Date: June 12th, 2019
The initial pressure on livestock futures came right after the major adjustment by USDA for new crop corn yesterday as corn reversed higher and the focus became higher feeding costs once again. Friendly news from USDA with both beef and pork production estimates lower for this year and 2020 along with pork exports increasing by 200 million pounds for 2019 to 6.466 billion and 270 million pounds for 2020 to 6.945 billion. Cash feedlot trade mostly inactive so far, a few hundred head in the North have traded at $182 dressed so far this week which is towards the lower end of last week’s trade. The Fed Cattle Exchange online auction will be held later this morning with 663 head consigned compared to last week’s 412 head of which 72 sold at $113 out of KS. Most still looking for higher money this week with futures higher.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 6/10/2019
Total Receipts: 4,222 Last Week: 6,909 Last Year: 7,608
Compared to last week, Feeder steers under 500 lbs steady to 4.00 higher, Over 500 lbs unevenly steady. Feeder heifers under 600 lbs steady to 3.00 lower, over 600 lbs steady to 3.00 higher. Demand moderate to good. Supply moderate.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 6/10/2019
Total Receipts: 7,031 Last Week: 10,212 Last Year: 9,228
Compared to last week: Feeder steers 3.00-7.00 higher, except 600-700 lbs. 2.00-3.00 lower. Feeder heifers 4.00- 8.00 higher. Steer calves steady to 5.00 higher but lighter weights not well tested. Heifer calves 3.00 higher. Demand good with active bidding as cattle futures traded mostly higher today. Heavy rains fell again across much of the state over the weekend. Wheat pasture is either ready to cut or getting close, however it doesn’t matter as many pastures have water standing in them or conditions are very muddy. Quality average to attractive with several large drafts included.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 6/10/2019
Total Receipts: 2,595 Last Week: 2,357 Last Year: 2,124
Compared to last week: Steers 6.00-8.00 higher. Heifers 5.00-7.00 higher. Quality plain thru attractive. Demand good. Slaughter cows 2.00-4.00 higher. Slaughter bulls 3.00-5.00 higher.
Cattle slaughter from Tuesday estimated at 122,000 head, up 2,000 compared to a week ago and up 4,000 compared to last year. Hog slaughter from Tuesday estimated at 478,000 head, up 1,000 from last week and up 31,000 from last year.
Boxed beef cutout values firm on Choice and weak on Select on light to moderate demand and offerings for a total of 110 loads sold.
Choice Cutout__222.39 +.73
Select Cutout__208.25 -.54
CME Feeder Index__132.91 +.65
CME Lean Hog Index__79.66 -.29
Pork Carcass Cutout__83.76 -.30
IA-S.MN Wtd Avg Carcass Base__75.65 -.38 from last Friday with no comp Monday
National Wtd Avg Carcass Base__75.30 +.03
June live cattle hit a new 12-month low last Friday at $106.50 with the contract low down at $105.05. The delivery period started Monday with cash trade still premium to futures or a positive basis for hedgers. The August contract hit a new contract low on May 31st at $102.30 with resistance up near $110. August feeders into a new contract low to end the month of May also at $132.15 with resistance up near $141 then $143.30. June lean hogs with a new recent low last Friday at $78.27, contact low at $72.20 back on 2/20/19, with resistance up near $85.
Moving over to the grains, corn was the news maker yesterday though with USDA taking a fairly bold move trimming 3 million acres and 10 BPA for a drop of 1.35 billion bushels from production estimates. Higher prices lead to demand rationing though, USDA trimmed feed demand and exports yet still a bullish ending stocks 810 million bushels lower than a month ago at 1.675 billion bushels for the 2019/20 crop year. The only change to the soybean S&D was a decrease of 75 MBU to old crop exports which filters through for a higher ending stocks both old and new crop over 1 BBU. Yes we are way behind on soybean planting as well, but USDA will wait until July to make any adjustments to acreage or yield. Wheat ending stocks are still bearish at 1.072 billion bushels but down 69 MBU from a month ago with old crop exports up 25 MBU, new crop production up 6 MBU and domestic feed usage up 50 MBU. Winter wheat harvest is just starting to move into KS now with quality and quantity in question. I would also say that an increase to wheat used for feed of only 50 MBU while corn dropped 300 MBU could still use some adjusting. No adjustments made to the U.S. grain sorghum balance sheet.
World corn stocks down 24.19 MMT, majority of that from the U.S. (20.5 MMT) and the balance from Argentina down 2.5 MMT and Brazil down 1 MMT. Brazilian corn production for this current crop year up 1 MMT to a new record at 101 MMT, an increase of 19 MMT from the previous year. Argentine new crop corn production projected 1 MMT higher, Russia increased .5 MMT and Canada decreased 1.4 MMT. World wheat stocks up 1.33 MMT, Russia, Ukraine and India production estimates each 1.0 to 1.2 MMT higher. World soybean stocks down .43 MMT, no changes to South American production estimates for old crop or new crop.
Overnight, grains traded mostly steady to weaker but came back mixed to higher this morning with corn finishing 1 higher, soybeans 2 higher and wheat 1 lower to 2 higher.
Now that the monthly crop report is behind us, it is back to weather watching and international trade. Egypt purchased 60,000 MT or 2.2 MBU from both Russia and Romania yesterday. U.S. SRW is priced some $25/MT or $.68/BU higher and U.S. HRW around $75/MT or $2.04/BU higher. South Korea booked 65,000 MT or 2.6 MBU of optional origin corn overnight while Taiwan purchased the same amount from Brazil.
Heavy rains still in the forecast for the weekend from Oklahoma through the Ohio River Valley and over this next week 1 to 5 inches in the forecast over the entire Midwest. The other problem continues to be the cooler than normal temps with the latest 6 to 10 day outlook still showing below normal temps from the Rockies through the Corn Belt, above normal on the West Coast and Gulf Coast and above normal moisture for all except the PNW and Southwest.
July corn topping out near the long term resistance as well as the December contract, $4.39 for July and $4.54 for December. There is still a gap remaining on the July contract from $4.07 to $4.04 ¾. Yesterday’s bullish report was still not enough to take another run at those levels. Soybeans also testing but unable to push through resistance for July around $8.95 and November around $9.20. July soybeans filled the top gap with the next from $8.37 ½ to $8.31 ½ and good support around $8.20, still holding the month long higher trend. July KC wheat filling the gap left in late May with support at $4.40 and resistance up at $4.97 then $5.07. July Chicago wheat holding a higher trend with support around $4.80 and resistance up near $5.30.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700