Date: December 7th, 2022
Mostly a negative day for all commodities yesterday with outside pressure and little new news to feed the bull. Cattle futures did begin the day in positive territory but those gains were quicky wiped out with both fats and feeders finishing triple digits lower. Corn was higher early in the session which got the ball rolling lower for cattle but overall I feel the pressure on the equities and sharply lower beef prices were the ultimate culprit. It is not a shock to see beef prices fading into the end of the year, but Monday’s Choice close was sharply lower followed up additional loss yesterday for yet another new low for the year. Only light volume cash fed cattle trade so far this week at $247 dressed in NE which is a couple dollars lower than the top end traded last week.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 12/6/2022 – Final
This Week: 7,060 Last Week: 4,580 Last Year: 7,553
Compared with last Tuesday: Steer calves under 600 lbs 5.00 to 8.00 higher, over 600 lbs 2.00 to 3.00 higher. Heifer calves under 550 lbs mostly steady, over 550 lbs 3.00 to 5.00 higher. Yearling feeder steers steady. Yearling feeder heifers steady to 1.00 higher.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 12/6/2022 – Final
This Week: 4,299 Last Week: 3,367 Last Year: 3,476
Compared to last week, steers and heifers sold steady to 6.00 higher. It was the Annual Customer Appreciation sale at Kingsville Livestock which always brings a heavy supply of cattle and a large crowd. Demand was good and trade was active.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 12/6/2022 – Final
This Week: 3,304 Last Week: 3,211 Last Year: 3,928
Compared to a week ago, steer calves traded steady to 4.00 lower while heifer calves traded steady. Yearling steers traded steady in a light test of the market with yearling heifers not well tested. Demand was moderate on a moderate supply.
Cattle slaughter on Tuesday estimated at 128,000 head, matching last week and up 4,000 from last year. Hog slaughter on Tuesday estimated at 491,000 head, up 4,000 compared to a week ago and up 20,000 compared to a year ago. Monday’s slaughter estimate though lowered by 8,000 head to 483,000.
Boxed beef cutout values on Tuesday lower on moderate to strong demand with 147 loads sold.
Choice Cutout__242.65 -.66
Select Cutout__219.14 -1.97
CME Feeder Cattle Index__178.53 +.39
CME Lean Hog Index__82.94 +.15
Pork Carcass Cutout __89.82 +3.36
December live cattle still holding the long-term higher trend with the contract high on November 23rd at $154.72. Yesterday’s collapse though broke through nearby support with the next at $151 but a free fall below that all the way to $147. January feeders breaking resistance for a new recent high last Friday. The reversal yesterday stopped shy of the 20-day moving average and nearby support at $180 with the next down around $177. December lean hogs expiring next week and look to be comfortable in the $83.50 to $80.50 range. The February contract had 4 consecutive days higher wiped out yesterday with resistance still at $92 and support down around $84.
Over in the grains, another day of wheat the leader lower and soybeans, really meal, the leader higher. Argentina is dry and the forecasts got a little worse yesterday. USDA announced more soybean sales to China and unknown destinations. Continued chatter that China is easing the COVID lockdowns also supportive to soybeans. Meal has been on a rampage the past few days and into new contract highs while soybean oil has been crashing. Chicago wheat extending losses again, hitting new lows for the year yet again. Both KC and MPLS wheat markets are closing on the lows hit in August. Corn seems stuck between the collapsing wheat markets and rallying bean markets, although the past few trading sessions have leaned lower and taken corn through nearby support levels.
Grains overnight traded steady to higher as soybeans continue to be the leader. Soybeans finished the overnight 5 to 8 higher, corn steady to 1 lower, and wheat actually in the green, 1 to 9 higher. Outside markets are mixed with equites pointing lower, energies higher and US$ lower.
Taiwan purchased 42,750 MT or 1.6 MBU of U.S. milling wheat and 1 cargo of corn from Brazil. South Korea also booked a cargo of corn from either South Africa or South American origin and 25,000 MT of optional origin, non-GMO soybeans. Even with the sanctions in place and Russia still claiming exports have been hindered, it appears they could hit a record high over 4 MMT of wheat exported this month. Marketing year to date is around 2% higher for wheat and near 10% higher for all grains compared to a year ago.
USDA will update the balance sheets on the grains this Friday with corn, soybeans and wheat domestic stocks all expected slightly higher than a month ago. Average trade estimates for Friday’s USDA crop report are as follows…
US 22/23 Corn ending stocks average estimate at 1.238 BBU, November at 1.182 BBU
US 22/23 Soybean ending stocks avg est at 233 MBU, November at 200 MBU
US 22/23 Wheat ending stocks avg est at 580 MBU, November at 571 MBU
World 22/23 Corn ending stocks avg est at 301.0 MMT, November at 300.8 MMT
World 22/23 Soybean ending stocks avg est at 102.3 MMT, November at 102.2 MMT
World 22/23 Wheat ending stocks avg est at 268.0 MMT, November at 267.8 MMT
22/23 Argentina Corn production avg est at 53.8 MMT, November at 55.0 MMT
22/23 Argentina Soybean production avg est at 48.8 MMT, November at 49.5 MMT
22/23 Brazil Corn production avg est at 126.3 MMT, November at 126.0 MMT
22/23 Brazil Soybean production avg est at 152.5 MMT, November at 152.0 MMT
Some light rain chances still in the forecast for the Southern Plains and Midwest this week with heavy rains for the Southeast and snow in the Dakotas early next week. The 6-10 day outlook showing above normal temps for the eastern half of the U.S. and below normal for the western half with above normal moisture across the entire nation except for a small pocket of below normal in the Southwest.
March corn breaking support last week and hitting a new 4-month low overnight at $6.35, support next down around $6.20 and resistance at $6.74. January soybeans still choppy but a higher trend holding with a new recent high last week at $14.78 ½ and support at $14.25. March KC wheat holding a lower tend with a new recent low yesterday at $8.21 ¾, the low from August down at $8.11 ¾ and resistance at $9.05. March Chicago wheat holding a steeper lower trend, a new low for the year yesterday at $7.23 ½ and resistance at $8.00. The soon to expire December contract down to $7.02 ½ with the spot price not below the $7 level since September of 2021. March MPLS wheat to a new recent low yesterday at $8.90, the low from August down at $8.75 ¾ and resistance at $9.45. January Soybean meal the leader, settling higher the last 5 consecutive trading days, hitting a new contract high again overnight at $454.4 with support down at $409.
Loewen and Associates, Inc.
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