -$.13 ¾, March Chicago Wheat -$.23, July -$.20 ¼, March MPLS Wheat -$.07 ¼, September -$.10 ¾, March Soybean Meal +$32.70/T, May +$31.80/T.
Grains higher overnight, again led by the soy complex with soybeans and meal again into new contract highs and finishing 19 to 23 higher for soybeans and $6 to $7/T higher for meal. Corn finished the overnight 5 to 10 higher and wheat 7 to 11 higher. Equities mixed this morning, US$ lower overnight but higher this morning and crude lower this morning. China’s markets sharply higher last night after being closed last week for the Lunar New Year holiday. USDA reported a private sale of 507,000 MT or 18.6 MBU of soybeans sold for unknown destinations split between this marketing year and new crop.
Mild and dry weather expected across the U.S. this week. The 6-10 day outlook showing above normal temps for the western half of the country and below normal for the eastern half with normal to below normal precip for all. Scattered showers over the weekend in South American, very beneficial rains in Paraguay but forecasts return to hot and dry conditions for the already stressed southern Brazil and Argentina’s grain areas. Central Brazil expected to be wet which will delaying soybean harvest.
March corn contract high was last Monday at $6.42 ½ with support $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 gapped higher and hit a new contract high overnight at $5.81. March soybeans gapping into a new contract high overnight as well at $15.84 ½ with support at $15.26 then the $15 level. 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 gapping higher and hitting a new contract high overnight at $14.21 ¼. March KC wheat still holding a lower trend the past 2+ months with the long term higher trend tested last week at $7.53 and resistance around $8.40. March Chicago wheat holding a lower channel trading pattern with support at $7.35 and resistance around $8.20. March MPLS wheat with support at $8.95 and resistance at $9.65. March Soybean Meal gapping higher overnight and new contract high at $452.50 with support around $430. $456 is the next upside target, the nearby spike high from last May.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700