Date: February 28th, 2022
A very volatile market the past few days as expanded daily limits were needed on Friday after wheat was $.50 limit up on Thursday then reversed $.75 limit lower on deferred contracts and $.80+ lower on the front month Chicago wheat. Almost all of the markets actions tied to the Russian invasion of Ukraine that began mid last week. Both countries are major producers and exporters of wheat along with oilseeds and Ukraine is a major exporter of corn as well. Markets flipped Friday as it was reported that China was flying warplanes near Taiwan, according to the Chinese just a military exercise. An escalation on this front is very bearish to Ag markets as both are major importers of American products. Also on Friday, after the first wave of sanctions were reviewed, Russia had not been cut from international banking. This seems to be in the next round of sanctions though as Russia will be cut from the SWIFT international payments system effectively curbing any imports or exports.
Fundamental news is in essence a non-factor for the time being but here’s a few items to round out last week. Cash fed cattle trade steady in the South at $142 live in the South and while steady to $1 higher than the week previous at $144 to $145 live and $227 dressed in the North. A neutral Cattle on Feed report Friday afternoon as all estimates were near expectations…Cattle on Feed as of February 1st totaled 12.2 million head, 101% vs. a year ago. January placements totaled 2 million head, 99% vs. last year and marketings in January totaled 1.77 million head, only 97% compared to a year ago. Weekly exports sales and shipments for pork were friendly while beef sales and shipments turned lower. Weekly grain export sales were at or above expectations. Argentina received a little more and beneficial rain last week than was forecasted.
For the week, Friday February 18th through Friday February 25th, February Live Cattle -$3.97, April -$3.95, March Feeder Cattle -$5.40, April -$6.10, April Lean Hogs -$5.72, June -$4.75. Boxed Beef, Choice -$7.58 @ $258.27, Select -$7.22 @ $255.41, Pork Carcass Cutout +$3.41 @ $113.32.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 2/20/2022 – 2/26/2022
Current Week: 25,571 Last Report 2/14/22: 37,879 Last Year: 18,113
Compared to last week: Feeder steers and heifers 1.00-3.00 lower. 600- 695 Lbs feeder heifers 3.00-6.00 higher . Stocker steers and steer calves 2.00-4.00 lower. Stocker heifers and heifer calves sold 1.00-3.00 lower. Demand moderate for feeder cattle. Demand continues good for stockers and calves.
Cattle slaughter from Friday estimated at 119,000 head and Saturday only 56,000 head. For the week, 647,000 head, down 13,000 from the week previous and down 18,000 from last year. Beef production estimated at 544.7 million pounds bringing year to date now only -0.5% vs. last year and year to date slaughter only -0.4%.
Hog slaughter from Friday estimated at 477,000 head and Saturday at 131,000 head. For the week, 2,507,000 head, up 9,000 compared to the week previous but down 142,000 compared to a year ago. Pork production last week estimated at 548.2 million pounds with year to date now -8.1% compared to a year ago and slaughter -8.0%.
Boxed beef cutout values on Friday lower Choice and higher Select on moderate demand with 104 loads sold.
Choice Cutout__258.27 -.97
Select Cutout__255.41 +.86
CME Feeder Cattle Index__160.58 -1.24
CME Lean Hog Index__98.40 +.36
Pork Carcass Cutout __113.32 -.81
National Wtd Avg Carcass Base__ 87.78 -.35
February live cattle expire today and have now taken out all the past month’s gain. The April contract still holding a higher trend since this fall but also all gains over this past month wiped out. The contract high from February 10th at $148.45 with support next at the January low at $139.02. March feeders gapped lower last Thursday for a new 4 month low at $156.52 and nearly filled the gap on the rally back on Friday. Support is next at $152.25 with resistance around $165. April lean hogs breaking the 2 month higher trend to end last week with support next at $101 and the contract high from last Wednesday at $112.85.
Moving over specifically to the grains, not much to add for last week’s news. It is expected that at least a month will pass before Ukraine is back processing and exporting. Ukraine is the world’s #1 sunflower oil producer followed closely by Russia. World veg oil demand has already been on fire this season and expect all oils to reach new highs.
For the week, Friday February 18th through Friday February 25th, March Corn +$.05 ¼, December -$.18, March Soybeans -$.11 ¼, November -$.48 ¾, March KC Wheat +$.51 ½, July +$.40 ½, March Chicago Wheat +$.46, July +$.49 ¼, March MPLS Wheat -$.08 ½, September -$.08 ¼, March Soybean Meal +$.40/T, May -$3.00/T.
Grains exploding higher overnight as Russia is cut out of the SWIFT banking system. Ukraine has lifted is weekend long curfew and talks began overnight at the Belarus border between Ukraine and Russian officials. Russian markets are not open today and interest rates were doubled overnight to 20%. U.S. equites sharply lower this morning, US$ lower and energies higher. Corn finished the overnight 16 to 27 higher, soybeans 22 to 43 higher and wheat 20 to 60 higher. Today’s trading limits are $.35 for corn, $.90 for soybeans and the expanded $.75 for wheat. This of course applies to all except the March grain contracts as today is first notice day, so no daily limits.
USDA reported more soybean sales this morning…120,000 MT or 4.4 MBU old crop for unknown destinations and 136,000 MT or 5 MBU new crop to China. The cheapest offer for Egypt wheat tender this morning coming from France at $429/MT, $11.68/BU, delivered. There of course are no offers from Russia or Ukraine. There is a U.S. offer this round at $517/MT delivered or $14.07/BU.
Mild if not even above average temps for the Plains this week, but still dry. The 6-10 day outlook showing below normal temps west and above normal east with above normal precipitation across most of the country. Argentina’s forecast back to below normal moisture and above normal temps.
March corn contract high from Thursday’s spike at $7.18 ¾ with Friday’s low the nearby support at $6.57. December corn up to a new contract high at $6.46 ¼ with Friday’s low at $5.85 ½. The upside target for the nearby contract at $7.50 ½. March soybeans new contract high on Thursday at $17.65 down to $15.85 ½ on Friday. November soybeans up to $15.55 then down to $14.03. March KC wheat roughly a $1 range last Thursday and Friday, new high at $9.63 ¾ and March Chicago wheat similar with the new high at $9.51 ¼. March MPLS wheat up to $11 last week and Friday’s low at $9.43. March Soybean Meal a new contract high at $493.10 with support at $440.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
866-341-6700