Date: February 16th, 2022
All livestock futures rallying yesterday with higher equites and sharply lower grains. Feeders and hogs held triple digit gains throughout the day as fats were modestly higher. Very light volume cash fed cattle trade on Tuesday in the North at $142 live, the top end of last week’s range. Bids at $223 dressed did not attract any business along with bids in the South at $140 live. Asking prices so far in the South of course are starting $1 to $3 higher than a week ago. I didn’t expect to see any cash trade until midweek and live cattle futures looking for more support from higher cash to retest last week’s highs. Beef prices lower the past few weeks, we’ll see if packers want to get aggressive again this week. Support also coming this week from another round of winter weather starting today.
Sioux Falls Regional Cattle Auction – Worthing, SD
Livestock Weighted Average Report for 2/14/2022
This Week: 4,628 Last Week: 5,074 Last Year: 1,090
Compared to last week: Feeder steers mixed 350 lbs – 400 lbs, 450 lbs – 500lbs, 650 lbs – 800 lbs, 850 lbs -900 lbs steady to 5.00 lower, 400 lbs – 450 lbs, 500 lbs – 650 lbs, 800 lbs – 850 lbs, 900 lbs – 950 lbs steady to 5.00 higher. Feeder heifers steady to 5.00 higher, except 450 lbs – 500 lbs, 750 lbs – 800 lbs 1.00 to 5.00 lower.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 2/15/2022
This Week: 2,603 Last Week: 1,776 Last Year:
Compared with last Tuesday: Steer’s under 450 lbs steady, 450 to 700 lbs 3.00 to 5.00 higher, over 700 lbs steady to 1.00 higher. Heifer’s under 400 lbs mostly steady in a light test, 400 to 500 lbs 3.00 to 5.00 higher, 500 to 600 lbs 1.00 to 2.00 instances 5.00 higher, over 600 lbs steady. Trade and demand moderate to good.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 2/15/2022
This Week: 4,436 Last Week: 2,145 Last Year:
Compared to last week, steers under 700 lbs sold 5.00-7.00 higher and heavier weights traded steady. Heifers sold steady to 6.00 higher with most of the gain on the 550-625 lb weight range.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 2/15/2022
This Week: 3,659 Last Week: 980 Last Year:
Compared to last week, steer and heifer calves under 700 lbs. traded 10.00-15.00 higher with spots 20.00 higher. Heavier weight steers and heifers traded steady to firm. Demand was very good on a moderate to heavy supply.
Cattle slaughter from Tuesday estimated at 123,000 head, the highest single day total so far this year, up 1,000 from last week and up 31,000 from last year. Hog slaughter from Tuesday estimated at 478,000 head, up 6,000 compared to a week ago and up 69,000 compared to a year ago.
Boxed beef cutout values lower on Tuesday on strong demand with 165 loads sold.
Choice Cutout__270.37 -3.59
Select Cutout__267.82 -.93
CME Feeder Cattle Index__162.71 -.45
CME Lean Hog Index__91.84 +1.33
Pork Carcass Cutout __106.72 -1.26
National Wtd Avg Carcass Base__ 89.41 +2.90
February live cattle a new contract high last Friday at $143.62 with support tested Monday at $141.32. Looking at a continuous monthly chart, $151 is the spot contract high from the summer of 2015 and the next upside target, but the February contract is in delivery now and will expire at the end of the month. April is currently the heaviest traded with the contract high last week at $148.70. March feeders still very choppy, with new recent lows on January 24th at $158.22, resistance at $169 and the contract high from last August at $171.57. April and May feeders hit new contract highs last week while August forward hit new contract highs again yesterday. If you look again at a continuous monthly chart, the spot or nearby contract has not been this high since January 2016 with the next upside target is at $192.60, the high from November 2015. April lean hogs now the front month with a new contract high last week at $107.70. Nearby support tested Monday at $101 with resistance next up around $110.
Grains under pressure all day on Tuesday as the slightly wetter forecast for Argentina and chatter that Russian troops are backing off the Ukraine border triggered the selling spree. Follow that up with reports that cyber-attacks were hitting Ukraine during trading yesterday had little impact the markets. Wheat futures the leaders lower, soybeans following suit and corn was drug lower. NOPA January 2022 Soybean Crush data mid-morning wasn’t supportive either. Domestic crush for January reported at 182.2 MBU, pre report average estimate at 186.7 MBU, and 186.4 MBU in December 2021. September 2021 – January 2022 total at 886 MBU, -1.1% from same time period a year ago. USDA total crush estimate this marketing year at 2.215 BBU, +74 MBU or +3.5% from last year.
Grains bouncing back higher overnight led again by soybeans. Not much in the new category for market moving headlines overnight. Global equities mostly quiet overnight, U.S. equites pointing steady to slightly lower, US$ lower and crude $1+ higher. Corn finished the overnight steady to 2 higher, soybeans 4 to 11 higher and wheat 1 lower to 1 higher.
Paraguay crush officials concerned about supply this year. Paraguay of course doesn’t get a lot of attention as Brazil and Argentina combined to produce 184 MMT of soybeans last year or ½ of the world’s production and Paraguay only produced 10 MMT. This does make them though the 5th largest world soybean producer and last year they eclipsed Argentina to become the 3rd largest exporter behind Brazil and the U.S. This year’s drought looks to cut Paraguay’s production in half yet crushers still consuming 2 to 3 MMT. On the flip side or bearish comments overnight…Chinese media touting officials there, yet again, talking about ways to reduce soymeal usage in feed rations. China imported nearly 100 MMT of soybeans last year. These “unnamed officials” were quoted as saying that China could cut imports by 30 MMT by promoting lower soymeal usage and using alternative proteins. USDA reported this morning a private sale of 132,000 MT or 4.85 MBU of new crop soybeans sold to China.
Mild yet windy conditions to another wintry mix is the main weather headline today. Precip looks to favor eastern KS and OK up through the Corn Belt then much below normal temps to begin next week in the Northern Plains. The 6-10 day outlook still showing below normal temps west and above normal east with above normal precipitation across most of the country. South America still mostly dry this week in the already stressed areas, but forecast showing some better rain chances for Argentina next week and towards the end of the month.
March corn contract high last week at $6.62 ¾, testing nearby support this week at $6.35 and $7.50 still the next upside target. December 2022 corn a new contract high on Monday at $5.98 ¾ with nearby support at $5.85 then around $5.77. March soybeans contract high last week at $16.33 with support around $15.30 and nearby resistance at $15.77 then the $16 level. November 2022 soybeans contract high last week as well at $14.69 ¾ with nearby support being tested and holding so far this week at $14.23. March KC wheat still holding a lower trend the past 2+ months with support from $7.90 to $8 and resistance at $8.30 then $8.50. March Chicago wheat also holding the lower trend with support around $7.65 and resistance around $8.20. March MPLS wheat with support around $9.30 and resistance around $9.75. March Soybean Meal contract high last week at $477.90 with support at $438 then $431.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
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