Date: December 13, 2023
Cattle futures continued higher on Tuesday as lean hogs finished mixed. This is the third consecutive higher close for both fats and feeders, yet I would still be reluctant to call the bottom in just yet. Charts are looking a little better and bottoms are typically rounded unlike highs which typically are spikes. Both fats and feeders still need to add another $4 to $5 and break nearby resistance levels to get me excited on a new rally beginning. Deferred contracts led the way higher yesterday. Fundamentals sure didn’t call for this 4-month sharp price drop and overall it’s too early to see much inventory building just yet. Only very light volume cash fed cattle reported so far this week in the North at $168 live which was the bottom end of last week’s range.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 12/11/2023 – Final
This Week: 8,693 Last Week: 8,473 Last Year: 7,306
Compared to last week feeder steers under 650 lbs. sold 4.00-6.00 higher with heavier weights selling 2.00-4.00 lower. Feeder heifers sold steady to 3.00 higher. Supply was heavy with good demand. 7 weight index steers averaged $217 and 8 weights averaged $210 to $214.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 12/11/2023 – Final
This Week: 8,383 Last Week: 12,330 Last Year: 10,590
Compared to last week: Feeder steers are selling 1.00-3.00 higher. Feeder heifers traded fully steady. Steer and heifer calves under 450 lbs trading 2.00-4.00 higher over 450 lbs 3.00-6.00 lower. Demand moderate. 7 weight index steers averaged $218 to $229 and 8 weights averaged $213 to $218.
Sioux Falls Regional Cattle Auction – Worthing, SD
Livestock Weighted Average Report for 12/11/2023 – Final
This Week: 5,797 Last Week: 4,422 Last Year: 3,571
Compared to the sale last week: After a rise in the cattle futures a decline is back today, making the market very uneven. Light steers, 500 lbs were substantially higher. Steers 550-600 lbs 8.00-9.00 lower. Steers 650-700 lbs 10.00-13.00 higher. Yearling steers 800-950 lbs 2.00-7.00 lower. Light heifers, 450-550 lbs were 11.00-16.00 higher. Heifers, 600-800 lbs mostly steady to 2.00 higher. Yearling heifers 850-950 lbs 7.00-9.00 lower. Big sale today and large crowd. Demand was good, especially on calves and load lots of calves and yearlings. 7 weight index steers averaged $240 to $243 and 8 weights averaged $206 to $212.
Cattle slaughter on Tuesday estimated at 127,000 head, up 1,000 from last week and up 6,000 from last year. Hog slaughter on Tuesday estimated at 479,000 head, down 9,000 compared to a week ago but matching a year ago.
Boxed beef cutout values on Tuesday higher on Choice but lower on Select on moderate to good demand with 129 loads sold.
Choice Cutout +2.35 @ 292.78, Select Cutout -.88 @ 258.66
CME Feeder Cattle Index @ 216.05, Lean Hog Index @ 67.70
Pork Carcass Cutout -2.66 @ 83.96
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 then at $172.65. January feeders hit a new contract low last Monday at $209.15 and back to test to long term lower trend this week with resistance at $220.45 then $223.57. December lean hogs will expire tomorrow somewhere between $67.25 and $68.75. The February contract holding a lower trend since March with the contract low hit on November 28th at $65.80 and resistance at $72.00.
Grains experienced a turnaround Tuesday with wheat the leader higher and soybeans the leader lower. Beans were higher in the overnight but a quick reversal lower and a portion of Monday’s strong gains were given back. Brazil’s weather concerns somewhat stabilized, it looks to still be hot and dry this week but better rain chances for next week in the central areas while southern Brazil and Argentina weather remains favorable. Wheat futures bounced off nearby support levels to gain back most of Monday’s losses. Corn still stuck in the between the two but did hold small gains on Tuesday as news and volume remains light in the already pre-holiday trading.
Grains trading lower overnight, all staying within past few days trading ranges. Corn finished 2 to 4 lower, soybeans 8 to 9 lower and wheat 8 to 11 lower. Outside markets have equities higher, US$ steady and energies mixed with crude oil up $.20/barrel. USDA reported another private sale this morning. This time it is 125,000 MT or 4.6 MBU of new crop soybeans for delivery to unknown destinations.
New policies coming from Argentina with the recent new presidential election and a more than expected peso devaluation announced. Exports were recently halted and now it appears the government will increase the export tax from 12% to 15% on corn and wheat but may cut if not completely get rid of the export tax on soybeans. Last year’s drought cut corn and soybean production in half and inflation continues to run now reported in the triple digits. This overrides the bullish news with Brazil’s weather forecast now getting drier into next week.
Heavy rains still in the forecast until mid-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 Southeast and normal to above normal precip on both coasts.
March corn contract low on November 29th at $4.70 ½ as the soon to expire 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. 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 $6.30. 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 so far this morning at $400.1 and support next down around $382.
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