Meat complex trade closed the session quietly higher across most contract months yesterday. In the case of the live and feeder cattle markets though, the range of trade from high to low was moderately active. Front month October live cattle that’s now past the first notice day for deliveries, finished $3.17 above last week’s Southern Plains negotiated cash trade and $2.17 above the top in Nebraska. Basis flipped to negative the 2nd week after the August live contract went off the board and it’s been stuck there since. The actual cash averages from last week on steers was $110.99 in Kansas, $111 in Texas and $111.17 in Nebraska.
Joplin’s sale yesterday had a run that was just under 600 head shy of the same week a year ago. Weaned calves sold steady to $5 higher, bawlers steady to $5 lower and yearlings were steady to firm. Oklahoma City’s run was 300 head bigger than last year with prices on feeders $3-$5 lower, calves $6-$8 lower with instances $10 lower on unweaned calves. Hot one day and cold the next and rain mixed in throughout has a lot of folks gun shy on the unweaned variety with good reason, since it’s officially national dead calf month right now.
Looking at the technical analysis picture in the cattle complex, there were quite a few contract months making new life of contract highs last week, but the follow through wasn’t very good at all and the market is now $1-$2 back off those highs. Deferred live cattle months hit new contract highs as well, but then followed it up with the same action as the feeders, setting back a couple dollars. Trends across the board are still solidly friendly, despite the unwillingness to push actively higher over the last five trading sessions.
Cattle slg.___114,000 -5k wa -1k ya
Choice Cutout__203.21 -.04
Select Cutout___191.81 +.07
Feeder Index:___158.15 -.03
Lean Index.__ 69.36 +.05
Pork cutout___78.93 -.63
IA-S.MN direct avg__63.19 -1.08
Hog slg.___ 473,000 +17k wa +16k ya
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Moving on to the grain and oilseed trade, soybeans managed to squeak out a higher close yesterday, but corn and wheat didn’t join the party. KC and Chicago wheat closed more than a nickel lower, but everything else just had very mild net changes at the finish. With the government holiday on Monday, all the normal, weekly reports are delayed by a day this week. That meant no export inspections data or crop progress and condition data. Those number will all be released today.
Tough day for no news flow really, considering a HUGE chunk of farmers across the Plains and Corn Belt had harvest come to a grinding halt from rain that kind of seems to be never ending at the moment. In fact, looking at the radar at 8:00 this morning, it looked like about 80%-90% of the state of Kansas was getting moisture all at once. There’s some BIG totals accumulating in quite a few areas and some concern noted yesterday about replant on some wheat. I guarantee you for fall planting conditions and emergence, I’ll take too wet over too dry 100% of the time. Given the moisture recharge now, we should put this wheat crop to bed this winter in phenomenal shape, provided it all gets planted fairly soon. That’s inclusive across almost the entire HRW wheat belt.
Fund activity yesterday reported as buyers of 3k beans and sellers of 7k corn and 6k wheat.
8am daily export reporting showed a flash sale of 120k mt’s of HRS wheat to Bangladesh.
6-10’s last night showed below normal temperatures across the entire Plains and Corn Belt. Precip was below normal from central Kansas and Missouri to the north through all of the Dakota’s and the entire Corn Belt. Oklahoma, Arkansas and all of Texas was above normal on precip. Good forecast for drying things out in the Corn Belt, but it would be better if it was a warmer forecast. There’s a LOT of standing water and mud across the country that’s going to make it tough to get the combines in the field.
The next supply and demand and crop production numbers are set to be released on Thursday morning at 11am. For this report, they take the quarterly stocks numbers for corn and beans from the report that came out at the end of September and use those for old crop ending stocks in those two markets. Ending stocks, also known as carryout, also becomes carryin for this current marketing year. That means the September USDA old crop corn carryout of 2.002 bln goes up to 2.140 bln and Sept bean carryout of 395 mln goes up to 438 mln. On the yield side, FC Stone was out last week with their estimates. They pegged US corn yield at 182.7 bu/ac. That’s up 1.4 bu/ac from USDA’s yield estimate last month. Their bean yield is 54 bu/ac and that’s up 1.2 from USDA’s September yield forecast. Informa came out with their numbers later in the week as well and pegged corn at 182.1, up .8 bu/ac from USDA and their bean number was 53 bu/ac, which would be up .2. I haven’t found a full run of other analyst estimates yet, I’m sure we’ll be getting those coming across the news wires later today or tomorrow.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com