Date: February 5, 2024
Livestock futures last Friday finished mixed on fairly quiet trading but week over week gains were locked in earlier from the friendly Cattle Inventory report. Live cattle and feeders continue to make new recent highs led by feeders as most contracts now eclipsing the 62% retracement levels from the sharp losses earlier this fall. Cash fed cattle trade last week was $2 to $3 higher than the week previous with trade in TX and KS done at $178 to $179 live and trade in the North from $176 to $179 live and $280 dressed. The CFTC Commitment of Traders report for the week ending January 30th showed funds buying 12,644 live cattle contracts and net long 30,016 contracts while buying 2,644 feeder contracts and increasing their net-long positions to now 4,205 contracts.
Weekly closes for livestock futures and meats…February Live Cattle +$2.10, April +$2.07, March Feeder Cattle +$5.10, April +$4.60, February Lean Hogs +$.52, April +$.57. Choice Boxed Beef -$7.45 at $293.08 and Pork Carcass Cutout -$1.11 at $88.40.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 1/28/2024 – 2/3/2024
Current Week: 35,349 Last Week: 15,535 Last Year: 6,693
Compared to last week: Feeder steers 5.00-15.00 higher, most advance under 800 lbs. Feeder heifers 2.00-8.00 higher. Steer calves 15.00- 25.00 higher. Heifer calves 10.00-20.00 higher. Demand extremely good for all classes with very active trade. Cattle futures traded strong this week as Cattle inventory came in as expected with fewer cow numbers and the beginning of heifer retention. This all leading to fewer numbers and thus more demand.
Cattle slaughter last week estimated at 637,000 head, up 19,000 from the week previous and matching last year but year to date still down 6.8% vs. last year. Beef production estimated at 536.8 million pounds last week with year to date down 4.8% from last year.
Hog slaughter last week estimated at 2,692,000 head, up 3,000 compared to the week previous and up 102,000 compared to a year ago with year to date now only down 1.4% vs. last year. Pork production estimated at 586.8 million pounds with year to date down 1.0% from last year.
Boxed beef cutout values on Friday lower on Choice but higher on Select on moderate to good demand with 147 loads sold.
Choice -1.86 @ 293.08, Select +.22 @ 283.47
CME Feeder Cattle Index 239.17
CME Lean Hog Index 73.12
Pork Carcass Cutout 88.40 -.19
February live cattle up to a new recent high on Friday at $181.02 and taking out the 50% retracement level last week. Resistance next at $183.60 with support at $177. March feeders up to a new recent high on Friday as well at $246.12 with resistance next at $247.50 and support at $238. February lean hogs still holding the long-term lower trend. That trendline was tested last week with a new recent high at $76.67 with nearby support around $73.
Grains were mixed on Friday led lower by soybeans while corn and wheat continue to chop sideways. South American weather still the main driver as Brazil weather has improved but Argentina has been through a couple recent hot and dry spells. Brazil soybean harvest running 5-10% ahead of last year now in the teens while lower yields continue to be reported. Brazil’s CONAB and USDA will update supply and demand estimates later this week providing a fresh look at the fundamentals for the markets to digest. The CFTC Commitment of Traders report showed managed fund money through the trade week ending 1/30 selling 14.8k corn contracts (net short 280.1k, the largest net short since June 2020), selling 277 Chicago wheat contracts (net short 64.8k), buying 4.9k KC Wheat contracts (net short 33.3k) and selling 16.4k soybean contracts (net short 108.2k).
Weekly closes in the grains…March Corn -$.03 ½, New Crop December +$.00 ½, March Soybeans -$.20 ¾, New Crop November -$.14, March Chicago Wheat -$.00 ½, New Crop July -$.03 ¼, March KC Wheat +$.00 ¼, July -$.06 ¾, March MPLS Wheat -$.03 ¾, March Soybean Meal +$7.8/T.
Grains traded both sides of unchanged overnight but ultimately new lows again for soybeans pulling everything lower. Corn finished the overnight steady to 2 lower, soybeans 4 to 6 lower and wheat 5 to 8 lower. Outside markets have equities lower, US$ higher, and energies steady to lower with crude oil down $.20/barrel. USDA announced a private sale of 155,000 MT or 6.1 MBU of corn for delivery to Mexico.
The US$ now into new 3-month highs which hampers U.S. exports while grain prices have fallen over these past few months to try and stimulate more export demand. Russian wheat prices falling last week another $7/MT to $228/MT FOB or $6.21/BU. This compares to U.S. Gulf HRW 12.5 pro at $290/MT or $7.89/BU as of Friday.
U.S. weather overall mild across the country, heavy rains continue in CA. The 6-10 day outlook has above normal temps and above normal precip for the eastern half of the U.S. and below normal temps and precip in the Southwest. South American weather forecasts looking for rain in Argentina later this week and into the weekend. The 6-10 day outlook calling for normal precip and temps for most of the Brazilian grain areas and below normal precip with above normal temps for the Argentine grain areas.
March corn down to a new contract low last week at $4.36 ½ with resistance at $4.48 then $4.53. March soybeans down to a new recent low overnight at $11.81 ¼ with support at $11.75 and resistance at $12.23. March Chicago wheat chopping sideways the past couple months with support at $5.73 and resistance at $6.17. March KC wheat down to a new contract low on January 18th at $5.86 ¾ with resistance around $6.40. March MPLS wheat down to a new contract low on the 18th as well at $6.78 ¾ with resistance at $7.11. March meal down to a new recent low last week at $346.2 with resistance around $370.
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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