There was very little reaction in yesterday’s trade to the COF numbers from Friday. Then again, there probably wasn’t much reaction needed either. Those On Feed numbers were mildly bearish versus the pre-report expectations, but big picture it was still friendly. On a daily basis, we marketed about 5.5% more cattle last month than last year, the total inventory at the bunkline is 1% less, but placements last month were up 2%. That higher placement total, albeit just 42,000 head larger than last year was the first increase compared to last year in feedlot placement activity since April. That factor coupled with a pretty good pace on marketings took the On Feed supply below 2018 levels in September finally and kept it below in this month’s numbers as well. Jan-Aug numbers were all higher.
Considering cash was up $2 last week and the futures were consistently higher, a lot of friendliness had already been baked into the market. The open yesterday was quiet, but the close was solid green across the live cattle, mixed in feeders and the lean hogs were mostly higher, but it was all just mildly higher for the pigs.
The close yesterday brought October live cattle to within $2.97 of where October futures expired on the last day of the month last year. It was also a new recent high on the charts and a price level that hasn’t traded since back in April. Front month feeders were still $1-$2 away from new recent highs, yet everything in the cattle complex looks very solidly friendly on the technical picture of the charts.
Cattle slg.__118,000 unch wa unch ya
Choice Cutout__227.90 +2.46
Select Cutout__200.76 +.92
Feeder Index:___144.35 -.41
Lean Index.__64.12 -.97
Pork cutout___52.58 -.95
IA-S.MN direct avg_51.30 -1.10
Hog slg.__ 491,000 +3k wa +21k ya
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In the grain and oilseed trade, it was a disappointing finish yesterday in everything except soybeans and they managed to squeak out a higher close. Corn and wheat contracts were all lower. US/China trade talk news was kind of stagnant. There were no daily export sales in the 8am announcements and funds were on the sell side in corn and wheat. That fund activity was estimated at buyers of 2k beans, and sellers of 5k wheat and 7500 corn.
Weekly export inspections data was solidly bullish for soybeans, friendly in wheat and terrible for corn. Soybean inspections came in at 57.6 mln bushels which is well over the 33.2 mln needed each week to stay on pace to hit USDA’s export target for the marketing year. Corn on the other hand was only 15 mln bushels compared to 39.6 mln needed every week. Wheat shipments were 19.2 mln which topped the 17.8 mln needed each week to hit its export target. The top shipment destinations in each were Ethiopia and Japan for wheat, Mexico and Saudi Arabia for corn and China and Mexico in soybeans. Sudan took most of the milo shipped last week and there were 2.1 mln in milo inspections total versus a 2 mln pace needed.
Crop progress and condition data yesterday afternoon showed 93% of the nation’s corn crop mature versus 99% as the 5 year average. 26% of the Wisconsin crop still isn’t mature, 23% of North Dakota, 12% of South Dakota, 4% of Minnesota and 18% of Ohio, along with 6-7% to go yet in Illinois and Indiana. 41% of the crop is harvested and that’s 20% behind the normal pace. The big standouts there was North Dakota at 6%, which was only a 2% weekly gain. South Dakota was 14%, which is 5 more than the previous week. Those two states are normally north of 40% complete. Of the big 4 corn producers, Nebraska is only 6% behind their normal pace, but the other three are anywhere from 25%-34% behind normal. That, coupled with a slow soybean harvest pace that’s 16% behind normal is going to continue making it increasingly difficult for USDA to get accurate data for these production estimates in coming crop reports. Odds are there will be corn still standing in the field in some of these northern states when the January final numbers come out.
Winter wheat seeding was reported at 85% done and that’s 3 points ahead of normal. Emergence is 63% compared to a 5 year average of 64%. The first condition ratings came out for the year yesterday and that showed 56% g/ex ratings nationwide compared to 53% g/ex last year.
6-10 day weather forecasts showed below normal temps across all of the Plains and Corn Belt and it was bordering on much below normal for the Central and Eastern Corn Belt. Precip was above normal for the Dakotas and Minnesota, along with the northern 2/3 of Wisconsin. Everywhere south of that was below normal.
8am daily export reporting showed no new sales.
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Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com