Date: December 11, 2023
Livestock futures opened Friday morning steady to $1 higher. Fats and feeders tested support levels but directly after the December USDA S&D reports, grains flashed lower and buying interest began for both cattle and lean hog futures. The buying momentum held into the close with fats finishing $2 to $3+ higher, feeders $4 to $5 higher and lean hogs $.80 to $1.50 higher. This was the first higher week over week close for the nearby feeder contract in over a month and only the third higher weekly close since mid-September. Now the charts/technicals are not fixed yet, but hopefully this late week rally can spill into buying enthusiasm early this week.
The report did not have many major changes for the meats. Beef production left unchanged for this year with 180 mil pound increase for 2024. The increased feeder cattle placement numbers over the past two months has increased the focus of beef production gains. Pork production this year increased by 25 mil pounds, imports up 35 mil and exports up 15 mil pounds. For 2024, no increase in pork production vs. a month ago but imports up 40 mil pounds and exports slashed by 100 mil pounds. Total poultry production increased for 2023 by 136 mil pounds, imports up 1 mil and exports up 44 mil pounds. For 2024 production reduced by 110 mil pounds, imports up 8 and exports down 10 mil pounds.
Negotiated cash fed cattle trade last week ranged from $169 to $171 live and $267 to $271 dressed, $3 to $5 lower than the week previous. This was spread out throughout the week with overall lower volume than expected. By midday Friday, asking prices were still sitting at $172 live and $272 dressed.
Weekly closes for livestock futures and meats…December Live Cattle -$3.82, February -$3.40, January Feeder Cattle +$.87, March -$1.15, December Lean Hogs -$.17, February -$1.12, Choice Boxed Beef -$9.45 at $288.01 and Pork Carcass Cutout +$2.12 at $85.67
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 12/3/2023 – 12/9/2023
Receipts: Current Week 36,007 Last Week: 26,907 Last Year: 44,465
Compared to last week: Feeder steers and heifers early in the week sold 1.00-3.00 lower, mid and late week yearlings traded 6.00-12.00 lower. Steer and heifer calves sold 4.00-10.00 lower. Demand light to moderate.
Cattle slaughter last week estimated at 635,000 head, matching the week previous but down 13,000 from last year. Beef production last week estimated at 532.5 million pounds with year to date -5.2% vs. last year and year to date slaughter -4.7%.
Hog slaughter last week estimated at 2,687,000 head, down 8,000 compared to the week previous but up 108,000 compared to a year ago. Pork production last week estimated at 575.8 million pounds with year to date +0.5% vs. last year and year to date slaughter +1.6%.
Boxed beef cutout values on Friday lower on good demand with 167 loads sold.
Choice Cutout -1.83 @ 288.01, Select Cutout -.93 @ 257.90
CME Feeder Cattle Index @ 220.04, Lean Hog Index @ 68.76
Pork Carcass Cutout +2.30 @ 85.67
December live cattle down to a new low for the year last Thursday at $162.20 with support next at $161.20 then the contract low at $153.32 and nearby resistance at $169.50. January feeders hit a new contract low last Monday at $209.15, which has held so far, with resistance at $217.40 then $223.57. December lean hogs holding a lower trend and set to expire later this week with support at $66.72 and resistance at $69.40. The February contract also holding a lower trend with the contract low hit on November 28th at $65.80 and resistance at $72.00.
Over in the grains it was all about the USDA crop reports yet the significant impacts came from the world balance sheet more than anything on the domestic side. USDA did increase both wheat and corn exports by 25 MBU which dropped ending stocks for each by the same amount. There were no changes to the U.S. soybean balance sheet though and most were hoping for a slight reduction. Overall though, these were friendly adjustments. On the world front, the average pre report trade estimates were looking for cuts to South American production estimates and 1 to 2 MMT lower ending stocks for both corn and beans. Instead, the only cut was new crop soybeans in Brazil by 2 MMT which was offset but USDA increasing the old crop production by the same amount. Brazil’s wheat crop was reduced by 1 MMT as well but Australia, one of biggest competitor for the SE Asian markets was increased and Argentina left unchanged. These are the two next crops coming to the world markets.
Wheat gains were made earlier in the week, enough so to hold week over week gains while corn was in essence steady for the week and soybeans the leader lower. China purchased a total of 41 MBU of SRW last week and over 64 MBU since the end of August. South American weather should still be the driving force this week along with U.S. export sales that have ramped up recently providing support. The 6-10 day outlook on Friday afternoon was calling for normal precipitation for the Brazilian grain areas with above normal temperatures and below normal precipitation for the Argentine grain areas with normal temperatures.
Weekly closes in the grains…March Corn +$.00 ¾, May +$.00 ¾, January Soybeans -$.21, March -$.22 ½, March Chicago Wheat +$.29, May +$.23 ½, March KC Wheat +$.14 ¼, May +$.15, March MPLS Wheat -$.00 ¾, May -$.02, January Soybean Meal -$8/T, March -$8.8/T.
Grains were mixed overnight with soybeans the leader higher, corn trading both sides of unchanged and wheat lower. Brazil’s weekend rainfall was a bit disappointing with the forecasts only calling for sporadic rains for the dry central areas. China stats bureau reported a record corn crop this year of 288.84 MMT, up 4% from a year ago, as USDA left their estimate unchanged on Friday at 277 MMT. Corn finished the overnight steady to 1 lower, soybeans 9 to 13 higher and wheat 4 to 8 lower. Outside markets have equities and US$ higher and energies steady. Reports that China is still buying U.S. soybeans for February through March overnight yet some trying to say they are full now for the 1st quarter of 2024. USDA reported a private export sale this morning of 132,000 MT or 4.85 MBU of soybeans for delivery to unknown destinations.
Heavy precip over this next week from the Southwest to the Southeast. The 6-10 day outlook showing above normal temps and below normal precipitation across the U.S. with normal to below normal temps only in the South and normal to above normal precip on both coasts.
March corn contract low on November 29th at $4.70 ½ as the now in delivery December corn hit a new 2-year low at $4.47. March tested but could not break through nearby resistance last week with a high at $4.93 ¾. There is strong resistance from there to the $5 level, but a break above could lead to a test of the October high at $5.21 ½. January soybeans down to a new recent low last week at $12.92 with resistance at $13.30 then $13.52. March Chicago wheat hit a new contract low on November 27th at $5.56 ¼, rallied over $.93 for a new recent high last week at $6.49 ½ with nearby support at $6.00 and resistance next at $6.70. March KC wheat a new contract low on November 28th at $5.95, rallied over $.82 to a new recent high last week as well at $6.77 ½ with nearby support at $6.40 and resistance next at $6.99. March MPLS wheat contract low on November 27th at $6.97 ½, only a $.50 rally and nearby resistance around $7.50. January soybean meal sharply lower over the past month after hitting a new contract high on November 15th at $460.6 with a new recent low last week at $402.40.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
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