Date: November 28
The cattle complex took another big punch to the gut yesterday as Friday’s losses spilled over into Monday. Live cattle were actually mixed on either side of unchanged shortly after yesterday’s opening bell, but just couldn’t make anything happen at higher money. Feeders started with shallow losses that just continued to steepen to the tune of $6+ lower. No big news story to point the finger at other than some harsh technical selling and quite frankly some panicking going on.
Chart technicals look just absolutely terrible in both fats and feeders but definitely worse in feeders with some new contract lows being made. The January contract has made new recent lows, and ugly ones at that, but they have not quite gotten to the point of setting a contract low but are close. However, the March feeder contract and beyond all took out any remaining support that was left and set new contract lows yesterday with nothing but thin air below those markets to catch the falling knife. December live cattle technicals don’t look good by any means but not as bad as feeders. Yesterday closed at $168.77, quickly approaching support from the May lows at $168.02, and next support after that is the March low at $164.82. February took out the May low support on Friday and approached support at the March low of $168.35. The April contract and beyond have taken out those lows after the past two trading sessions.
The Commitment of Traders report showed funds as of November 21st as sellers of 2,721 live cattle contracts, which brings them to a net long position of 35,170 contracts. Also showed funds were sellers of 1,777 feeder cattle contracts which flips them to a net short position of 458 contracts. So technical selling and funds puking are where the finger can be pointed to try to find some sort of reasoning.
Cattle slaughter on Monday came in at__123,000 down 2k from wa and down 4k ya
Choice Cutout__ 297.25 -0.78 compared to last Monday that is up $1.50.
Select Cutout__267.80 -0.96 which is down -3.15 compared to a week ago
CME Feeder Index: on Friday came in at 230.38 +5.14 from the day prior
Friday’s Lean Index.__72.33 -1.27
Pork cutout___88.75 +4.58 and is up 2.66 compared to a wa
Hog slg. Yesterday estimated at 485,000 head. Down -1k head from a wa -5k ya
In the grain and oilseed trade, soybeans carried Friday’s lower action into Monday’s session. Spent most of the day in the red but as the closing bell drew closer they recovered pretty well to end the day with very mild losses. The January contract had been following a steady uptrending support channel on the charts since the early October low, but they fell out of the bottom side of that support channel on Friday and are now fighting to get back within that pattern.
The corn market started yesterday with some weakness in the overnight session and just continued that action throughout the day. The December contract made a new recent low of $4.53 ¾ after breaking below support at $4.61, now at a level that hasn’t been touched since July of 2021. The March and May contracts both set new contract low yesterday surpassing all levels of previous trade to the down side. It sure doesn’t help the corn market recently when soybeans aren’t there to keep dragging it along to higher money.
The wheat complex was the leader lower in the grains yesterday. After having a little bit of strength in Sunday’s overnight session heading into yesterday, things quickly turned lower. To the tune of over 20 cents lower in the Chicago contract early on in the day. All three Dec wheat contracts hit new contract lows. As the day moved on trade started to somewhat level out after coming off of those new lows but definitely did not recover by any means. US wheat still remains at a heavy premium to other wheat prices around the world which makes it hard to export much.
Crop Progress from November 27th will be the last for the 2023 season. The first weekly report for 2024 will be released Monday, April 1, 2024.
Corn harvest up 3% to now 96% complete. Michigan still behind at 79% complete vs. 83% average and Pennsylvania at 80% vs. 87% average. Winter wheat emergence now at 91%. This compares to 90% last year and 89% for the five-year average. Winter wheat conditions up 2% to 50% rated good/excellent and poor/very poor down 2% to 15%. This compares to last year’s ratings at 34% G/E and 26% P/VP.
Looking at yesterday’s Weekly Export Inspections from November 27th (week ending November 23rd) were not very impressive, except for milo. Milo inspections totaled 11 MBU, over twice the average needed per week. China took all but 50K bushels. Year to date milo inspections now up 27.2 MBU vs. last year. Soybean inspections totaled 53 MBU, still well exceeding the average needed per week which is now down to 27.4 MBU, but really needs to be pushing 70-80 MBU this time of year. Year to date now down 78.4 MBU vs. last year. Corn inspections were only 16 MBU with the average needed per week now up to 44.2 MBU. Year to date still exceeds last year by 57.1 MBU but USDA has exports 414 MBU higher than a year ago. Wheat inspections were only 10.2 MBU with the average needed at 14.2 MBU. Year to date now down 90.1 MBU with exports only projected 59 MBU lower this year vs. last year. The top destinations for each crop- Mexico again the #1 buyer of US corn, China the #1 taker for soybeans and milo, and the Philippines were number 1 for US wheat.
The Commitment of Traders report showed managed fund money through the week ending 11/21 sellers of 22k corn contracts which makes them (net short of 185.5k), sellers of 18.9k Chicago wheat contracts (net short 108.1k), sellers of 10k KC wheat contracts (net short 47.5k), sellers of 6.3k beans (net long 81.5k), buyers of 6.3k meal contracts (net long 137.8k), buyers 3.7k oil (net short 2.8k).
Overnight trade in the grains were a different story from yesterday’s day session with green on the screen. Corn just barely on the north side of unchanged, wheat a half a penny to 4 cents higher across the complex, and soybeans 4 to 6 cents higher.
8am flash sales showing 123,300 mt of soybeans sold to unknown destinations.
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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