Date: July 29th, 2019
Light cash feedlot trade in NE and Western Corn Belt midweek at $114 to $117 live, dressed at $183 to $185 which is steady to $2 higher than the week previous. TX and KS traded $112 live, $1 higher than the week previous Friday afternoon. Livestock futures all scored gains for the week and all into new recent highs with corn backing off and cash trade firm.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 07/26/2019
RECEIPTS: Auctions Direct Video/Internet Total
This Week 131,200 62,500 113,800 307,500
Last Week 149,400 59,200 217,200 425,800
Year Ago 141,600 67,700 100,700 310,000
Compared to last week, steers and heifers sold steady to 3.00 higher with some Northern Plains auctions reported 4.00 to 8.00 higher. Demand was good to very good this week as calves and yearlings were sought after. Most of the offerings were coming off summer grass and were heavier than normal given the abundance of rainfall this spring and early summer. Grazing conditions may be elongated somewhat this year due to that abundance of grass with the runs of yearlings that happen ahead of the Labor Day holiday. Ranchers have been ecstatic to see greener pastures this week compared to last year at this time when several producers were feeding hay to keep their cow herd together. Forage harvest has continued right along this year after a lengthy period of wetter weather at the beginning of the season. For those along the major river ways the desire for more moisture sounds irrational as the Mississippi River along the banks of St. Louis just this week finally fell below flood stage for the first time since March.
For the week, Friday July 19th through Friday July 26th, August Live Cattle +$1.05, October +$1.40, August Feeder Cattle +$3.75, September +$4.30, August Lean Hogs +$2.55, October +$.52. Boxed Beef Choice -$1.25 @ $212.17, Select -$1.17 @ $188.34. Pork Carcass Cutout +$5.85 @ $84.38.
Cattle slaughter from Friday estimated at 119,000 head, up 1,000 compared to the week previous but down 1,000 compared to last year. For the week, 651,000 head, up 2,000 from the week previous and up 11,000 compared to last year. Beef production last week estimated at 521 million pounds compared to 517.8 million the week previous and last year. Beef production year to date running .3% ahead of last year with cattle slaughter up 1.3%.
Hog slaughter from Friday estimated at 459,000 head, up 5,000 from the week previous and up 148,000 compared to a year ago. For the week, 2,362,000 head, up 70,000 from the week previous and up 361,000 compared to a year ago. Pork production last week estimated at 497.7 million pounds compared to 484.7 million the week previous and 414 million pounds last year. Pork production year to date is up 4.2% from last year with slaughter up 3.5%.
Boxed beef cutout values weak to lower on light to moderate demand and offerings for a total of 98 loads sold.
Choice Cutout__212.17 -.40, -1.25 for the week
Select Cutout__188.34 -.84, -1.17 for the week
CME Feeder Index__139.58 +2.16
CME Lean Hog Index__78.86 +1.63
Pork Carcass Cutout__84.38 +.50
IA-S.MN Wtd Avg Carcass Base__83.15 -2.99
National Wtd Avg Carcass Base__79.75 -3.60
August live cattle into a new recent high last week and breaking the $109 barrier but stopping right at the 38% Fibonacci retracement level. The next resistance level is up at $110 with support at $107. August feeders into a new 2-month high on Friday with resistance next up at $146 and support at $139. August lean hogs on higher trend since the recent low at $73.95 back on June 24th with resistance next up near $89 and support at $82.
U.S. weather still seen as benign/bearish for the grains which is providing the most pressure recently. The world weather highlight was another round of record setting heat across Europe. Wheat and fall crop production estimates continue to fall both there and into Russia. CFTC data showed funds selling more corn than expected for the week ending July 23rd but still net long over 108K contracts. Estimates through Friday show funds net long only 86K contracts. Funds remain net short wheat, but not heavy sellers last week as some had expected. China has given the go ahead on some tariff free imports of U.S. corn, sorghum, cotton and pork along with 3 MMT of soybeans for government purchases and another 3.8 MMT for private buyers.
For the week, Friday July 19th through Friday July 26th, September Corn -$.16 ¼, December -$.11 ¼, August Soybeans -$.18 ¼, November -$.18 ¼, September KC Wheat -$.08, December -$.09 ½, September Chicago Wheat -$.06 ½, December -$.09 ¼, September MPLS Wheat -$.04 ¾, December -$.05 ¾. August Soybean Meal -$8.10/T, December -$7.80/T.
Overnight, grains rebounded from a lower open and held small gains with corn and soybeans finishing 3 higher, wheat 2 to 6 higher.
It was a quiet news weekend. Still no confirmations of additional sales to China. Updated weather models will be watched closely with a lot a Corn Belt corn acres hitting pollination now through early August. USDA will update crop progress and conditions after the close today. As of last week, only 35% of the crop was silking compared to 78% last year and 66% for a 5-year average.
Scattered rains across the country are expected this week with 1”+ in eastern KS to the Gulf and in the Southeast. The latest 6 to 10 day outlook showing above normal temps west and normal to below normal east with above normal precip from the Rockies up into the Northern Corn Belt and below normal in the South.
September corn down into a new recent low at $4.12 overnight with support next at $3.96 and resistance up at $4.30. The December contract still holding above the $4.20 support line with resistance up at $4.36. August soybeans with support at $8.70 and resistance up at $9.18 as the chart shows a coiling or price consolidation during the month of July, lower highs with higher lows. The November contract looks similar with support at $8.90 and resistance at $9.36. September KC holding a lower trend with support around the $4.30 area and resistance up at $4.72. September Chicago on a lower trend this month with support at $4.87 and resistance up near $5.30. August Soybean Meal into a new 2-month low with support next at $295 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