Date: August 7th, 2018
Light to moderate pressure continued to build for livestock futures yesterday even with the higher cash trade last week and cash still premium to nearby live contracts. Packers did purchase the second largest volume of cattle of the year, 165,000 head, leaving smaller show lists this week. 3,000 head were confirmed yesterday at $112.50 live in Nebraska, down $1 to $2 from last week.
Oklahoma National Stockyards – Oklahoma City, OK
Livestock Auction Report for 8/6/2018
Receipts Week Ago Year Ago
7,200 5,693 5,059
Compared to last week: Feeder steers 600-700 lbs. sold 5.00-8.00 higher, the balance brought 1.00-4.00 higher. Feeder heifers 1.00-3.00 higher. Steer and heifer calves 450-600 lbs. 2.00-5.00 higher. Lighter calves not well tested. Demand good to very good. Trade active with a large crowd on hand for most of the day. Quite a few large loads of attractive cattle on offer.
Joplin Regional Stockyards – Carthage, MO
Livestock Auction Report for 8/6/2018
Receipts Week Ago Year Ago
5,708 5,856 4,167
Compared to last week, steers and heifers steady, except yearling steers 700 to 850 lbs and 500 weight heifers steady to 3.00 higher. Demand moderate to good, supply moderate to heavy. Receipts continue to be heavy as all of the trade area is classified as abnormally dry to severe drought.
Cattle slaughter from Monday is estimated at 118,000 head, up 5,000 from last week and up 2,000 compared to last year. Hog slaughter from Monday is estimated at 395,000 head, down 41,000 from last week but up 14,000 compared to a year ago.
Boxed beef cutout values higher on moderate to fairly good demand and moderate offerings for a total of 96 loads sold.
Choice Cutout__205.68 +.93
Select Cutout__198.33 +1.24
CME Feeder Index:__149.74 +.82
CME Lean Hog Index.__66.04 -1.53
Pork Carcass Cutout__72.81 +1.13
IA-S.MN Wtd Avg Live__ N/A, Wtd Avg Carcass Base__52.99 -1.76
National Wtd Avg Live__ 43.91 +.19, Wtd Avg Carcass Base__53.09 -1.49
August live cattle into new recent highs on Monday at $111.10 but closed near its low. Support at $107.50 with the next resistance level around $112. August feeders still carrying a lower trend the past couple weeks with support at $149.50 and $148 and resistance up at $155. August lean hogs still crashing lower, hitting new contract lows with support next at $55 from the weekly continuous chart.
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Weather forecasts continue to point to warmer and drier in major growing areas which is supportive to prices yet not enough to add some real weather premium. Soybeans were under pressure from China reporting they could easily cut 10 MMT from their current soybean usage. Wheat shot higher with hot and dry continuing across Europe and Russia.
Export inspections for the week ending August 2nd exceeded expectations for soybeans at 32.8 MBU. Corn shipments were good and met expectations at 50.7 MBU. Wheat still lagging behind at 12.0 MBU and 1.9 MBU of grain sorghum shipped out.
Crop progress and conditions were released after the close on Monday and gave soybeans a boost higher in the overnight with conditions down 3 points to 67% good to excellent. Corn conditions were only down 1 point to 71% good to excellent. The concern though is how fast this crop is maturing and not only the daytime heat but warmer overnight lows. I heard from many across Iowa, Illinois and Indiana last week that this speed up typically does not bode well for kernel fill, test weight and ultimately better than average yields. Corn already dented is now at 12% compared to only 6% on a five year average and 57% in the dough stage compared to only 37% average. Grain sorghum conditions also down 3 points to 49% good to excellent while spring wheat down 4 points to 74% good to excellent. Soybeans setting pods also ahead at 75% compared to 63% last year and 58% 5-year average.
Overnight, grains were steady to higher, corn finished 1 higher, soybeans 9 higher, KC and Chicago wheat 1 to 2 higher and MPLS wheat 5 higher.
France reduced their corn, barley and soft wheat production estimates by nearly 1 MMT for each. Germany’s wheat crop is expected to be down 25% from last year. Rumors of export restrictions by Black Sea countries, potential problems with quality of the Russian crop and the previously mentioned production reductions across the EU continue to support higher wheat prices.
USDA reported a private sale of 145,000 MT, 5.3 MBU, of new crop soybeans for unknown destinations and 179,000 MT, 7 MBU, of optional origin new crop corn for unknown destinations.
The heaviest rains over the next 7 days now centered in TX and the SE with 1+ inches still in the forecast for the ECB. The latest 6-10 day outlook now showing normal to above normal precipitation yet temperatures are still above normal North and below normal South.
September corn with support around $3.64 and resistance at $3.74, last week’s range. December corn with also a dime trading range last week from $3.78 to $3.88. 50% retracement from the high in May to the low in July is right at $3.90 with strong resistance up at $4. November soybeans tested the $9.20 resistance early last week but failed to punch through finding support now at $8.83. September KC wheat with a spike high last week at $5.97 ¼ and full retracement achieved, pulling back to find support at $5.64 and reaching a new high overnight. September Chicago wheat also breaking higher to $5.93 last week, support at $5.52.
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