As if the cattle market didn’t already have enough problems with a long string of daily futures losses and terrible looking chart technicals, apparently the rendering facilities at the JBS Grand Island beef plant caught fire Sunday night and they shut down their kill yesterday as a result. They were calling it a five-alarm fire, but as of late yesterday there were reports saying the fire was contained in an area that shouldn’t affect slaughter or fab, so shifts should resume quickly. Hopefully that’s the case, because it’s a 6000/hd/day plant and that took what might have been a 120k head national federally inspected kill tally from yesterday and made it 114k.
In all honesty, cattle futures didn’t act as terrible as I thought they might given some of the past experience from the Tyson debacle in Finney County a couple years ago. That one crushed the market. This one didn’t end with any live months much over $1 lower. Feeders had several months down over $2, but it certainly could have been worse.
Chart-wise, 13 out of the last 14 days have had lower closes in the front month October live cattle with yesterday’s low being the lowest price traded since June 1st. Front month Sept feeders hit their lowest price level since June 10th and have closed lower 14 out of the last 15 days. The last 12 in a row have been lower closes. To be really blunt, the charts look horrible in cattle, but they also look incredibly oversold and due for a healthy bounce. Let’s hope that happens sooner rather than later, but when you put it all in perspective, the JBS fire yesterday and the increased odds that results in a softer undertone in cash this week as packers use it as leverage makes the whole picture look like a rough ride on the struggle bus.
Cattle slg.__ 114,000 last week was Labor Day -4k ya
Choice Cutout__325.93 -1.29
Select Cutout__292.16 -1.21
Feeder Index:___155.09 +.09
Lean Index.__ 97.40 -.33
Pork cutout___101.12 -3.98
IA-S.MN direct avg__86.99 -1.93
Hog slg.__471,000 holiday last week -16k ya
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Moving on to the grain and oilseed trade, closes yesterday looked pretty quiet with corn and beans mildly lower. The wheat complex was mixed with KC a little higher on the front end, while Chicago and MGEX were a little lower on the front.
Weekly export inspections data was widely expected to be super light in corn and soybeans with a big chunk of those commodities usually loading out of Mississippi River ports that were hit by Hurricane Ida. Corn export loadings totaled 5.4 mln bushels versus a weekly pace needed to hit USDA’s export target of 48.4 mln bushels. Remember, this is the start of a marketing year as well, so plenty of time and also no surprise the numbers were poor yesterday. Soybean export loadings were 3.9 mln bushels. Milo came in at 178k. Wheat was the only bright spot and it came in at 20.1 mln bushels versus a pace needed of 15.8 mln. Great number for wheat! The top destination in everything was Mexico for wheat, corn and milo. China was the top spot for soybeans.
Rumors on lower Mississippi river terminals were that three facilities were operational as of yesterday with a lot more expected by the end of the month. Cargill Reserve is still up in the air and that’s the one that had heavy damage to the facility, so that one is waiting on more than just power service being returned to normal. There’s a lot of work to be done there.
Funds yesterday were on the sell side of 2k wheat, 4k corn and 2k beans.
6-10 day weather forecasts last night showed much above normal temps across the Corn Belt and above normal for all of the Plains states. Precip chances were below normal from the Panhandle up through the western half of Kansas and Nebraska. North and east of those areas had normal to above normal chances of rain.
STATS Canada came out with crop production estimates again this morning and the data was buulllish! All wheat was down over 1.2 mmt’s from last month, coming in at 21.715 mmt’s. Last year they produced 35.183 mmt’s, so that’s a giant drop year over year. Canola production was pegged at 12.782 mmt’s versus 14.749 mmt’s last month and 19.485 last year. That’s a huge year to year drop as well. Corn production was pegged at 14.368 mmt’s which is up from last month’s 13.667 tally. Last year they were 13.563 mmt’s.
8am daily export reporting showed no new business today.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com