Date: September 6, 2023
All Ag futures mixed on Tuesday on fairly tight trading ranges coming off the 3-day holiday weekend. Cattle futures spent most of the day in the red while lean hogs held small gains. Very light volume cash feedlot trade yesterday in the North at $183 live and $288 dressed. This is steady to $2 lower vs. last week but I wouldn’t expect volume to pick up until later this week. The markets will be keeping an eye on retail clearance after the holiday and beef prices this week as prices typically start trending lower. Choice boxed beef up another $1 yesterday on moderate demand. Pork prices higher as well which supported the futures.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 9/5/2023 – Final
This Week: 2,392 Last Week: 3,039 Last Year: 1,748
Compared to last week, steer and heifer calves sold 2.00-4.00 lower. Yearling steers were 4.00 lower while yearling heifers were not well tested. Demand was moderate on a moderate supply.
Cattle slaughter on Tuesday estimated at 128,000 head, up 3,000 from last week and up 1,000 from last year. Hog slaughter on Tuesday estimated at 482,000 head, up 6,000 compared to a week ago but down 5,000 compared to a year ago.
Boxed beef cutout values on Tuesday higher on Choice but lower on Select on moderate demand with 109 loads sold.
Choice Cutout +.99 @ 315.48, Select Cutout -.75 @ 289.54
CME Feeder Cattle Index @ 247.81, Lean Hog Index @ 86.56
Pork Carcass Cutout +5.17 @ 98.87
October live cattle rangebound trading the past couple months from $177.62 to $183.72 with the contract high from July 20th at $185.75. The 10, 20 and 50-day moving averages all converging yesterday from $180.20 to $180.32. September feeders holding a higher trend since the contract began trading last year. A new contract high was hit last week at $255.22 with nearby support at $250 then $248.10. October lean hogs back above all major moving averages with nearby support at $81 then the August low at $77.75 and resistance at the August high at $86.75.
Grains were mixed, corn fairing the best and still holding support levels. Soybeans now a week-long lower trend after rallying higher for the majority of August. Wheat futures hit new recent or contract lows yet again yesterday. The US$ was sharply higher and testing highs from earlier this summer. Wheat sales and shipments continue to be below average with weekly inspections at 11 MBU vs. the average needed per week at 13.5 MBU.
Export inspections to wrap up the marketing year were enough the past couple weeks, with the monthly Census adjustments, to meet if not exceed the current export estimates by USDA for corn, soybean and grain sorghum. Corn inspections for the week ending August 31st totaled 18.9 MBU. YTD inspections at 1.467 BBU, with Census adjustments through June at 1.626 BBU and the USDA export estimate at 1.625 BBU. Soybean inspections totaled 13.9 MBU with year to date at 1.920 BBU, census adjusted to 1.989 BBU and the USDA estimate at 1.980 BBU. Grain sorghum inspections continue to be impressive the past few weeks with another 4.2 MBU shipped out last week. YTD inspections now at 106.3 MBU and up to 110.5 MBU with the Census adjustments compared to USDA’s 100 MBU current estimate.
USDA released Crop Progress and Conditions after the close yesterday. Corn and soybean conditions both came down more than expected. Good to excellent rated corn nationwide fell 3% to now 53% and poor to very poor corn up 1% to 18%. This compares to 54% G/E and 18% P/VP last year but some massive differences state by state. The two largest producing states, IA and IL, are down 17% and 14% respectively vs. a year ago and the #4 corn producing state of MN is down 23% from last year. MI, MO and WI also down double digits. The states that have considerably higher conditions this year (22% to 46%) are CO, KY, NC, PA, TN, TX and OH which is the only state in the top ten for production. Some of the drop in conditions could certainly be the flash drying currently going in especially in the WCB with 18% nationally now mature. USDA did not report a national percent harvested yet but TX is 56% complete, OK 15%, KS 6% and MO 2%.
Soybean G/E ratings down 5% to 53% and P/VP up 3% to 17% nationwide. This compares to 57% G/E and 14% P/VP last year and similar to the corn with state by state differences. The ECB and Southeast states G/E are 8% to 20% better than a year ago but WI is down 23% from last year, MI down 20%, MN and IA both down 17% and IL down 9%. Soybeans dropping leaves nationwide at 16%. Grain sorghum harvest up 2% to 19% nationwide with TX 2/3 done and KS just getting started. Spring wheat harvest jumped 20 points to now 74% complete. Winter wheat planting reported for the first time nationally at 1% compared to 3% last year and for the 5-year average.
Soybeans led the grains higher overnight finishing 9 to 12 higher. Corn traded both sides of unchanged and finished 1 to 3 higher while wheat markets were able to hold off making new lows overnight and finished 2 to 7 higher. Outside markets have equities, US$ and energies all lower with crude down $.20/barrel.
Brazil’s CONAB updated production estimates this morning leaving 2022/23 soybean production unchanged at 154.6 MMT but did increase their corn production estimate by 1.9 MMT to a new record 131.8 MMT. USDA last month estimated Brazil’s soybean production at 156 MMT and corn production at 135 MMT.
Temps certainly improved here locally overnight and look non-threatening from here into the Corn Belt but still going to deal with some triple digits in OK and TX. Rains in the forecast over this next week though across the Southern Plains. The 6-10 day outlook showing above normal temps for the western third of the U.S. and in the South and below normal temps around the Great Lakes and ECB and now extended down into OK with below normal moisture now only in the PNW and a small pocket centered on MN with above normal moisture centered on the Central Plains.
December corn holding the support so far with the August low down at $4.73 ½ and resistance at $5.07 ½. November soybeans down to a new recent low yesterday at $13.58 with support at $13.32 and last week’s high now resistance at $14.09 ½. December KC wheat hit a new low for the year yesterday at $7.13 ¾ with resistance at $7.49. December Chicago wheat down to a new contract low yesterday at $5.92 ¼ with resistance at $6.43. December MPLS wheat also a new contract low yesterday at $7.56 ¾ with resistance at $8.20. October soybean meal has support at $392 with resistance at $423.
Loewen and Associates, Inc.
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