Date: June 10th, 2019
Lower livestock futures to end the week but feeders bounce higher off new contract lows midweek and fats off new recent lows. Cash feedlot trade in TX and KS was done mostly at $113 midweek which is another couple dollars lower than the week previous. There was some trade reported down at $110 to $111 also but hearing that was for delivery towards the end of the month. In the North, most trade done at $114 to $115 live and $184 to $185 dressed. Over the weekend, President Trump announced that the U.S. and Mexico had come to terms and no additional tariffs would be put in place this week. This should be supportive news for both cattle and hogs to start the week.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 06/07/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 164,000 30,300 12,100 206,400
Last Week 91,200 22,400 18,100 131,700
Year Ago 217,300 35,500 6,100 258,900
Compared to last week, steers and heifers sold 1.00 to 5.00 lower. Warmer weather across the Plains this week brought the swather out of the barn and into the field as hay producers are quick to get in the fields as soon as it dries up enough. Temperatures in the 90+ range has made it seem like many areas are moving from early spring to late summer all in one fell swoop. Market reporters noted this week’s offering were feeling the effects of the first hot spell of the year. Auction Receipts lagged behind a year ago by 50K as analysts are scrutinizing the number of placements in May and June due to the unusually large placement number in April.
For the week, Friday May 31st through Friday June 7th, June Live Cattle -$1.55, August +$.22, August Feeder Cattle +$4.12, September +$3.27, June Lean Hogs -$3.07, July -$2.57. Boxed Beef, Choice -$.90 @ $222.31, Select -$.77 @ 206.92. Pork Carcass Cutout +$.40 @ $83.08.
Cattle slaughter from Friday estimated at 119,000 head, down 2,000 from the week previous but matching the total from a year ago. For the week, 662,000 head, up 80,000 from the week previous and up 1,000 from a year ago. Beef production estimated at 525.9 million pounds last week compared to 463.8 the week previous and 526.8 last year. Year to date slaughter running 1% ahead of last year while beef production is unchanged.
Hog slaughter from Friday estimated at 473,000 head, up 2,000 from the week previous and up 55,000 compared to a year ago. For the week, 2,417,000 head, up 289,000 from the week previous and up 149,000 compared to a year ago. Pork production estimated at 517.6 million pounds last week compared to 456.2 the week previous and 475.6 last year. Year to date slaughter running 2.3% ahead of year ago with pork production up 2.7%.
Boxed beef cutout values steady on moderate demand and light offerings for a total of 79 loads sold.
Choice Cutout__222.31 +.06, -.90 for the week
Select Cutout__206.92 -.24, -.77 for the week
CME Feeder Index__131.84 -.11
CME Lean Hog Index__80.30 -.26
Pork Carcass Cutout__83.08 -.17, +.40 for the week
IA-S.MN Wtd Avg Carcass Base__76.03 -.62
National Wtd Avg Carcass Base__75.63 unchanged
June live cattle hit a new 12-month low last Friday at $106.50 with the contract low down at $105.05. Delivery begins this week with cash trade still $6+ premium. The August contract hit a new contract low on May 31st at $102.30 with resistance up near $106 then $110. August feeders into a new contract low to end the month of May at $132.15 with support next at $131.87 then $128.57 with resistance up at $140.30 then $143.30. June lean hogs continue to fall into a new recent low at $78.27, contact low at $72.20 back on 2/20/19, with resistance up at $86 then $93.
Grains were also lower to end the week and most lower for the week as the widespread and heavy rains from May seem to have fallen apart now that we have entered June. This was the first lower weekly close for corn in over a month. Some planting progress was most certainly made this past week but we still have many crops behind, acres under water, some replant to catch up on and some prevent plant that will be taken. The Mexico news may not be as supportive for grains as corn was said to be left of the retaliatory initial list by Mexico already. Funds have a net long position in corn but still net short wheat and soybeans.
For the week, Friday May 31st through Friday June 7th, July Corn -$.11 ¼, December -$.10, July Soybeans -$.21 ½, November -$.21 ¾, July KC Wheat -$.24, September -$.22 ¾, July Chicago Wheat +$.01 ½, September -$.00 ¼, July MPLS Wheat +$.16 ¾, September +$.16 ¼, July Soybean Meal -$9.00/T, December -$8.50/T.
Overnight, grains were lower with corn finishing 3 lower, soybeans 5 to 6 lower and wheat 3 to 7 lower. Again, good progress was made over this past week but the markets will be paying close attention to this afternoon’s crop progress, especially in SD and the ECB of IL, OH and IN where there range of corn planted was from 31% to 45% as of June 2nd. The expected planting pace nationwide is coming in from 80% to 85% complete, at 85% that still leaves some 14 million acres unplanted. Conditions will be released for the first time this crop year with expectations of 60% to 65% rated good to excellent compared to 79% a year ago. Soybeans planted expected to be near 55% complete up from 39% a week ago.
USDA June Monthly Crop Report to be released tomorrow at 11 am CST.
-US 18/19 Corn ending stockpiles at 2.123 BBU compared to May’s 2.095 BBU.
-2019 US Corn production at 14.25 BBU, off from May’s 15.03 BBU, yield expected to be at 172.4 BPA, down from the 176.0 BPA, ending stocks forecast at 1.917 BBU vs. 2.485 BBU in May.
-US 18/19 Soybean ending stockpiles at 1.00 BBU compared to May’s 995 MBU
-2019 US Soybean production at 4.12 BBU, off from May’s 4.15 BBU, yield at 49.0 vs. 49.5 BPA and ending stocks at 983 MBU vs. May’s 970 MBU.
-US 18/19 Wheat ending stockpiles at 1.120 BBU compared to May’s 1.127 BBU
-2019/20 all Wheat production at 1.883 BBU compared with May’s 1.897 BBU. Overall winter wheat output is expected at 1.250 BBU, which includes 765 MBU HRW, 261 MBU SRW and 244 MBU white. 19/20 ending stocks are forecasted at 1.118 BBU off from May’s estimate at 1.141 BBU.
-18/19 World Corn stocks estimate of 325.4 MMT vs. May’s 325.94 MMT
-19/20 World Corn stocks forecast at 304.9 MMT down from 314.71 MMT
-18/19 World Soybean stocks estimate of 113.3 MMT vs. May’s 113.2 MMT
-19/20 World Soybean stocks forecast at 112.9 MMT down from 113.09 MMT
-18/19 World Wheat stocks estimate of 274.7 MMT vs. May’s 274.98 MMT
-19/20 World Wheat stocks forecast at 290.0 MMT down from 293.0 MMT
This week’s forecast calling for heavy rains in the WCB and 1+ inches over the entire Midwest. The latest 6 to 10 day outlook showing above normal precipitation from the Rockies through the Corn Belt, below normal in the PNW and TX with below normal temps centered on the Midwest, above normal on the West Coast and Gulf Coast.
July corn topping out so far near the long term resistance as well as the December contract, $4.39 for July and $4.54 for December. There is still a gap remaining on the July contract from $4.07 to $4.04 ¾. Soybeans also testing but unable to push through resistance for July around $8.95 and November around $9.20. July soybeans filled the top gap with the next from $8.37 ½ to $8.31 ½ and good support around $8.20. July KC filling the gap left in late May with support at $4.40 and resistance up at $4.97 then $5.07. July Chicago wheat still holding a higher trend with support around $4.80 and resistance up near $5.30.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700