Date: December 28th, 2022
Livestock futures began the week mixed as live cattle were supported by sharply higher beef prices but feeders lower with grains higher. Beef prices continue to rally this month, up over $26 since the beginning of the month and over $37 from this month’s lows. Choice sharply again yesterday, now topping $280. Lean hogs started this week sharply higher in the nearby supported by last week’s friendly Quarterly Hogs and Pigs report. USDA also released its monthly cattle on feed report late Friday which was overall friendly as well even though placements were a little higher than expected. The pre report trade estimate was at 96% vs. a year ago but November placements totaled 1.93 million head, only 2% below a year ago. No cash fed cattle reported yet this week as last week was again steady to $1 higher than the week previous.
Cattle slaughter on Monday at 6,000 head. Tuesday’s estimate at 128,000 head, up 4,000 from last week and up 7,000 from last year. Hog slaughter on Monday at 19,000 head. Tuesday’s estimate at 490,000 head, up 1,000 compared to a week ago and up 14,000 compared to a year ago.
Boxed beef cutout values on Tuesday sharply higher on Choice and steady to higher on Select on moderate to weak demand with 78 loads sold.
Choice Cutout__280.04 +8.09
Select Cutout__245.64 +.17
CME Feeder Cattle Index__176.37 -.38 from 12/23
CME Lean Hog Index__78.60 -.14 from 12/23
Pork Carcass Cutout __90.92 -1.14
December live cattle still holding the long-term higher trend with a new contract high last week at $157.17, the highest spot price since April 2015. The contract expires on Friday and February will take over as the nearby contract. February live cattle hit a new contract high yesterday at $158.42 with support down at $155.75 and resistance next up around $164 from the continuous chart. January feeders also trending higher but still unable to break through the resistance around $185 with support down last week’s low at $181.25. February lean hogs again looking to test the resistance just shy of $92 with support around $87.
Grains settled mostly higher on Tuesday led by gap higher moves for both corn and soybeans at the open. Soybeans were the leader most of the morning as only scattered showers fell in Argentina and the forecasts remain dry until next week. Gains faded during the trading session, but corn held up and is back testing nearby resistance after rallying $.40 over the past few weeks. Wheat futures were mixed with Chicago lower and KC higher yet both still holding long term lower trends. Egypt picked up a couple cargoes of Russian wheat at $339/MT or $9.23/BU delivered. This is still heavily discounted to US values with gulf bids around $10.40/BU.
Grain inspections for the week ending December 22nd were released yesterday with corn and soybean export loadings above expectations while wheat was below. Corn inspections totaled 33.7 MBU, just slightly above a week ago, still well below the average needed per week now at 47.6 MBU. Mexico and China combined to take 80% of the total. Year to date inspections now down 28% from last year. Soybean inspections totaled 64.4 MBU, down from last week but still double the average needed per week. China remains the #1 buyer taking 39.5 MBU. Year to date remains 7% behind last year’s pace. Wheat inspections totaled 10.3 MBU, again under the average needed now at 14.5 MBU. Year to date though remains on pace to meet the USDA estimate and is 2% behind a year ago.
Grains were mixed overnight with soybeans again the leader higher while corn and wheat traded both sides of unchanged. Equites higher this morning, US$ and crude lower. Corn finished the overnight 1 lower, soybeans 11 to 12 higher and wheat 4 lower to 2 higher.
Heavy rains in the forecast for the Southeast through mid next week. The 6-10 day outlook showing above normal temps across the eastern half of the country with above normal precipitation forecasted across the entire country.
March corn breaking the lower trend and now holding a short-term higher trend with a new recent high yesterday at $6.75 ¾ and support at the 20-day moving average at $6.54. January soybeans holding the long-term higher trend with a new recent high yesterday at $15.16 ¾ and support also at the 20-day moving average now at $14.69 ½. March KC wheat testing the lower trendline again this week with resistance at $9.05 and support at $8.60. March Chicago wheat has resistance at $8.00 with support at $7.58. March MPLS wheat has resistance at $9.45 with support at $9.18. January Soybean Meal a new contract high on December 9th at $474.4, the spot high from August at $531.2 and nearby support at $446.
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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