Date: April 29th, 2019
Cash feedlot trade last week got going midweek in TX and KS at mostly $125 to $127 live. Peak to peak that is $1 higher than the week previous, but most of the volume reported would be considered at steady money. Trade in the North followed at mostly $127 live and $206 dressed which is steady to a few dollars lower than the week previous. Livestock futures overall took a big hit last week as the market expects lower cash trade moving forward.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 04/26/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 193,900 73,300 1,300 268,500
Last Week 199,400 86,400 45,400 331,200
Year Ago 234,500 58,100 3,600 296,200
Compared to last week, steers and heifers were uneven; 3.00 lower to 4.00 higher. Many markets early to mid-week were on the higher side, while later in the week markets followed the CME cattle complex in a downward trend. Even though markets were lower this week demand was good at reporting auctions this week. Marketing of cattle had a delay of up to a couple weeks in areas that were affected by a couple “bomb cyclones” as auctions are readying for their summer schedules. With auctions sales going to a biweekly sales routine, farmer/feeders and order buyers chased cattle suited for summer turn out hoping to fill pastures with any weight of cattle that is in the flesh condition for summer turnout, even some light 700 lb cattle in the right flesh condition.
For the week, Thursday April 18th to Friday April 26th, April Live Cattle -$3.97, June -$7.62, May Feeder Cattle -$7.57, August -$7.82, June Lean Hogs -$8.00, July -$7.10. Boxed Beef, Choice -$.66 @ $232.99, Select -$1.08 @ $219.41.
Cattle slaughter from Friday estimated at 114,000 head, down 1,000 from the previous week but matching a year ago. For the week, 643,000 head, up 1,000 from the week previous and up 15,000 from a year ago. Beef production estimated at 516.5 million pounds last week compared to 513.8 the week previous and 499.6 last year. Year to date slaughter running 1.2% ahead of last year with beef production down 0.1%.
Hog slaughter from Friday estimated at 451,000 head, up 15,000 from the week previous and up 1,000 compared to a year ago. For the week, 2,341,000 head, down 39,000 from the week previous and down 15,000 from a year ago. Year to date slaughter 2.2% ahead of year ago with pork production up 2.4%.
Boxed beef cutout values steady on light to moderate demand and offerings for a total of 93 loads sold.
Choice Cutout__232.99 +.06, -.66 for the week
Select Cutout__219.41 -.34, -1.08 for the week
CME Feeder Index__144.24 -.72
CME Lean Hog Index__83.73 +.33
Pork Carcass Cutout__84.27 +.55
IA-S.MN Wtd Avg Live Price__63.55 no comp, Wtd Avg Carcass Base__80.70 -1.58
National Wtd Avg Live Price__61.00 -.03, Wtd Avg Carcass Base__79.62 -1.33
April live cattle expire tomorrow, holding the near $124 support. June back out to a $9+ discount and a new 4-month low last week. The next area of support near $114 and $113 with resistance up at $120 then $123. May feeders higher trend broke last week, now below all the major moving averages, also into a new 4-month low. It held support near $143 last week with the contract low now in striking distance at $141.85. August also breaking down last week yet the higher trend from early December still intact with support at $151. June lean hogs pulling back the past couple weeks after hitting a contract high up at $99.82. Support next near $86 with resistance up at $94.50.
Grains were lower again last week with new contract lows in corn and Chicago wheat midweek and a small recovery to end the week. KC wheat continued lower though along with soybeans. Weather forecasts still showing wet conditions throughout the Midwest this week which follows some very cold temps over the weekend and even snow for many in the North.
There were rumors floating around of Argentina increasing grain/oilseed export taxes to raise capital which would likely lead to farmer hoarding their products off market as an inflation hedge and in turn be supportive to US exports. The US$ also had a key reversal lower on Friday which has been a steady increase since early 2018.
The COT report showed managed money through Tuesday continued to sell the grains with a new focus on the soy complex, -38.1k beans (net short -129.5k), -7.8k meal (net short -19.4k) and -16.7k oil (net short -50.6k). It was little lighter for corn than expected with funds -14.6k corn (net short -322.1k) and projected only 230K short heading into the weekend. Wheat was mixed with -4.9k Chicago SRW (net short -67.9k) and +622 KC HRW (net short -53.6k).
For the week, Thursday April 18th to Friday April 26th, May Corn -$.07 ¼, New Crop December -$.05 ½, May Soybeans -$.26 ¾, New Crop November -$.25 ¾, May KC Wheat -$.20 ¼, New Crop July -$.18 ¼, May Chicago Wheat -$.09 ¼, New Crop July -$.05 ¾, May MPLS Wheat -$.25 ¼, New Crop September -$.15 ¾, May Soybean Meal -$3.30/T, December -$4.20/T.
Overnight, corn, soybeans and MPLS wheat finished 2 to 5 higher with KC and Chicago wheat mixed and finishing steady to 1 lower.
Saudi Arabia purchased 620,000 MT or 22.8 MBU of milling wheat for delivery in July. We are still waiting for origins but it appears half could be from the U.S. with the balance coming from Germany and the Baltic States.
Planting delays in May will get more of a market response than in April. Expectations are for corn planting to be 17% complete nationwide with much of the progress made in the Western Corn Belt and little done in the East. This matches a year ago but compares to 27% average pace and 32% back in 2017. The areas of most concern now are the Dakotas, MN and MI. Don’t assume delayed corn or spring wheat acres will automatically shift to beans at these price levels, prevent plant may be the most lucrative alternative depending on your basis.
Heavy rains this week from the Southern Plains through the Corn Belt. The latest 6 to 10 day outlook showing above normal precipitation for all except the PNW with below normal temps still in the North and above normal from the West Coast to the Southeast.
Tuesday is first notice day for the May grain contracts, make sure to exit or roll all long positions today and shorts here soon with no daily limits and volume will begin to thin out. May corn new contact low at $3.42 ¼, support next at $3.36 then $3.30 from the continuously weekly chart, resistance up near $3.66 then $3.80. May soybeans also with a new contract low at $8.52 ½, support next near $8.10 and resistance up at $8.83. May KC wheat down to a new contract low overnight at $3.97 ¾, resistance up at $4.35. May Chicago wheat with resistance up at $4.65, and the contract low at $4.27 back in March. May soybean meal also a new contact low at $299.10 with resistance up near $306.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700