Date: July 22nd, 2019
Cash feedlot trade started down in TX at $111 live which is $1 lower than the week previous and up in the Western Corn Belt at steady with a week ago at $114 to $116 live and $182 to $185 dressed. KS trade followed right along with TX at $111 live as well, $1 lower than the week previous while NE traded $113 to $114 live at $182 to $183 dressed. Cattle futures flipped from an a lower early morning start to hold small gains while lean hogs scored triple digit gains to end the week.
For the week, Friday July 12th through Friday July 19th, August Live Cattle -$.87, October -$1.47, August Feeder Cattle -$1.62, September -$2.75, August Lean Hogs +$3.22, October +$5.70. Boxed Beef Choice +$.62 @ $213.42, Select -$.09 @ $189.51. Pork Carcass Cutout +$6.88 @ $78.53.
Cattle on Feed as of July 1st reported at 11.5 million head, 102% vs. a year ago. Placements in June at 1.76 million head, 98%, and Marketings at 1.95 million head, 97% vs. a year ago. All data close to the pre-report estimates. Marketings 1.2 points above expectations. One less business day in June 2019 vs 2018 makes actual daily marketing rate closer to 3% larger than year ago. Mildly friendly report versus the expectations. USDA also released the July Mid-Year Cattle Inventory. All cattle and calves fractionally lower from previous year, beef cows and heifers that have calved were unchanged from year prior. Beef replacement heifers down 4%, Milk replacement heifers down 2%, “Other” heifers were up 5%. The 2019 calf crop down slightly from year previous. Expansion is over for the moment and numbers stable. Note, the words “liquidation/contraction” are not being used.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 07/19/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 149,400 59,200 217,200 425,800
Last Week 135,700 77,700 121,100 335,500
Year Ago 158,300 78,700 5,400 242,400
Compared to last week, steers and heifers sold uneven; 3.00 lower to 3.00 higher. Receipts this week were somewhat curtailed as summer returned to the heart of the country. Dangerous heat indexes spread from the Southwest to the Northeast and everywhere in between mid to late week, making it difficult for both man and beast in its aftermath. Farmers and ranchers have been very focused on moisture needed after last year’s momentous drought that encompassed a vast area of grazing acres. Even though this spring has been extremely wet in places, some areas do need a drink now as heat indexes rise into triple digits. Feedyards were sure hoping that last week’s uptick in futures would follow through this week, however negotiated cash fed cattle showed weakness.
Cattle slaughter from Friday estimated at 118,000 head, up 2,000 compared to the week previous but down 2,000 compared to last year. For the week, 651,000 head, down 4,000 from the week previous but up 16,000 compared to last year. Beef production last week estimated at 520.2 million pounds compared to 521.4 the week previous and 513.2 million pounds last year.
Hog slaughter from Friday estimated at 465,000 head, up 5,000 from the week previous and up ago 32,000 compared to a year ago. For the week, 2,303,000 head, down 107,000 from the week previous and down 75,000 compared to a year ago.
Boxed beef cutout values steady on Choice and higher on Select on moderate to good demand and moderate offerings for a total of 90 loads sold.
Choice Cutout__213.42 +.08, +.62 for the week
Select Cutout__189.51 +.90, -.09 for the week
CME Feeder Index__138.65 -1.35
CME Lean Hog Index__72.40 +.88
Pork Carcass Cutout__78.53 +1.93
IA-S.MN Wtd Avg Carcass Base__75.01 +.81
National Wtd Avg Carcass Base__72.48 +.24
August live cattle holding the $107 support level last week with the next down at $106 and resistance up at $109. August feeders pulling back from the $143.75 high back on July 11th with resistance next up at $146 and support at $136. August lean hogs on slow moving higher trend since the recent low at $73.95 back on June 24th with resistance near the $85 level.
Grain rebounded Friday led by the soy complex as we ended a very hot week across most of the country. It appeared more like a recovery or short covering rally on Friday as grains were hit hard all week. U.S. weather still the main driver with cooler temps and some moisture in the forecast for this week. Rumors that China would be cutting tariffs and buying additional Ag products also helped support the rally, yet nothing has come of the flash headlines yet.
For the week, Friday July 12th through Friday July 19th, September Corn -$.23 ½, December -$.23 ½, August Soybeans -$.11 ¾, November -$.12 ¼, September KC Wheat -$.27 ¼, December -$.27, September Chicago Wheat -$.20 ½, December -$.21 ½, September MPLS Wheat -$.13 ½, December -$.13 ¾. August Soybean Meal -$3.60/T, December -$4.00/T.
Overnight, corn gave back most of Friday’s gains finishing 5 to 6 lower, soybeans 1 lower and wheat 1 to 3 lower. Temps have dropped considerably across the country with scattered showers from the Rockies through the Eastern Corn Belt over the weekend. Some heavy rains in pockets but most were very welcome after last week’s heat.
South Korea purchased 55,000 MT or 2.2 MBU or optional origin corn with Taiwan, Jordan and Japan tendering for wheat this week.
Brazil’s second crop corn harvest is progressing well ahead of pace while reports indicated their soybean crop is showing the lowest protein level in over 4 years which could hurt their demand from China and may be the cause for Chinese companies seeking tariff exclusion to secure U.S. new crop soybeans.
Rains this week in the Southwest, Gulf Coast and East Coast with scattered ½ inch to 1 inch in the North and the Great Lakes. The latest 6 to 10 day outlook pulling back in above normal temps from the Southwest across the Northern Plains and into the Corn Belt with below normal for the Southeast. Below normal precip in the forecast for the PNW and East Coast with above normal from TX up to the Great Lakes.
September corn still choppy with support at $4.13 and resistance up at $4.60. The December contract looks similar with support at $4.20 and resistance up at $4.65. August soybeans with support at $8.70 and resistance up at $9.18. The November contract has support at $8.90 with resistance at $9.36. September KC holding a lower trend with support at $4.30 and resistance up at $4.72. September Chicago wheat breaking the higher trend that was in place since mid-May with the $5 support taken out last week, next support level down at $4.75 and resistance up near $5.30. August Soybean Meal with good support holding at $304 and resistance up at $317.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com pete@loewenassociates.com matt@loewenassociates.com
866-341-6700