Date: May 8th, 2019
Small rebound for cattle and grain futures yesterday as most are very oversold currently. Lean hog futures did finish lower but came back from triple digit lower prices following the lock limit down day on Monday. Long term support held for the front month June live cattle as cash feedlot trade got going in TX and KS at $120 live, $2 to $3 lower than last week’s trade. Some small volume trade in the North at $194 to $196 dressed and $122 live.
Joplin Regional Stockyards Feeder Cattle-Carthage, MO
Livestock Weighted Average Report 5/6/19
Receipts: 3,208 Last Week: 5,042 Last Year: 6,423
Compared to last week, steers and heifers 3.00 to 7.00 lower. Demand and supply moderate to light.
Oklahoma National Stockyards Feeder Cattle-Oklahoma City, OK
Livestock Weighted Average Report 5/6/19
Receipts: 4,896 Last Week: 9,687 Last Year: 8,525
Compared to last week: Feeder steers steady to 4.00 lower. Feeder heifers 1.00-3.00 lower. Steer calves 2.00 lower. Heifer calves mostly steady, instances 2.00 higher. Demand moderate to good. Quality average. More unweaned calves showing up and these selling to limited demand.
Cattle slaughter from Tuesday estimated at 121,000 head, up 1,000 from last week and compared to a year ago. Hog slaughter from Tuesday estimated at 472,000 head, down 2,000 from last week but up 9,000 from last year.
Boxed beef cutout values sharply lower on light to moderate demand and moderate the heavy offerings for a total of 168 loads sold.
Choice Cutout__223.87 -3.13
Select Cutout__211.83 -2.15
CME Feeder Index__136.67 -.74
CME Lean Hog Index__82.63 -.19
Pork Carcass Cutout__85.67 +2.78
IA-S.MN Wtd Avg Live Price__N/A, Wtd Avg Carcass Base__80.10 -.27
National Wtd Avg Live Price__61.54 +.74, Wtd Avg Carcass Base__79.34 +.07
June live cattle holding the support just below $112 with resistance up near $115. May feeders hit a new contract low Monday at $133.67 with support next near $132 then $130 and resistance up near $146. June lean hogs found support near $85.30 but traded nearly a $6 range yesterday, resistance up at $93.80.
Spring wheat and corn still way behind normal planting pace and both led the way higher yesterday. It may not look like much with the close, but corn is more than a dime higher than Sunday night’s low after the announcement of additional tariffs coming soon from the U.S. administration on $200 Billion in Chinese goods. The supporting factor right now is the U.S. weather as rains continue this week, ongoing flooding across a good chunk of the Midwest and a wetter forecast from the models yesterday. This same flooding though as impacted export traffic with barge movement stopped at St. Louis due to high water. USDA will update supply and demand estimates this Friday with the average trade estimates expecting slightly higher ending stocks for corn, soybeans and wheat. Stats Canada data out yesterday not much of a surprise with total wheat stocks at 15.7 MMT -4.3% from a year ago, Durum wheat at 3.9 MMT +18%, canola at 10.0 +10.5%, corn 8.3 MMT -5.2% and soybeans 2.9 MMT +4.3%.
Overnight grains were mixed with corn finishing 2 to 3 lower, soybeans 1 higher and wheat steady to 2 lower.
Chinese customs data showed April Soybean imports at 7.64 MMT, up 55% over the 4.92 MMT in March and up 10.7% from last April. Accumulated soy imports over the Jan-Apr period were 24.39 MMT, -7.9% from a year ago.
With a big crop report Friday morning and uncertainty surrounding the US/China trade negotiations, hard to imagine too much of a move in either direction before Friday, but the markets are heavily short heading into the report, and we could see some short covering. Friday’s USDA report will offer the first “official” USDA balance sheet for 2019/20 marketing year both U.S. and world along with U.S. wheat production estimates.
USDA CROP REPORT EXPECTATIONS
2019/20 All Wheat production at 1.910 BBU compared to 1.884 BBU last year. The total includes 1.277 BBU winter wheat (767 MBU HRW, 277 MBU SRW and 232 MBU White), implies roughly a 630 MBU spring wheat crop.
18/19 US corn ending stocks at 2.060 BBU vs. 2.035 BBU in April
19/20 US corn ending stocks expected to be 2.131 BBU
18/19 US soybean ending stocks at 920 MBU vs. April’s 895 MBU
19/20 US soybean ending stocks expected to be 910 MBU
18/19 US wheat ending stocks at 1.1 BBU vs. 1.087 BBU in April
19/20 US wheat ending stocks expected to be 1.060 BBU
18/19 world Corn ending stocks at 316.00 MMT vs. 314.01 MMT in April
19/20 world Corn ending stocks at 304.7 MMT
18/19 world Soybean ending stocks at 108.50 MMT vs. 107.36 MMT in April
19/20 world Soybean ending stocks at 109.6 MMT
18/19 world Wheat ending stocks at 275.9 MMT vs. 275.61 MMT in April
19/20 world Wheat ending stocks at 277.4 MMT
Argentine Corn production at 48.1 MMT up from April’s 47.0 MMT
Brazil Corn production at 96.7 MMT up from April’s 96.0 MMT
Argentine Soybean production at 55.7 MMT up from April’s 55.0 MMT
Brazil Soybean production at 116.9 MMT compared to last month’s 117.0 MMT
Heavy rains continue in the Southeast until mid-next week with another 1-3 inches expected for the rest of the major growing areas. The latest 6 to 10 day outlook showing above normal precipitation for the Southwest and below normal centered over the Corn Belt with below normal temps for most, above normal in the PNW.
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 Monday at $8.16 ¾, May down to $8.04 ½, breaking the nearby lows from last year and down to a 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. July Meal holding the $293 support so far this week with resistance up at $310.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700