Date: October 3, 2023
Livestock futures were mixed yesterday with both live and feeder cattle holding gains but lean hogs still under pressure. It certainly seems that the pressure last week on cattle was mostly due to the looming government shutdown and avoiding that took the lid off. The corn rally yesterday though capped some of the gains as cattle futures did come off their highs as the trading day progressed. USDA confirmed 65,543 head of negotiated cash and 44,329 head of negotiated grid cattle selling nationwide last week in a range of $174-$190 live and $288-$295 dressed. Packers were able to hold prices steady while also slowing down the chains last week, a win in their eyes. The dip in futures though seems like a win for feedlots to be able to sell steady fed cattle last week as well, at least in the South. Packers are also able to pull from October contracts this week. Holding steady again this week should be seen as a win again.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 10/2/2023 – Final
This Week: 5,192 Last Week: 6,587 Last Year: 5,314
Compared to last week feeder steers under 750 lbs. sold 6.00-9.00 lower with heavier weights steady to 2.00 lower. Feeder heifers sold 6.00- 10.00 lower. Supply and demand was moderate. 7 weight index steers averaged $256-$257 and 8 weights averaged $238-$248.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 10/2/2023 – Prelim
This Week: 6,500 Last Week: 8,296 Last Year: 8,346
Compared to last week: Feeder steers 2.00-5.00 lower. Feeder heifers 3.00-6.00 lower. Demand moderate to good for feeder cattle but quality plain to mostly average. Steer and heifer calves steady to 5.00 higher. Demand good for calves. Weather remains warm for October, however cool front with rain is expected midweek. 7 weight index steers averaged $250-$255 and 8 weights averaged $243-$245.
Sioux Falls Regional Cattle Auction – Worthing, SD
Livestock Weighted Average Report for 10/2/2023 – Final
This Week: 4,203 Last Week: 1,175 Last Year: 2,845
Compared to last week: Steer and heifer calves too lightly tested for good comparison, yearling feeder steers not well tested last week to offer a comparison, lower undertone evident. Yearling heifers unevenly steady. Moderate to good demand for this limited offering of spring born calves, lighter farmer feeder buyer attendance as they are busy with harvest. 8 weight index steers averaged $240-$247.
Cattle slaughter on Monday estimated at 125,000 head, down 2,000 from last week and down 3,000 from last year. Hog slaughter on Monday estimated at 486,000 head, up 17,000 compared to a week ago and up 20,000 compared to a year ago.
Boxed beef cutout values on Monday higher on moderate demand with 105 loads sold.
Choice Cutout +2.30 @ 303.08, Select Cutout +.94 @ 276.98
CME Feeder Cattle Index @ 252.21, Lean Hog Index @ 84.84
Pork Carcass Cutout -1.19 @ 96.04
October live cattle hit a new contract and all-time spot high last Thursday at $187.57 with support at $184. There is still some downside risk though if cash is lower with downside price targets for Octoer at $182 and December at $186. October feeders hit a new contract high back on September 15th at $264.67 with nearby support at $251.62 then at $250. October lean hogs now trading below all major moving averages with support next around $78, the August low at $77.75 and resistance at $82.60 then around $86.
Grains rebounded yesterday led by the Chicago wheat and corn. Soybeans struggled all day but were able to finish with small gains. USDA demand reports for August were released with total corn consumed for alcohol and other uses at 490 MBU. This is down 3% from July 2023 but up 1% from August 2022. Corn used for ethanol accounted for 443 MBU, also down 3% from July but up 3% from last August. Soybeans crushed for crude oil was 169 MBU, below the average trade estimate of 171.6 MBU, down from 184.8 MBU in July and 175.1 MBU crushed in August 2022. Census crush for the 2022/23 marketing year totaled 2.211 BBU vs. the USDA estimate of 2.220 BBU which accounts for half of the increase to old crop ending stocks.
Weekly Export Inspections for the week ending September 28th were again below the average needed per week for all except wheat. Wheat inspections totaled 14.6 MBU vs. the average needed at 13.3 MBU. YTD is down 90.2 MBU from last year vs. the export estimate only down 59 MBU year over year. Corn inspections totaled 24.6 MBU with the average needed per week at 40.5 MBU. Soybeans inspected for export totaled 24.4 MBU with the average needed per week at 36.5 MBU. Grain sorghum inspections totaled 2.4 MBU with the average needed per week at 5.1 MBU. One month into the marketing year for the fall crops and all three are ahead of last year’s pace. China was the #1 destination for soybeans and grain sorghum, Mexico the #1 destination again for corn and 70% of the wheat shipped went either to Mexico or SE Asia.
After the close, USDA released its weekly Crop Progress. Corn harvest nationwide up 8% to now 23% complete compared to 19% last year and 21% for the 5-year average. Soybeans harvest advanced 11% to also 23% complete nationwide compared to 20% last year and 22% average. Soybeans conditions also improved 2 points while corn conditions remained the same. Winter wheat planted was in line with expectations at 40%, an advance of 14%, and emergence now at 15% nationwide.
Grains were mixed overnight with Chicago wheat again the leader higher and soybeans the leader lower. Corn finished the overnight 1 lower, soybeans 6 to 9 lower and wheat 1 to 8 higher. Outside markets have equities lower, US$ higher and energies mixed with crude oil up $.50/barrel but gas and heating oil down $.02 to $.04/gallon. USDA announced a private sale this morning of 265,000 MT or 9.7 MBU of soybeans for delivery to China and 220,000 MT or 8.1 MBU of SRW for delivery to China.
Potentially heavy rains still in the forecast over the next couple days across parts of the Southern Plains with light and scattered rains potentially for the Corn Belt. The 6-10 day outlook still showing above normal temps for the western half of the U.S. and below normal temps for the eastern half with only small pockets of above normal moisture in the PNW, Southeast and New England and below normal precipitation from the Central Plains through the Corn Belt to the East Coast.
December corn still holding the short-term higher trend with support at $4.75 ½ and nearby resistance at $4.90. November soybeans again hitting a new recent low overnight at $12.63 ¼ with support next at $12.56 ¾ and resistance at $13.22. December Chicago wheat hit a new contract low on Friday at $5.40 with resistance at $5.96. December KC wheat a new recent low on Friday at $6.62 with resistance around $7.20. December MPLS wheat hit a new contract low yesterday at $7.07 ½ with resistance around $7.90. October soybean meal gapping lower overnight, down to a new low for the year at $360, support next at $353.8 and resistance at $398.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
785-537-3336
IMPORTANT—PLEASE NOTE
This does constitute a solicitation to buy or sell commodities futures and/or options. The information contained herein is provided for informational purposes only. The information is not guaranteed as to its accuracy or completeness, although the information was taken from sources we believe to be reliable. The market recommendations of Loewen and Associates, Inc. are based solely on the judgment of Loewen and Associates, Inc. personnel. We do not guarantee or warranty, either expressed or implied, of success to you in the use of this information. Loewen and Associates, Inc. disclaims responsibility for or loss associated with use of information from our commentary, analysis or recommendations. There is risk of loss in trading commodity futures and options. The risk in trading can be substantial; therefore only genuine “risk” funds should be used.