Date: February 22nd, 2023
Livestock futures all higher yesterday supported by higher cash and robust demand. Pork exports have been very strong so far this year and boxed beef sharply higher the past couple weeks. Feeders only able to make small gains as higher corn futures on Tuesday kept the lid on any rallies. No cash fed cattle trade yet to report this week but asking prices in the South have already been coming forward at $164 live, another $2 higher than the bulk of last week’s trade. Last week’s negotiated cash cattle trade totaled 76,616 head. Of that 77% (59,190 head) were committed for the nearby delivery, while the remaining 23% (17,426 head) were committed for the deferred delivery.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 2/21/2023 – Final
This Week: 2,624 Last Week: 3,826 Last Year: 2,110
Compared to last week, steers and heifers sold steady to 5.00 higher. Demand was good to very good for a moderate supply of yearlings and long weaned calves. Several loads of yearlings were on hand along with some attractive consignments of grass cattle. 7 weight index steers averaged $189 and 8 weights averaged $176-$182.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 2/21/2023 – Final
This Week: 3,929 Last Week: 3,649 Last Year: 1,781
Compared to last week, feeder steers and heifers traded steady to 3.00 higher. Steer and heifer calves traded 3.00-7.00 higher. Demand was good on a moderate supply. 7 weight index steers averaged $183 to $188 and 8 weights averaged $174 to $176.
Cattle slaughter on Tuesday estimated at 127,000 head, up 2,000 from last week and from last year. Hog slaughter on Tuesday estimated at 479,000 head, also up 2,000 compared to a week ago and up 8,000 compared to a year ago.
Boxed beef cutout values on Tuesday continue higher on moderate to good demand with 114 loads sold.
Choice Cutout__287.20 +4.31
Select Cutout__270.84 +2.79
CME Feeder Cattle Index__182.59 +.38
CME Lean Hog Index__76.41 +.32
Pork Carcass Cutout __83.01 -4.71
February live cattle continue to hit new contract highs, $164.97 yesterday, with support down at $161.60 then $160.30. October 2014 was the all-time spot high for live cattle at $171.97. March feeders choppy the past couple weeks with resistance at $188.57 and support down at $185. April lean hogs carved out support two weeks ago around $82 and with yesterday’s sharply higher move, took out nearby resistance with the next up around $91.50.
Grains were mixed yesterday, the leader higher continues to be soybeans. The recent frost in Argentina and back to hot and dry over the next couple weeks supporting the markets and led to the gap higher open. You would of thought if it was a widespread event, beans could have easily made new highs and possibly even tested contract highs from this past summer. The timing is really not good at all, think of frost here around late July/early August. But like any frost event, only time will tell if and how much damage was done. Corn traded both sides of unchanged throughout the day yesterday but ultimately finished higher as well. Wheat started the day higher, more as a fall crop follower, but some support coming from the increased saber rattling by Putin as well.
U.S. weekly export inspections for the week ending February 16th remain strong for soybeans at 58.0 MBU. The delays in Brazil harvest certainly helping the U.S. get a little more business. Year to date bean inspections are now 4% ahead of last year’s pace. Inspections plus Census adjustments through December are now equal to 79% of the total export estimate. China remains the #1 destination taking 65% of the weekly total followed by Germany, Egypt and Indonesia. Wheat inspections were just under the average needed at 13.7 MBU. Year to date inspections remain on pace at 3% less than a year ago. China also the #1 destination taking a cargo+ followed closely by Japan, Mexico, Thailand and Taiwan. Corn inspections again around half what is needed at 24.5 MBU. Since soybean shipments continue to be strong, this has delayed corn shipments ramping up. Year to date inspections are now down 37% vs. a year ago and only 31% of the export total has been shipped. Mexico continues to be the #1 destination taking over 1/3 of the volume then Japan and Taiwan round out the top 3. Grain sorghum inspections totaled 2.8 MBU as China came in to grab another cargo. Year to date is still down 80% vs. a year ago and only 26% of the total export estimate has been shipped to date.
Grains turning lower overnight as wheat presses into new recent lows. Egypt and Iraq tendering for wheat this week, most likely Russian origin for Egypt again, but Iraq specifically looking for milling quality wheat from the U.S., Canada or Australia. Outside markets show equities higher, US$ steady and energies lower with crude down $.40 to $.50/barrel. Corn finished the overnight 2 lower, soybeans 3 to 4 lower and wheat 2 to 13 lower.
The USDA Ag outlook conference will be this Thursday and Friday with specific commodity outlooks and USDA’s first take on the 23/24 balance sheets, although unofficial, to be released early tomorrow morning. The average guess for the Outlook Conference planted area for soybeans is 88.6 mln acres, against last year’s 87.5 mln, and the average guess for production is 4.510 BBU vs. 4.276 BBU old crop. Ending stocks for 23/24 are showing an average guess of 297 MBU compared to the 225 MBU current old crop estimate. The average guess for planted area for corn is 90.9 mln acres, against last year’s 88.6 mln, and the average guess for production is 14.888 BBU vs. 13.730 BBU old crop. Ending stocks for 23/24 expected to be 1.761 BBU vs. the current 1.267 BBU old crop estimate. The average guess for planted area for wheat is 48.5 mln acres, against last year’s 45.7 mln, and the average guess for production is 1.882 BBU vs. 1.650 BBU old crop. Ending stocks for 23/24 expected to be 646 MBU compared to the current 568 MBU old crop estimate.
Other news this week…March grain option expiration Friday and first notice day for futures on Monday, Ukraine Grain Corridor extension negotiations begin as Ukraine requesting a 1 year extension, additional ports to use and more inspectors as exports are still backlogged, and of course South American weather with the markets still assessing the frost damage in Argentina, unexpected showers overnight in northeast Argentina, forecast still showing below normal precipitation over the next couple weeks.
Rain expected for the U.S. Southern Plains over the next few days with winter weather for the Northern Plains into the Great Lakes. The 6–10-day outlook showing above normal temps for the South and East and below normal out West with above normal precipitation across the country except for a sliver of below normal moisture for the Gulf States.
March corn still rangebound but showing a higher trend over the past couple months with nearby support around $6.70 and resistance at $6.89. March soybeans holding the long-term higher trend with a new recent high last week $15.55 ½, overnight high up to $15.54, the contract high from June is at $15.72 ¼ and support at $15.20. March KC wheat now holding a month long higher trend with a new recent high last week at $9.21 ½, resistance next at $9.29 and support at $8.77. March Chicago wheat still rangebound this year with resistance around the $8 level, breaking nearby support overnight, with the next the recent low down at $7.12 ½. March MPLS wheat trading sideways the past couple months with support at $9.10 and resistance at $9.40. March soybean meal hit a new contract high last week at $508.20, the spot high from August the next upside target at $531.20 and support down at $488.
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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