Another wild ride of ups and downs to start the week in the corn market resulted in a wild ride and broad range of trade in the feeder cattle futures as well. You couldn’t tell it by the closes though, because the settle was mixed from mildly higher to mildly lower on the front five months in feeders and up around $1 in the January and deeper deferreds. Live cattle were lower on the front two and higher on the back end and actually a little ugly looking on the now front month June contract that closed more than $1 lower, along with being $3.70 discount to the top end of last week’s Southern Plains cash.
The national feeder and stocker cattle summary that comes out on Monday’s now cited last week’s steer and heifer prices ranging from $1-$5 lower than the previous week. That’s certainly not as bad as it could have been given the fact July corn futures were up more than 40 cents and the front month May was up 80c. Another interesting note regarding total receipts at auctions, direct and internet/video sales was last week being the first time since late February that the total run was less than the same date 2020 levels.
The great covid slump of 2020 when folks hit the panic button and started to trim sales started in late Feb/early March and peaked around the 20th of March when 85,700 head was the total run. That same week this year was 229,700. That’s also why last month’s placement total in the On Feed report was up 28% from a year ago and it will look pretty nasty when this month’s report comes out as well. The bigger change in this next go-round though will be in marketings. These daily kill numbers that we report that are 20k-40k head larger than year ago totals. That’s really going to make the next On Feed report look extremely bearish in literally every category. Ignore the numbers versus last year though and compare them to the previous couple of years instead.
Cattle slg.__ 114,000 -3k wa +36k ya
Choice Cutout__299.30 +2.80
Select Cutout__283.79 +.74
Feeder Index:___132.63 -1.50
Lean Index.__107.10 +.21
Pork cutout___111.66 +1.20
IA-S.MN direct avg__116.16 -.33
Hog slg.__483,000 unch wa +203k ya
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Moving on to the grain and oilseed trade, corn punched out a new round of contract highs in the old crop months, but didn’t get there in new crop. Soybeans, KC and Chicago wheat all looked very similar to each other on the charts, meaning close to contract highs, but no new highs posted. MGEX wheat was the exception and for good reason. The rainfall totals in Northern Plains spring wheat country were really disappointing and while spring wheat futures still didn’t close higher, they weren’t nearly as weak as KC and Chicago and they did poke into new contract high territory at the top yesterday. Wheat kinda has a story now and it’s spring wheat leading those headlines because it’s so dry in North Dakota. That could all change with a rain, but it stays bullish if it stays dry.
Export inspections data continued the latest trends, which translates into bullish corn, a little bearish for soybeans and bearish wheat as well. Corn export loadings were 84.2 mln bushels versus a weekly average pace needed to hit USDA’s export target for the marketing year of 53.7 mln. That brings the marketing year to date inspection total up to 64% of the entire export forecast. I’ll also add that makes corn a wild card still for the bull/bear potential. Yes, sales have been bullish and yes, inspections have been bullish. A sale doesn’t make for an actual export at the end of a marketing year though, a shipment does. 36% of the total export forecast hasn’t shipped yet, which means any potential cancellations could have a big impact on total exports. Compared to the soybean market where 89% of the total export forecast has already shipped and it’s hard to make the soybean picture look bearish because so much of it is already set in concrete as an actual sale and shipment, both. Ironically, wheat inspections are sitting at only 86% of the total export forecast, but the wheat marketing year ends on the last day of this month. Beans and corn have until the last day of August to hit their respective targets. Export inspections continue to look bearish for wheat with this week’s total coming in at 18.7 mln bushels versus a pace needed of 27 mln. Soybeans were 5.3 mln bushels this week versus 13.4 mln needed. Milo was bullish at 9.3 mln inspected versus 4.1 mln needed.
The top destination in everything yesterday was China in wheat, corn and milo. Mexico was #1 in soybeans, but China was #2. China took a combined total of 45.9 mln bushels of US product last week.
Fund activity yesterday had them estimated sellers of 8k wheat and 4k beans, but buyers of 2k corn.
Crop progress data from yesterday afternoon showed 49% of the nation’s spring wheat planted, which was a gain of 21% in one week. It’s also 17 points ahead of normal and 22% ahead of last year’s pace. Easy to make progress when there’s no mud anywhere. Corn planting advanced 29 points in one week landing at 46% done. That’s only 2 points behind last year’s crazy fast pace and 10% ahead of the 5 year average. Soybean seeding jumped 16% from last week coming in at 24% done nationwide. That’s 3% ahead of last year and 13% over the 5 year average.
6-10’s last night showed above normal temps for most areas in Ok and Tx outside of the Panhandle and that extended south and east to catch the southern tip of Illinois. Everywhere north of that line and including the Panhandle was below normal on temps. Rainfall potential was normal in the Panhandle and above normal through the rest of the HRW wheat belt, as well as the Corn Belt. The far Northern Plains were still below normal on moisture chances.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com