Date: May 30th, 2018
Morning Ag Markets – Matt Hines
Live cattle futures were under pressure all day yesterday with light cash trade at lower prices last week along with outside markets providing pressure to start this week. NE trade reported yesterday on 1,250 head at $109 live matching the low end of last week’s trade. It will be interesting to see how cash feedlot trade develops this week as packers had been buying for deferred shipments previously entering this post-holiday shortened trading week. Feeders held mild gains when corn flipped lower during the day. Most sale barns closed early this week with calf trade in El Reno, OK yesterday reporting steady to $2 higher for steers and $3 to $6 higher for heifers.
Cattle slaughter from Tuesday is estimated at 120,000 head, up 1,000 from last week and up 2,000 from last year. Hog slaughter from Tuesday is estimated at 431,000 head, down 27,000 from last week and down 10,000 compared to a year ago.
Boxed beef cutout values steady on Choice and lower on Select on light to moderate demand and moderate to heavy offerings for a total of 108 loads sold.
Choice Cutout__227.56 +.13
Select Cutout__203.65 -.97
CME Feeder Index:__135.04 +.58
CME Lean Hog Index.__69.46 +.02
Pork Carcass Cutout__76.34 +.74
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__66.09 +.79
National Wtd Avg Live__ 51.54 +.77, Wtd Avg Carcass Base__65.59 +.51
June live cattle still battling the 20-day and 50-day moving averages providing resistance just shy of $105. Support down at the low from May 17th at $101.37 and then the contract low down at $97.07 from early April. August feeders on a nice run higher the past 2 weeks with support holding so far at $142.40, resistance up at $145.60, $147.30 then $149. June lean hogs still holding the long term lower trend yet range bound the past month from $72.20 to $77.50.
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Grains were higher in the overnight and morning hours yesterday but quickly fell off as export inspections were not impressive, recent hot weather but nearby rains in the forecast, the USD into new recent highs matching the peak from this past November and the trade war with China may not be over just yet.
Export inspections for the week ending May 24th were below expectations for soybeans at 21.2 MBU, wheat at 15.8 MBU and grain sorghum at 1 MBU. Corn continues to remain strong at 67.1 MBU with only 52 MBU needed per week to meet the current USDA estimate. The White House ratcheted up the intensity of negotiations by announcing plans to enact a 25% tariff on certain technologies totaling $50 billion and other tech restrictions aimed at investments, export controls and intellectual property. Additional details will be released by June 15 and the tariff enacted shortly after.
Crop progress report showed corn planting at 92% vs. 81% a week ago and 90% avg., the crop is 72% emerged vs. last week at 50%. The crop is rated 79% good to excellent vs. just 3% poor to very poor, the highest rated start for a corn crop since 1996. Soybean planting is 77% complete vs. 56% a week ago and 62% avg, the crop is 47% emerged vs. 26% last week. Overall expectations were for winter wheat conditions to be unchanged week over week, but they improved 2% to 38% G/E. Spring wheat planting came in at 91% complete vs 79% last week and the long term avg of 89%. Cotton planting progress at 62% complete (last week 52%), compared to the year ago week 61%. Grain sorghum planting progress at 49% complete (last week 39%), compared to the year ago week 43%.
Grains continued lower overnight. Corn finished 2 lower, soybeans 4 to 5 lower, Chicago and KC wheat 8 to 9 lower with MPLS 3 to 5 lower.
No export sales announced this morning. China responded back overnight that it was ready to fight back if Washington was looking for a trade war. Weather looking more bearish than bullish right now with Brazil’s second corn crop receiving beneficial rains along with moisture on U.S. fall crops.
Over this next week, scattered to heavy rains in the forecast for most of the Northern Plains and Corn Belt. The latest 6-10 day outlook though only showing above normal precipitation for the Northern Plains with a wide swath of below normal from TX to the Great Lakes and stretching to East Coast. Temps are still forecasted above normal for the Southwest and Southern Plains.
July corn tested support at the 50-day moving at $3.96, still holding the higher trend with resistance up at $4.10 and $4.12. December with support at $4.12 and resistance at $4.29 ½, the contract high from last summer and hit again last week. July soybeans still in a downtrending channel since early March with resistance up at $10.50 and support down at $9.92. November once again topped out at $10.60, support at $10.30 and $10.02. Wheat actually gapped higher the night before, stimulated by rallying European futures yet again, and hit a new recent high before reversing lower. July KC wheat still holding the long term higher trend from mid-December with support at $5.40 and $5.09. July Chicago wheat with the same pattern, support at $5.20 and $4.90.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener / Alex Gasper
matt@loewenassociates.com
866-341-6700
