Date: February 1st, 2023
Ag futures mixed yesterday on somewhat quiet trading for the last day of January. Live cattle were triple digits higher on Monday and feeders scored followed with big gains on Tuesday. No new news at the close yesterday as the Southern Plains begin to get back to more normal temps for the balance of this week and the expectations for the Cattle Inventory report were still friendly, yet not released until after the close. Corn spent most of the day steady to lower which also helped support the bump for feeders.
USDA Cattle Inventory – January 1st all cattle and calves totaled 89.3 million head, down 3% from a year ago. Beef cows totaled 28.92 million head, down 3.6% from last year and the lowest inventory since 1962. The 3.6% drop this past year was the largest percentage drop since 1986. Beef replacement heifers totaled 5.16 million head, down 5.8% from a year ago and the smallest since 2011. Beef replacement heifers expected to calve this year totaled 3.17 million head, down 5.2% from a year ago and also the smallest since 2011.
Winter Livestock (Tuesday) – La Junta, CO
Livestock Weighted Average Report for 1/31/2023 – Final
This Week: 3,107 Last Week: 1,282 Last Year: 2,583
Compared with last Tuesday: Steer calves mostly steady. Heifer calves under 550 lbs 5.00 to 8.00 higher instances 10.00 higher on heifer calves under 500 lbs. Yearling feeder steers 2.00 to 3.00 higher. Yearling feeder heifers steady to 1.00 higher.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 1/31/2023 – Final
This Week: 2,670 Last Week: 1,955 Last Year: 3,565
Compared to last week, the majority of steers under 650 lbs traded 10.00-15.00 higher and those over 650 lbs sold firm to 3.00 higher. Heifer calves under 550 lbs 6.00-10.00 higher and those over 550 lbs sold firm based on light comparisons from last week. Demand was good to very good with more favorable weather conditions for both buyers and sellers than last week.
Cattle slaughter on Tuesday estimated at 127,000 head, unchanged from last week and up 4,000 from last year. Hog slaughter on Tuesday estimated at 483,000 head, down 1,000 compared to a week ago but up 5,000 compared to a year ago.
Boxed beef cutout values on Tuesday lower on Choice and higher on Select on moderate demand with 118 loads sold.
Choice Cutout__266.09 -2.01
Select Cutout__252.92 +1.40
CME Feeder Cattle Index__180.42 +.54
CME Lean Hog Index__72.58 -.13
Pork Carcass Cutout __80.25 -.03
February live cattle holding the long-term higher trend and looking to test the contract high at $159.17 which was hit back on December 29th with support at $156.50. March feeders took out the 4-month long higher trend a couple weeks ago with a new recent low at $179.17 on January 19th but has since rallied back with nearby support now at $182.50. Resistance next is at $187.27 then the January high up at $188.75. February lean hogs continue to drift lower with a new recent low again yesterday at $74.60 and resistance around $80.
Grains traded both sides of unchanged on Tuesday as if looking for further direction. Old crop soybeans continue to gain as Argentina has dry weather in the forecast and rumors still swirling that China will be in soon for more U.S. beans. Chicago wheat ended the leader higher yesterday, been awhile since I have been able to say that! U.S. winter wheat areas are showing some improvement but EU and Black Sea weather now showing some concerns. There’s also some indications that Russian wheat exports are slowing which could open the door for others as it remains the most available and cheapest origin.
Grains again mixed and fairly quiet overnight. Outside markets have equities lower, US$ lower and energies higher with crude up $.50/barrel. Corn finished the overnight 2 lower March through July and 1 higher beyond, soybeans 1 lower in March and 2 higher in November and wheat 1 higher to 5 lower.
South Korea purchased optional origin corn for delivery in May. Egypt is tendering for corn with U.S. currently the cheapest offered. No daily sales announced by USDA which is frustrating with still no new confirmed export sales to China.
Much below normal temps moving into the Great Lakes and Northeast with heavy rains for the Southeast heading into the weekend. The 6–10-day outlook showing above normal temps and precipitation for the eastern half of the U.S. with below normal temps out West and below normal moisture for the Northern Plains and Southwest.
March corn still rangebound but showing a higher trend over this past month with nearby support around $6.50 and resistance at the January high at $6.88 ¾ as $6.88 ½ was yesterday’s high. March soybeans holding the long-term higher trend with the January high at $15.48 ½, the contract high from June at $15.72 ¼ and support at $15.08. March KC wheat taking out the lower trend going back to mid-October with support at $8.44 and resistance at $8.83 then $8.94. March Chicago wheat still holding a lower trend but just about to test that line this week with support at $7.44 and price resistance around the $8 level. March MPLS wheat testing the lower trend this week with support at $8.85 and resistance from $9.30 to $9.40. March soybean meal hit a new contract high on Monday at $490.30 with the spot high from August the next upside target at $531.20 and support down around $470.
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