Date: July 8th, 2019
Beef weekly export sales were above average while pork sales dipped below but shipments were strong with 8,100 MT of the 27,000 MT total going to China. Cattle futures held triple digit gains Friday while lean hogs were triple digits lower. Most of the cash feedlot trade last week was done before the Independence Day break. $109 live in the South which is steady with the week previous and still premium to the nearby August contract helping to attract some buying in the futures. In the North, trade was seen initially on light volume at $111.50 live then moved up to $113 to $114, $178 to $180 dressed, steady to $2 better than the week previous.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 07/05/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week N/A 27,200 39,200 66,400
Last Week 156,200 35,700 46,100 238,000
Year Ago 17,000 34,300 29,000 80,300
Compared to last week, feeder steers and heifers were not well tested nationwide this week, however a firmer undertone was noted at a very limited number of auctions.
For the week, Friday June 28th through Friday July 5th, August Live Cattle +$2.65, October +$2.65, August Feeder Cattle +$1.97, September +$2.00, July Lean Hogs +$.02, August +$1.05. Boxed Beef Choice -$1.99 @ $217.67, Select -$.76 @ 194.80.
Cattle slaughter from Friday estimated at 118,000 head, down 2,000 from the previous week but up 1,000 from last year. For the holiday shortened week, 573,000 head, down 92,000 from the week previous but up 3,000 from a last year. Beef production estimated at 454.7 million pounds last week compared to 525.7 the week previous and 460.8 last year. Year to date slaughter running 1.2% ahead of last year while beef production is up .1%.
Hog slaughter from Friday estimated at 444,000 head, down 8,000 from the week previous and down 6,000 compared to a year ago. For the week, 2,072,000 head, down 312,000 from the week previous but up 87,000 compared to a year ago. Pork production estimated at 442.2 million pounds last week compared to 510.8 the week previous and 412.3 last year. Year to date slaughter running 3.2% ahead of year ago with pork production up 3.9%.
Boxed beef cutout values weak to lower on light demand and moderate to heavy offerings for a total of 109 loads sold.
Choice Cutout__217.67 -1.58, -1.99 for the week
Select Cutout__194.80 -.56, -.76 for the week
CME Feeder Index__133.21 -1.19
CME Lean Hog Index__72.82 -.40
Pork Carcass Cutout__73.17 +1.69, -.67 for the week
IA-S.MN Wtd Avg Carcass Base__N/A
National Wtd Avg Carcass Base__65.82 -1.32
August live cattle gapping higher last Friday in a new recent high with support near $104 and resistance up at $110. August feeders breaking out of the long term lower trend this past week with support at $130.95, the new contract low from the week previous, and resistance up at $141 then then $146. July lean hogs into a new recent low at $71.77 but closing above the nearby support level with the contact low down at $70.05 and resistance up near $84.
Weekly grain export sales were very disappointing for corn but as expected for wheat and soybeans. Corn was able to climb back to steady and trade mixed shortly after the old school hard open for the grains last Friday. Wheat stayed right alongside the corn futures but soybeans remained under double digit pressure. The CFTC Commitment of Traders Report was not published last Friday, managed money corn positions should still be net long 100K+ contracts heading into the weekend.
For the week, Friday June 28th through Friday July 5th, September Corn +$.14, December +$.10 ¾, August Soybeans -$.28 ½, November -$.28 ½, September KC Wheat -$.16 ¼, December -$.18, September Chicago Wheat -$.12 ¼, December -$.13, September MPLS Wheat -$.21, December -$.19 ¼, August Soybean Meal -$9.50/T, December -$10.50/T.
Overnight, grains were higher led again by corn with a gap higher move. Corn finished 3 to 4 higher, soybeans and wheat steady to 2 higher.
Day 7 of the KS Wheat Harvest Report, posted July 7th, by the KS Wheat Commission and KAWG. “Rain continued to be hit or miss over the holiday weekend. Many Kansas wheat farmers spent their Independence Day in the wheat field. Some areas in south central Kansas have finally wrapped up their harvest, but there are still a lot of acres left to cut in the rest of the state. While some areas in northwest Kansas have begun, they have been chased out of the fields by scattered storms. Localized rainfall amounts range from zero to more than 8 inches across the state. There is still green wheat in some areas as well.”
Export inspections or shipments out later this morning. Corn exports have been weak the past few weeks with only 2 months left in the marketing year and over 550 MBU to meet the current USDA estimate at 2.2 BBU. Soybean shipments to China have picked up recently but it still may not be enough to meet the current export estimate at 1.7 BBU with over 330 MBU left to ship. Grain sorghum shipments have also picked up to China recently but are still estimated 120 MBU lower than a year ago at 85 MBU, 64.5 MBU shipped to date. Wheat marketing year just started June 1 and weekly shipments so far keeping pace at 17 MBU per week.
USDA will update crop progress and conditions later this afternoon. Corn and soybean conditions are not the hot topics with expectations for unchanged to maybe a point a two better.
SovEcon lowered their forecast for the 2019/20 Russian wheat crop from over 80 MMT down to 76.6 MMT and exports from 37.6 MMT to 33 MMT. USDA in June projected the crop at 78 MMT and exports at 37 MMT.
Light scattered rains over this past weekend. This week’s forecast calling for 1 to 4 inches from NE up through ND and in the Southeast with less than 1 inch throughout the Midwest. The latest 6 to 10 day and 8 to 14 day outlooks showing above normal temps and below normal precip for most areas, above normal precip still showing in the Southeast and PNW.
September corn nearly 30 cents higher from the lows back on June 28th, the massive reversal lower, with support holding near $4.13, December support holding near $4.20. Resistance is up near $4.60 for September and $4.70 for the December contract. The higher trend for soybeans from mid-May was taken out last week, now showing a lower nearby trend since mid-June with support for the August contact next at $8.60, November at $8.80, resistance up at $9.15 then $9.30 for August and $9.30 then $9.50 for the November contract. September KC wheat breaking below the month long sideways trend and below all major moving averages with a new recent low at $4.31, support next at $4.12 with resistance up at $4.60. September Chicago wheat breaking the higher trend that was in place since mid-May. Support holding so far near the $5 mark with resistance up at $5.28. August Soybean Meal on a lower trend with support at $304 and nearby resistance up at $309 then $329.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700