Date: July 2nd, 2018
Cash feedlot trade last week was split between Wednesday and Friday. Midweek confirmed sales in NE at $106 live but finished up Friday as high as $107.50 and $170 dressed. KS and TX trade midweek was at $106 live but finished the week at $107 to $108. Boxed-beef cut-out continues its normal seasonal decline as July can be sluggish month for overall beef demand and not necessarily a rally month for fed cattle prices with the extreme hot weather.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – W/E 06/29/2018
RECEIPTS: Auctions Direct Video/Internet Total
This Week 182,800 47,400 66,800 297,000
Last Week 164,000 65,800 17,000 246,800
Last Year 134,200 36,200 87,100 257,500
Compared to last week, steers and heifers sold 1.00 to 4.00 lower, with the exception of North Central auctions selling steady to 4.00 higher. In the North Central auctions that had sales this week, demand was good from a large crowd of buyers. Sharp losses on the CME cattle boards in early week trading did not deter buyers from backfilling empty feedlot pens. Quite a few of the heavy weight feeders came out of background lots with some off of grass. Some consignments of lightweight feeders were going back to grass as producers feel like they will have ample feed through the summer.
For the week, Friday June 22nd to Friday June 29th, August Live Cattle +$.82, October +$.62, August Feeder Cattle +$2.12, September +$1.12, July Lean Hogs +$3.05, August +$1.07. Boxed Beef, Choice cutout -$5.20 at $211.96, Select cutout -$3.45 at $198.57.
Cattle slaughter from Friday is estimated at 119,000 head, matching the week previous and last year. For the week, 646,000 head, down 18,000 from the week previous but up 8,000 from last year. Beef production for the week at 514.9 million pounds last week compared to 528.1 million the week previous and 512.0 last year.
Hog slaughter from Friday is estimated at 435,000 head, up 11,000 from the week previous and up 16,000 compared to a year ago. For the week, 2,239,000 head, up 71,000 from the week previous and up 39,000 from last year.
Boxed beef cutout values lower on light demand and moderate to heavy offerings for a total of 129 loads sold.
Choice Cutout__211.96 -1.28, -5.20 for the week
Select Cutout__198.57 -2.09, -3.45 for the week
CME Feeder Index:__142.00 -.55
CME Lean Hog Index.__83.69 -.63
Pork Carcass Cutout__87.38 -.21
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__77.06 -.13
National Wtd Avg Live__ 59.45 -.94, Wtd Avg Carcass Base__76.69 -.19
August live cattle filled the $1 gap left from early last week, now on a 2-month long higher trend with support around $102 and resistance at $107.62 then around $110. August feeders also trending higher hitting a new 3 ½ month high on Friday. Resistance next at $154 then $156 with good support around $145. July lean hogs rallying back last week within range of the recent high at $83.82 and support at $78.
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The acreage report last Friday was actually bearish for corn and wheat but the market tossed aside that new information and remained higher into the close. U.S. weather is staying hot with some drying for the Corn Belt indicated in the last 6-10 run. Corn acres jumped over 1 million higher than the March intentions and ½ million over the pre report trade average. Spring wheat acres are projected higher but it was a neutral report for winter wheat. Canada reported reduced wheat acres as expected and southern Russia still struggling with drought conditions. U.S. soybean acres at 89.5 million were actually under the estimate but up ½ million from March, which did give beans some life midday but pressure continued and pushed beans back to new recent lows at the close.
For the week, Friday June 22nd to Friday June 29th, July Corn -$.07, December -$.06 ¾, July Soybeans -$.36, November -$.36 ¼, July KC Wheat -$.18, December -$.17 ¼, July Chicago Wheat +$.06 ¼, December -$.04 ¾, July MPLS Wheat -$.27 ½, September -$.24 ¼, July Soybean Meal -$6.30/T, December -$11.1/T
Overnight, grains were steady to higher led by wheat but corn and soybeans fell back to finish 1 lower, wheat finished 5 to 7 higher.
Not much new news to talk about today, the markets were feverishly awaiting Friday’s report, month end and Q2 end. The next crop report comes out July 12th with USDA starting to adjust acres and yield as well as demand. The tariff implications will be included in this next report according to the USDA chief economist. From now until then, markets will trade U.S. weather as corn is at its most critical stage of pollination.
Over this next week, rains are light in the Plains and Midwest with 1-3 inches expected from NE to MN. The latest 6-10 day outlook showing below normal precipitation for the North and above normal South with temperatures above normal for all except TX.
December corn stuck in $.15 range the past 2 weeks with the contract low down at $3.60 and resistance up at $3.80. November soybeans still on a lower trend with the spike low mid-June down at $8.64 ½ and resistance up at $9.20. September KC wheat with support at $4.71 ½ and resistance at $5.16. September Chicago wheat with support at $4.80 and resistance at $5.13.
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