Cattle futures opened up the week flat to slightly lower and the cookie crumbled from there ending with pretty hefty losses by the time the closing bell rang. Futures rallied pretty strong in the latter part of last week on the news of the Southern border closing back down. That advanced all of the cattle complex into new contract highs, which we have since come off of a bit, leaving some resistance over the top. And once again, when you get a quick and steep rally, it kind of tends to leave strong support levels in the dust. Feeder cattle pushed over $6 lower at one point, but managed to recoup a tad bit which had the front 4 contracts finishing down over $5 and deferreds down $3-4. The front four of live cattle were all down $2+ with the deferreds hanging in there a little better as well.
Looking at the charts, August live cattle made multiple new highs last week but ran out of steam after Friday’s peak at $223.27 for the contract high. Major support isn’t until $207.70 which is $15.57 apart. Although definitely in a nice strong uptrending channel, so the bottom side of that channel probably comes into play as support prior to testing the actual support level. August feeder cattle outran their previous high last week as well, peaked on Thursday at the new contract high of $326.87. Major support clear down at $300.05 which is $26.82 apart. Same scenario as live cattle, being in a strong uptrending channel, the bottom side ought to be supportive.
National feeder and stocker cattle summary for the week ending July 12- Compared to the last tested markets, steers and heifers in the South Central and North Central areas sold 10.00 to 15.00 higher, while the Southeast was mostly 4.00 to 7.00 higher in the same time period when there were limited offerings due to the Independence Day holiday. Very good demand for all weights of steers and heifers after the holiday week as there were more auctions that hosted a feeder cattle sale last week. Feeder cattle buyers know that if they want to fill their pens with yearlings they will have to compete very heavily and are willing to chase the market. The rising cost of yearlings continues to pull up the price of calves which typically do not establish new yearly highs in the middle of summer. Pasture conditions are good as well, allowing for a full, complete grazing season as most years also don’t typically have pasture conditions rated this good in the middle of July.
Cattle slg.__ was 112K, -2k compared to wa, -5k compared to ya.
Choice Beef Cutout__377.07 -1.57.
Select Cutout__364.58 -1.91.
CME Feeder Cattle Index: $319.89 -3.48.
Hog slg.__ was 477K, -1k from wa, +2k compared to ya.
Lean Index. 107.25 +0.15__ Pork cutout___ 113.85 +0.38.
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In the grain and oilseed trade, tariff headlines have resumed as the topic of discussion. Last week, it was potential tariffs on Brazilian imports into the US. Then, over the weekend added the possibility of a 30% tariff against Mexico and EU imports, all beginning August 1st. Taiwan and South Korea continue to negotiate. And tensions rise between Trump and Putin, threatening a 100% tariff against Russia if a peace deal is not struck between Russia and Ukraine within 50 days. And of course, the big thing keeping a lid on these markets- non threatening US weather. After corn made new lows Sunday night, it must have spurred some buying as corn was the only one to finish with positive quotes amongst the major grains.
Weekly export inspections report for the week ending July 10- As the story goes, a friendly number for corn shipments again while milo posted a big fat zero for inspections. Soybean inspections also slipped by quite a bit while the wheat number was pretty good. Corn inspections totaled 50.7 MBU for the week compared to 61.6 M the week prior. MYTD for corn is ahead of LY by 30% while USDA projects only a 22% increase in exports for the year. Soybean shipments totaled just 5.4 MBU compared to 14.7 M the week prior. MYTD for soybeans still ahead of LY by 10% with USDA projecting a 10% increase, meaning we are right on pace while corn is well ahead. Milo inspections were zero as I had mentioned, which brings it behind LY’s pace by now 64% with USDA projecting a 57% decrease YOY. Lastly, wheat shipments came in at 16.2 MBU following the strong 19 MBU the week prior. MYTD is now behind LY’s pace by 2.6 MBU, or 3% while USDA projects a 3% increase YOY. Seven weeks remain in the fall crop marketing year while wheat is pretty fresh into its new marketing year.
Yesterday’s crop progress report showed corn silking at 34%, -5 from LY, +1 from the 5 yr avg. Corn in the dough stage reached 7% which is in line with YA but +2 from the avg. Corn conditions were left unchanged at 74% GE and 5% PVP. Soybeans blooming now at 47% which is -2 from YA but in line with the avg. 15% setting pods which is in line. Bean conditions improved by 4 points to now 70% rated GE and also trimmed 2 from the PVP category now at just 5%. 24% of milo is headed which is -4% from YA and the avg, 14% is coloring which is also slightly behind. Milo conditions did improve to now 69% GE and 4% PVP. Winter wheat harvested advanced 10 points from last week to now 63% complete. Behind LY by 7% but now just 1% behind the 5 yr avg pace. Spring wheat headed is at 78%, +4 from LY and +3 from the avg. Spring wheat conditions improved by 4 in the GE now at 54% and dropped 2 from the bad with 13% rated PVP.
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