Date: May 6th, 2019
Livestock futures were mostly lower again to end last week. Cattle futures continue to fall sharply into new recent lows while hog futures remain choppy but higher for the week. Cash feedlot trade last week mostly $3 to $5 lower than the week previous. Trade in the South got going by Tuesday from $121 to $123 live while trade in the North followed from $123 to $124 live and $194 to $200 on a dressed basis.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 05/03/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 207,900 51,600 38,000 297,500
Last Week 193,900 73,300 1,300 268,500
Year Ago 250,300 65,000 61,000 376,300
Compared to last week, steer and heifers sold in a wide range of steady to 7.00 lower, with some instances being quoted 10.00 to 12.00 lower on some of the lighter weight steers. Grass cattle demand has subsided as ranchers are taking stock of what is going on in Chicago. CME cattle futures continued to close in the red this week and all market participants are standing up and taking notice. The erosion of equity on the balance sheet the last couple weeks is enough to make one shudder at the thought.
For the week, Friday April 26th to Friday May 3rd, June Live Cattle -$1.62, August -$3.50, May Feeder Cattle -$6.80, August -$6.47, June Lean Hogs +$4.00, July +$2.22. Boxed Beef, Choice -$6.29 @ $227.36, Select -$7.20 @ $213.29.
Cattle slaughter from Friday estimated at 121,000 head, up 7,000 from the previous week and up 2,000 compared to a year ago. For the week, 670,000 head, the largest weekly total since October 2011, up 27,000 from the week previous and up 18,000 from a year ago. Beef production estimated at 537.6 million pounds last week compared to 516.5 the week previous and 519.6 last year. Year to date slaughter running 1.3% ahead of last year with beef production up 0.1%.
Hog slaughter from Friday estimated at 460,000 head, up 9,000 from the week previous and up 23,000 compared to a year ago. For the week, 2,382,000 head, up 41,000 from the week previous and up 58,000 from a year ago. Year to date slaughter 2.5% ahead of year ago with pork production up 2.3%.
Boxed beef cutout values lower on light demand and moderate offerings for a total of 107 loads sold.
Choice Cutout__227.36 -1.44, -6.29 for the week
Select Cutout__213.29 -1.79, -7.20 for the week
CME Feeder Index__141.22 -2.68
CME Lean Hog Index__83.02 -.21
Pork Carcass Cutout__82.01 -1.91
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__81.50 -.27
National Wtd Avg Live Price__61.94 +.25, Wtd Avg Carcass Base__78.94 -.06
June live cattle into a new 5-month low to end last week with support next around $112.50. May feeders hit a new contract low with support next near $132 then $130 and resistance up near $147. June lean hogs found support at 50-day moving average last week, now at 88.50 with resistance up near $93.80.
Grains were mixed last week, most of the pressure continues on the soy complex. Exports sales have been slow these past couple weeks and barge traffic is now stopped at St. Louis due to high water and ongoing flooding. USDA did announce a sale of 10.8 MBU of new crop soybeans to Mexico Friday morning. The wheat Quality KS tour reported strong yield estimates at 47.2 BPA, which was expected, compared to 38 last year and 40.2 BPA 5-year average.
The CFTC COT report for April 30th showed managed money or funds extending their short positions in soybeans and wheat while buying back some corn. Funds bought 15K contracts of corn from April 23rd to the 30th now short 306,700 contracts. They were sellers of nearly 20K soybean contracts now net short a new record at 148,526 contracts. KC wheat shows a new record short positon at 58,494 contracts.
For the week, Friday April 26th to Friday May 3rd, July Corn +$.09 ½, New Crop December +$.07, July Soybeans -$.24 ¾, New Crop November -$.23 ½, July KC Wheat -$.06 ½, September -$.05 ½, July Chicago Wheat -$.04 ½, September -$.03 ½, July MPLS Wheat +$.03 ¼, New Crop September +$.02, July Soybean Meal -$5.50/T, December -$4.90/T.
Overnight, corn, soybeans and wheat all gapped lower, but corn and wheat held last week’s lows which is important. Corn finished 5 to 13 lower, soybeans 16 to 25 lower and wheat finished 5 to 9 lower.
The sharply lower move was triggered by President Trump threatening to impose additional tariffs on China due to the slowing of negotiations and apparent backtracking by Chinese negotiators on some key issues. Recall that President Trump was originally going to hike tariffs on March 1, but pushed that off as progress was being made. The deadline is now set for this Friday to raise tariffs to 25% on $200 Billion of Chinese goods. Chinese negotiators are set to still come to the U.S. this week, although it sounds like their trip has been reduced from a few days to only one.
Expectations are for corn planting to be 25% complete, falling behind a year ago’s 39%. There continues to be pressure on the soybeans with corn and spring wheat planting behind pace, but again 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.
Heavy rains this week from the Southern Plains, Southeast and Western Corn Belt. The latest 6 to 10 day outlook showing above normal precipitation for the southern half of the U.S. with below normal in the PNW and below normal temps for most with above normal in the PNW and Southeast.
July corn contact low at $3.51 ½ back on April 25th with the next support at $3.42 ¼ then $3.36 from the continuously weekly chart, resistance up near $3.72. July soybeans down to a new contact low overnight at $8.17, May down to $8.04 ¾, breaking the nearby lows from last year and down to price not seen in over 10 years. July KC wheat with a contract low last week at $3.90 ½, holding so far with the first resistance up at $4.09 then near $4.40. July Chicago wheat new contract low last week at $4.26 with resistance up at $4.48 then $4.68.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700