Date: June 20th, 2018
Morning Ag Markets – Matt Hines
Cattle futures and corn staged a good recovery yesterday while lean hog futures,
soybeans and wheat did come back from massive losses but still finished sharply
lower. Hard to explain why some markets stayed under pressure and others
rebounded with metals, energies and equities all mostly lower as well.
Fed Cattle Exchange later this morning with a decent amount consigned, 2,125
head compared to the past few weeks of just a few hundred. Last week there were
596 head consigned, of which none sold, 2 lots passed out at $100 & $112 live.
El Reno, OK yesterday, calf sale only reported steer and heifer calves $2 to $4
higher than last week. On Monday, Tulsa reported steers $6 to $8 higher and
heifers $5 to $7 higher and OKC reported feeders steers and heifers steady to $4
higher.
Cattle slaughter from Tuesday is estimated at 120,000 head, matching last Tuesday
and year ago. Hog slaughter from Tuesday is estimated at 448,000 head, up 1,000
from last week and up 14,000 compared to a year ago.
Boxed beef cutout lower on light to moderate demand and moderate offerings for a
total of 129 loads sold.
Choice Cutout__219.70 -1.01
Select Cutout__202.30 -1.90
CME Feeder Index:__141.48 +.20
CME Lean Hog Index.__84.05 +1.19
Pork Carcass Cutout__84.71 +.30
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__83.37 +.54
National Wtd Avg Live__ 63.87 +2.53, Wtd Avg Carcass Base__83.16 +.34
Cattle On Feed Industry Estimates for Friday, June 22, 2018
Avg Estimates Prev Rpt
On Feed June 1 103% 105%
Placements during May 96% 92%
Marketings in May 105% 106%
June live cattle hitting resistance at $109.15 this week, broke out to $110.65 for a
3-month high last week. Support first at $107 then at $105.15. August feeders
following through on the key reversal higher last Friday and hitting a new 3-month
high yesterday at $149.92. The next area of resistance up at $154 then $156 with
support at $144.50 and $142. July lean hogs up to $83.82 on Monday with the
contract high up at $85.57 from January and good support down around $75.
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Over in the grains, again the pressure was heaviest on the soybeans which makes
sense due to the high volume export trade into China. Soybeans have been the
leader lower since late May and under some heavy technical pressure. Wheat
under some harvest pressure and improved conditions with mixed harvest reports
now coming out of KS. I am starting to hear some use the terms “better than
expected” more than “it is a bad as I thought it would be”. Corn fundamentals are
most certainly the friendliest with US stocks projected near 1.5 BBU and world
stocks dropping as well year over year. Prices have pushed lower than they
fundamentally should be right now for all.
Overnight, grains were holding small gains as most hope for a bottom here soon.
Corn and soybeans both finished 1 to 2 higher and wheat 6 to 8 higher.
South Korea picked up another 5.4 MBU of optional origin corn overnight. This
brings their total up to 59 MBU of corn purchased so far in the month of June.
Over the next 7 days, rains remain the heaviest in IA with 5+ inches expected and
2+ across KS, NE and through the Midwest. The latest 6-10 day outlook showing
the same with above normal precipitation across the entire Midwest and Southeast.
Temperatures are forecasted normal to above normal across the entire U.S.
The spikes lower yesterday were severe across all the grains. Looking at weekly
charts, nearby corn prices were within just a few cents of last December lows and
nearby soybeans down to prices not since seen 2008! July corn hit a new contract
low at $3.38 ¾. Resistance levels are at $3.66 ½, $3.75 ½ and $3.80. July
soybeans down to $8.41 ½, that’s a loss of $2.10 in 3 weeks. July KC wheat
breaking the long term higher trend from mid-December with support at $4.50 and
the first line of resistance up near $5.20. July Chicago wheat barley holding the
long term higher trend with resistance up at $5.07.