Date: September 7th, 2022
Cattle futures continued their technical bounce higher as hogs touched new recent lows but then finished with a decent rally as well. Here’s hoping that the fundamental side will back up the rally for cattle with higher cash trade this week? Trade has been steady to lower the past couple weeks and volume lighter heading into the Labor Day break. Early asking prices in the South have picked up to $144 live as feedlots and packers alike know slaughter ready supply will be tighter later this fall. Feeders even held gains with corn a dime higher yesterday and the most active October contract held triple digit gains.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 9/6/2022 – Final
This Week: 1,748 Last Week: 1,753 Last Year: 2,330
Compared to last week, steer calves over 550 lbs. and all weights of heifers traded 3.00-6.00 higher while lighter weight steers traded 3.00- 6.00 lower. Demand was good on a light supply.
OKC West Livestock Auction – El Reno, OK
Livestock Weighted Average Report for 9/6/2022 – Preliminary
This Week: 1,707 Last Week: 7,128 Last Year: 4,429
Compared to last week: Steer calves3.00 to 5.00 higher on a light test. Heifer calves not well tested, a lower undertone noted. demand was good. Final report will be posted Wednesday 09/07/2022. Sold today 1707 with 4500 estimated for tomorrow.
Cattle slaughter from Tuesday estimated at 127,000 head, up 1,000 from last week and up 8,000 from last year. Hog slaughter from Tuesday estimated at 483,000 head, up 3,000 compared to a week ago and up 12,000 compared to a year ago.
Boxed beef cutout values on Tuesday higher on moderate demand with 125 loads sold.
Choice Cutout__260.47 +1.05
Select Cutout__239.30 +.72
Pork Carcass Cutout __104.33 +2.08
National Wtd Avg Cash Carcass Base__98.30 +.62, 11,010 head
October live cattle holding a higher trend since the May 31st low with support at $142 and resistance at $146. September feeders tested the higher trendline last week, still the only feeder contract yet to make new contract high recently with a recent high last month at $187.77, the contract high up at $188.25 and support at $182. October lean hogs holding a lower trend since mid-August, breaking the $90 support last Friday with the next down at $86.82 and resistance at $94.40.
Grains were mixed with corn higher, the entire soy complex lower and wheat holding steady to higher yesterday. Private estimates continue to roll in ahead of next Monday’s USDA crop report with overall lower corn yield estimates and steady to higher soybean estimates. The biggest pressure hitting the soy complex was the implementation of the updated soybean exchange rate by Argentina. This was put in place to encourage producer selling and also created a more active soy and meal export market. Export inspections for the week ending September 1st were just okay. This did officially wrap up the old crop marketing year for corn, soybeans and grain sorghum. It most certainly appears, when also adding in census data, that USDA needs to increase both the old crop corn and grain sorghum export numbers next week and should be able to leave the soybean export estimate unchanged. Crop conditions were left unchanged as fall crops continue to mature. There was not a national harvest number yet, but KS corn harvest speeding ahead now at 16% complete compared to only 3% last year and 4% 5-year average. Spring wheat harvest up 21% to now 71% complete and winter wheat planted reported for the first time at 3% nationally which matches the 5-year average. The furthest along is CO at 13% but 21% last year.
Grains mixed again overnight but mostly higher led by the wheat markets this time. Corn and soybeans finished the overnight 5 higher and wheat 23 to 30 higher. Equities were mixed, pointing lower this morning, but higher when grains opened and the US$ continues to charge higher. Energies were only slightly weaker overnight with crude down $3/barrel when grains opened.
The biggest news story overnight centered on comments From Russian President Vladimir Putin. Attending an economic conference in Russia, he said that the “safe passage” brokered deal allowing Ukraine to ship through the Black Sea is not working as intended. He plans to try and limit the countries for which Ukraine is currently exporting grain and other food exports. Putin believes the deal was constructed to allow poor and developing countries to receive the grain and help alleviate surging food prices yet stated almost all the grain shipped so far is only going to the EU. Russia has already been complaining that no steps have been taken to remove some logistical sanctions which it says disrupt their own exports as promised.
Additional friendly news this morning as Stats Canada reported 2nd quarter grain stocks of all wheat at 3.67 MMT with expectations at 3.9 MMT and stocks a year ago at 5.67 MMT. USDA reported a private sale of 257,400 MT or 10.1 MBU of corn sold to Mexico of which 8.9 MBU is for delivery this marketing year and 1.2 MBU for next marketing year.
Heavy rains expected to continue this week in the Southeast and excessive heat stretching from ND to CO. The 6-10 day outlook showing above normal temps for the western half of the U.S. and the East Coast with below normal moisture though the middle of the country and above normal for the western third and East Coast.
September grain contracts now in delivery and volume is thin. December corn holding a higher trend since late July with a new recent high overnight at $6.84, resistance next up at $7.00 and support around $6.50. November soybeans breaking the higher trend line going back to late July and trending lower now since August 24th with support at $13.76 and resistance at $14.23 then from $14.84 ½ to $14.89, the highs from July and August. December KC Wheat locked in a choppy/range bound trading pattern now for 2 months with nearby support at $8.63 then the recent low at $8.08 ½ and a double top at $9.21 ½ the line of resistance. December Chicago wheat also choppy with support at $7.83 then $7.43 and resistance around $8.60. December MPLS wheat the same sideways/choppy trading with the recent low at $8.61 ¾ and resistance at $9.45 then $9.60. October meal gapping lower yesterday and breaking the higher trend that started in early July with support next at $400.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
785-537-3336
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