Date: June 25th, 2018
Cash feedlot trade finally got going Friday as packers held firm all week. Trading began at $109 to $110 live, steady to $1 lower than the week previous. It continued to fall throughout the day on Friday down to $107 live and $170 to $174 on a dressed basis in the North, up to $6 lower than a week ago.
Bearish USDA Cold Storage Report with Total Red Meat 9% higher than a year ago and Beef up 13% from a year ago. Followed by another bearish Cattle On Feed Report. Cattle on feed as of June 1st totaled 11.6 million head, 104% vs. a year ago and 1 point higher than the pre report estimate. Placements during May equal to last year compared to a 96% estimate and over 10% above the 5-year average. Marketings during May matching the estimates at 105%.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – W/E 06/22/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 164,000 65,800 17,000 246,800
This Week 179,900 56,400 80,200 316,500
Last Year 145,400 26,800 72,700 244,900
Compared to last week, steers and heifers sold steady to 4.00 higher. Cattle feeders have been selling their fed cattle in a timely manner and have been aggressively filling their empty pens. Auction receipts are spotty this time of year, however, when auction receipts are sizeable, willing buyers are there to fill the seats. Direct trading receipts in the South Plains were heavy with future delivery contracts as producers capitalized on the strong CME cattle complex. In the Northern Plains, some upcoming large video sales in the next several weeks will gauge buying interest as buyers are content at this time to take a wait and see approach on what direction the market will move when dealing with summer and fall delivery cattle. With deteriorating pastures conditions in the Central part of the country, many more cows will find their way to the market place in some capacity this summer. If conditions worsen, some producers may be looking into an early weaning program to save as much stored water as possible.
For the week, Friday June 15th to Friday June 22nd, June Live Cattle -$.17, August +$1.12, August Feeder Cattle +$1.22, September +$1.55, July Lean Hogs -$1.90, August -$2.87. Boxed Beef, Choice -$4.43 @ 217.16, Select -$.71 @ 202.02.
Cattle slaughter from Friday is estimated at 119,000 head, up 1,000 from the week previous but down 1,000 compared to last year. For the week, 664,000 head, up 10,000 from the week previous and up 25,000 from last year. Beef production last week at 528.1 million pounds, 519.4 the week previous, 511.5 million last year.
Hog slaughter from Friday is estimated at 424,000 head, up 12,000 from the week previous and up 5,000 compared to a year ago. For the week, 2,168,000 head, down 47,000 from the week previous but up 13,000 from last year.
Boxed beef cutout values steady to firm on light to moderate demand and light offerings for a total of 93 loads sold.
Choice Cutout__217.16 -.25
Select Cutout__202.02 +.41
CME Feeder Index:__142.57 +.36
CME Lean Hog Index.__86.17 -.38
Pork Carcass Cutout__85.64 +.60
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__79.02 -2.61
National Wtd Avg Live__ 62.47 -.42, Wtd Avg Carcass Base__79.97 -1.61
June live cattle expire at the end of this week and look to hold the $107 to $109 level. August still holding a month long higher trend with support from $104 to $103.30 and resistance at $107.60 then around $110. August feeders also trending higher with last week’s high at $150.75 and support from $147 to $146.50. July lean hogs pulling back $4 from last week’s high up at $83.82 with support at $79 then down at $75.
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Soybeans rebounded to end the week but all grains still finished lower for the week. The trade concerns continue to pressure the markets but weather may be now supporting prices instead of helping to drag prices lower. Some very excessively wet areas exist throughout the Corn Belt and heat comes back into the forecast this week. It didn’t appear there was much conversation last week between China and the U.S. which is discouraging as July 6th is the next target date for implementation of the next round of tariffs. Managed money or funds were sellers in the all the grains last week, flipping long grain positions in corn, soybeans and Chicago wheat to a net short position now.
For the week, Friday June 15th to Friday June 22nd, July Corn -$.04, December -$.04 ¾, July Soybeans -$.11, November -$.14 ¼, July KC Wheat -$.31, December -$.29 ¼, July Chicago Wheat -$.08 ¼, December -$.12 ¾, July MPLS Wheat -$.21 ¾, September -$.20, July Soybean Meal +$.20/T, December -$4.1/T
Overnight, grains were lower led by soybeans and wheat. Corn finished 2 to 3 lower, soybeans 8 to 10 lower and wheat 9 to 12 lower.
USDA announced a private sale of 186,000 MT or 6.8 MBU of old crop soybeans sold for unknown destinations. This is one we haven’t seen for a while and very interesting if it ends up being shipped to China in the next couple months. The freight strike in Brazil has backed up loadings along with the extra surge buying by China. Basis levels in Brazil up to $1.60 over compared to U.S. Gulf values around $.60 over.
More heavy rains in the forecast for NE, IA and MN this week with scattered showers for the rest of the Midwest. The latest 6-10 day outlook showing above normal precipitation for the North and Southeast with below normal for the Southern Plains. Temperatures are forecasted above normal central and east with below normal for the western third of the U.S.
July corn spiked lower for a new contact low last week at $3.38 ¾ finding resistance at $3.60. The December contract down to $3.60 last week after matching the contract high at $4.29 ½ back on May 24th. The first line of resistance now at $3.80 then around $4. July soybeans down to $8.41 ½ last week with resistance at $9. November down to $8.64 ½ with resistance at $9.20. July KC wheat fell nearly $.90 in two weeks breaking the long term higher trend. Last week’s low was at $4.71 ¾ with resistance up at $4.96. July Chicago wheat looks similar with last week’s low at $4.67 ½ and resistance at $4.97 ½.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener / Alex Gasper
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700