After two days of sharply higher push in the feeder cattle market, the run lost steam and prices settled back to a mildly lower close in all but the front month March. Live cattle had one month down more than $1 and the rest knocking at the door of triple digits lower. Still no negotiated cash as of the close yesterday, but with Feb futures parked right at last week’s cash level AND that contract expiring Friday, it’ll be interesting to see whether beef packers can continue pressuring prices like they have through most of February. Late afternoon reports showed a very limited number changing hands in Kansas at $197. Not enough to call it a trend, but that’s also $2 under last week’s prices.
Big picture longer term fundamentals are still bullish for cattle, but when packers started to cut kill numbers in an effort to stop the bleeding in their margins, it definitely improved their leverage in the negotiations for cash cattle. For the most part, feeder and calf prices have held up much better than the fats, as have feeder cattle futures, but all of it is down significantly from the new all-time highs that were posted in late January.
Weekly export sales in the meats were friendly across the board. Net beef sales were 18,200 mt’s, which is down 15% from a week ago, but still a solid number. Actual exports were 14,700 mt’s. South Korea, Japan and China were the top buyers and the same three in the same order for shipments.
Net pork sales were 32,200 mt’s, which was up 26% from a week ago. Actual exports were 34,100 mt’s. Mexico, Japan and China were the top buyers. Mexico, Japan and South Korea were the top destinations for actual shipments.
Cattle slg.__122,000 +5k wa -1k ya
Choice Cutout__312.90 -1.42
Select Cutout__303.24 -.89
Feeder Index:___278.73 -.71
Lean Index.__89.49 +.02
Pork cutout___96.66 +1.01
Hog slg.__490,000 +1k wa -1k ya
In the grain and oilseed trade, it was solid red ink across the screen at the close and MGEX wheat was the leader to the downside with low double digit losses. Warmer weather and a switch in the 6-10’s this week to wet in the Central, Southern Plains and Corn Belt are providing some of that pressure, but there’s also still the looming chatter regarding tariffs for US trade and potential de-escalation in the Russia / Ukraine situation that have some negative influence.
Weekly EIA ethanol data was a little bearish for corn. Production declined by 0.3% week to week. Blender demand was down 0.5% and exports downticked a little also. Stocks increased by 5%, reaching a level that was almost record large. It’s been a great first half of the marketing year for corn use on the ethanol side, let’s hope it doesn’t slip in the second half.
Weekly export sales in the grains weren’t expected to be anything spectacular this week because the 8am daily announcements had been really quiet. Across the board the numbers ranged from neutral to dismal, aside from a neutral to friendly corn number. New crop sales totals were 5 mln bushels in corn, zero milo, 100k soybeans and 200k wheat. Current crop year totals were 31.3 mln bushels of corn, 900k milo, 15.1 mln bushels for soybeans and only 9.9 mln wheat. Single digits for wheat is noooo Bueno. Top buyers in everything were; Taiwan in wheat, Mexico in corn, Mexico in milo and China in soybeans.
Fund activity yesterday showed them as estimated sellers of 3k wheat and 2500 beans and on the buy side of 1k corn.
6-10 day weather forecasts last night showed a small shift in temps with normal to below creeping into the western US and extending to about central Missouri. The Corn Belt, Northern and Southern Plains were normal to mostly above normal on temps still. Precip chances were above normal through all of the Central Plains and Corn Belt, but south of the Panhandle region is was below and the far Northern Plains were normal.
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