Date: January 9th, 2023
Livestock futures finished lower last Friday which again led to losses week over week. Cash fed cattle trade on the lighter volume side from steady to $1 lower than the week previous. Live trade in the South reported at $157 with trade in North from $157 to $160 live and mostly $252 on a dressed basis. Beef prices continue to climb higher which is overall friendly as packers should be near max capacity and trying to sell as much as possible. Choice Beef to Pork Cutout now out to 3.37:1 which means beef is over 3 times more expensive to pork and could begin to hurt beef demand. Weekly export sales in essence wrapped up for the year with net cancelations for 2022 but higher sales to offset for 2023. The combined net total for beef at 5,600 MT and pork at 21,700 MT.
For the week, Friday December 30th through Friday January 6th, February Live Cattle -$1.12, April -$1.12, January Feeder Cattle -$1.00, March -$.57, February Lean Hogs -$7.42, April -$5.65. Boxed Beef, Choice +$1.01 @ $282.99, Select +$8.41 @ $259.34, Pork Carcass Cutout -$3.90 @ $84.00.
Cattle slaughter last week estimated at 563,000 head, up 16,000 from the week previous but down 56,000 from last year. Hog slaughter last week estimated at 2,296,000 head, up 102,000 compared to the week previous but down 256,000 compared to a year ago.
Boxed beef cutout values on Friday higher on moderate demand with 108 loads sold.
Choice Cutout__282.99 +1.36
Select Cutout__259.34 +2.39
CME Feeder Cattle Index__180.46 +.15
CME Lean Hog Index__77.49 -.77
Pork Carcass Cutout __84.00 -.32
February live cattle holding the long-term higher trend with the contract high at $159.17 from December 29th and resistance next up around $163. Friday’s move lower did touch a new recent low though at $156.60, right at the 20-day moving average with support next down at $155.50. January feeders trending higher over the past couple months with a new recent high last week at $185.65, resistance next up around $188 and support down at $181.25 then $180.30. January feeders expire on the 26th and will of course be closely tied to the cash index. I would think the $180 to $185 range will hold over the next few weeks. February lean hogs screaming lower, 6 consecutive lower settlements, since testing resistance around $92 two weeks ago. A new recent low was hit last Friday at $80.12 with support next the one-year low down at $76.40.
Grains were mixed to begin 2023. The soy complex led the way higher on Friday with new contract highs for meal and the only gaining for the week. Soybeans did finish higher on Friday, but enough damage was done earlier in the week that soybeans still finished $.31 lower week over week. Friday’s gains coming from drier forecasts again for Argentina, conditions deteriorating while Brazil remains in good shape. The Buenos Aires Grain Exchange reports that despite a slight improvement in moisture conditions, soybean crop ratings continued to decline from 10% G/E and 28% P/VP last week to 8% G/E and 38% P/VP this week. This compares to ratings this time last year of 50% G/E and 13% P/VP. Soybean plantings advanced from 72.2% last week to 81.8% and compared to the 5-year average of 92.8% for this date.
Wheat futures hit the hardest as Australian harvest continues with better than expected yields. There had already been quite a bit of a chatter that Australia could have a record wheat crop this year. USDA last month increased the production estimate to 36.6 MMT with some private estimates now as high as 42 MMT. Disappointing weekly export sales as old and new crop combined wheat sales totaled 5.3 MBU and only 12.6 MBU of old crop corn. Soybeans sales were with the range expected with a combined old and new crop total of 32.0 MBU.
For the week, Friday December 30th through Friday January 6th, March Corn -$.24 ½, May -$.24, March Soybeans -$.31 ½, May -$.31 ½, March KC Wheat -$.56, July -$.52 ¾, March Chicago Wheat -$.48 ½, July -$.46 ¾, March MPLS Wheat -$.37, May -$.30 ¾, March Soybean Meal +$6.60/T, May -$.30/T.
Grains were fairly quite overnight trading both sides of unchanged as we begin the first full week of trading for the New Year with a barrage of grain reports from USDA coming this Thursday morning. Equites and energies higher this morning with crude over $2 higher as the US$ is lower. Corn finished the overnight steady to 3 lower, soybeans 2 to 7 higher and wheat 1 higher to 3 lower. The forecast for Argentina a little bit drier than last Friday’s last run.
The Average pre report trade estimates for the USDA grain reports to be released this Thursday at 11 am CST are as follows…
US final 2022 Corn production at 13.93 BBU, unchanged from last month, with a slightly higher yield at 172.5 BPA and slightly lower harvested acres at 80.76 mln acres
US final 2022 Soybean production at 4.362 BBU, 16 MBU higher than last month on a slightly higher yield at 50.3 BPA and slightly higher harvested acres at 86.62 mln acres
22/23 US Corn Ending Stocks at 1.31 BBU vs. 1.257 BBU last month
22/23 US Soybean Ending Stocks at 235 MBU vs. 220 MBU last month
22/23 US Wheat Ending Stocks at 580 MBU vs. 571 MBU last month
22/23 Argentina Corn production at 51.9 MMT down from 55 MMT last month
22/23 Argentina Soybean production at 46.7 MMT down from 49.5 MMT last month
22/23 Brazil Corn production at 126.3 MMT up from 126 MMT last month
22/23 Brazil Soybean production at 152.3 MMT up from 152 MMT last month
World 22/23 Corn ending stocks at 297.9 MMT vs. 298.4 MMT last month
World 22/23 Soybean ending stocks at 101.7 MMT vs. 102.7 MMT last month
World 22/23 Wheat ending stocks at 268.0 MMT vs. 267.3 MMT last month
US Quarterly Stocks, December 1st US Corn stocks at 11.15 BBU vs. Sept 1, 2022 stocks at 1.377 BBU and Dec 1, 2021 stocks at 11.642 BBU
US Quarterly Stocks, December 1st US Soybean stocks at 3.13 BBU vs. Sept 1, 2022 stocks at 274 MBU and Dec 1, 2021 stocks at 3.15 BBU
US Quarterly Stocks, December 1st US Wheat stocks at 1.34 BBU vs. Sept 1, 2022 stocks at 1.776 BBU and Dec 1, 2021 stocks at 1.378 BBU
2023 US total Winter Wheat Planted Acres at 34.48 mln acres vs. 33.27 mln in 2022
2023 US HRW Planted Acres at 23.82 mln acres vs 23.08 last year
2023 US SRW Planted Acres at 6.89 mln acres vs. 6.57 mln last year
2023 US White Winter Wheat Planted Acres at 3.63 mln acres vs. 3.618 mln last year
Heavy rains in the forecast again over this next week for the West Coast with ½ to 1 inch scattered rains for the eastern half of the U.S. The 6-10 day outlook showing above normal temps and precipitation across the entire country except for a small pocket of below normal in the Southwest.
March corn has support at $6.48 ½ with resistance at $6.85, last week’s low vs. the high from December 30th. March soybeans holding the long-term higher trend with a new recent high on Tuesday at $15.37 ½, resistance next at $15.45 and support at last week’s low down at $14.65. March KC wheat still holding the lower trend with support around $8.20 and resistance at $8.84. March Chicago wheat has support at $7.23 with resistance at $8.00. March MPLS wheat has support at $8.90 with resistance at $9.40. March Soybean Meal touching the contract high at $479 overnight with support at $458.
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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