A sharp push higher yesterday across the cattle complex opened the door to active spec buying and bullish chart technicals. May feeders finally took out the April high and the August and beyond months did the same and when that happened, what started as a decent rally turned into a great rally and all back months finished $2+ higher with the August contract more than $3 up. Live cattle gains were stout and all triple digits, but nothing in the $2 range and of course, live cattle charts have looked quite a bit better than feeders for a while anyway.
No cash feedlot trade at least through the futures close yesterday, but afterwards MPR showed light numbers in Texas and Kansas at $187 picked up. A lot of things need to happen before the long holiday weekend hits. Packers are buying for a shorter slaughter week and we also have a monthly COF report coming out Friday afternoon. Average analyst estimates for that report show the COF total on May 1 at 99.1% of a year ago. Placements in April are expected at 93.3% of last year with a broad range in the poll from 86.5% all the way up to 98% of a year ago. Marketings are pegged at 109.5%, but it was a funky month in April with 22 business days versus just 20 the previous year, which skews the monthly number by 9.1%, meaning a 109.5 number tomorrow will equate to just 100.4% on an adjusted daily basis.
Weekly export sales in the meats were bullish beef and a little bearish pork. Net beef sales were 21,500 mt’s which was up 42% from the previous week. Actual exports were 17,300 mt’s which was a new marketing year high. The top three buyers were China, Mexico and Taiwan. Top destinations for actual shipments were South Korea, Japan and China.
Net pork sales were 26,300 mt’s, which was up from last week, but it’s been really common for pork sales to be 30k+, so numbers in the 20’s aren’t anything to write home about. Actual exports were still solid though, coming in at 34,300 mt’s. The top three buyers were Mexico, Japan and South Korea. Top destinations for actual shipments were Mexico, Japan and South Korea.
Cattle slg.__122,000 -2k wa unch ya
Choice Cutout__312.17 -.85
Select Cutout__299.61 -1.26
Feeder Index:___248.44 +.54
Lean Index._91.82 -.19
Pork cutout___100.07 -.62
Hog slg.__484,000 +4k wa +14k ya
*****************************************************************************
In the grain and oilseed trade, wheat was up double digits again coming out of the Tuesday night session into yesterday’s open. New crop July KC hit $719 ¼ at the top for a new recent high, but closed well off that mark and wheat was actually mildly lower in everything at the finish. Black Sea region weather with the recent freezes in Russia and Ukraine wheat areas have been friendly wheat price and we’ve seen a lot of production and export projections being cut because of that weather.
Corn and beans were on the plus side at the closing bell. Beans were catching a bid from rumors China had cancelled a couple South American cargos and booked several boats of US soybeans for July delivery. We didn’t get confirmation in yesterday’s 8am flash sales announcements, so at least through yesterday it was still just rumor. Important to note also that it was old crop soybean rumor, not new crop. China has been surprisingly absent from new crop purchases and generally by this time of year we’ve got a decent new crop book built into that destination already.
Weekly EIA ethanol data showed production up another 1.9% this week versus last. Blender demand was up 2% and stocks were down 1.1%. Bullish report all the way around aside from the fact we went through quite a few weeks of really poor grind numbers in the spring plant maintenance stretch.
Weekly export sales in the grains finally made it back into double digits for soybeans, but not by much. Soybean and corn sales were in neutral territory. Wheat and milo sales were bearish. Old crop totals showed 35.9 mln bushels of corn sold, 200k milo, 10.3 mln bushels of soybeans and 700k bushels of wheat. Sales data was for the period of May 10-16 and the wheat marketing year ends on the last day of this month. New crop sales weren’t too whippy either with an 8.3 mln bushel wheat total. Soybeans showed 2.4 mln bushels of new crop sales, milo was zero and corn was 12 mln bushels.
The top old crop buyer in everything was Haiti for wheat, Mexico in corn, China in milo and Japan in soybeans. Of the new crop buyers in soybeans, China wasn’t on the list once again.
Funds yesterday were estimated sellers of 2k wheat and on the buy side of 4k corn and 3500 beans.
8am daily export reporting still gave us nothing to verify the China soybean rumors.