Date: March 23rd, 2020
Livestock futures finished the week mostly higher as some separation continues from the outside market pressure. Cash feedlot trade was $105 live to start the week but by midweek, trade was reported at $113 live. That is $3 higher than the week previous and based on the April Live Cattle close Wednesday, a positive basis over $20. Beef prices continue to climb higher as well as pork prices as grocery stores try to keep shelves stocked and restaurants try to stay in business by offering curb side pickup or delivery. Friday’s Cattle on Feed report was neutral to friendly coming in as expected with 100% on feed compared to a year ago, only 92% placements and 105% marketings.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 03/20/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 59,000 10,200 16,500 85,700
Last Week: 198,200 22,000 1,900 222,100
Year Ago: 256,100 90,300 28,800 375,200
Compared to last week, steers and heifers sold 5.00 to 10.00 lower with some auctions being 12.00 to 15.00 lower. Auction receipts this week are the lightest non-holiday week for this report since the current format was instituted in 2002.
For the week, Friday March 13th through Friday March 20th, April Live Cattle +$3.07, June +$.22, March Feeder Cattle +$7.72, April +$6.22, April Lean Hogs +$5.20, June -$3.35. Boxed Beef, Choice +$45.61 @ $253.75, Select +$38.19 @ $240.17. Pork Carcass Cutout +$10.20 @ $80.04.
Cattle slaughter from Friday estimated at 109,000 head, up 8,000 from the week previous but down 5,000 from last year. For the week, 653,000 head, up 20,000 from the week previous and up 17,000 from last year. Beef production estimated at 541.6 million pounds last week compared to 525.0 million the week previous and 508.4 last year. Beef production year to date is up 4.0% with slaughter up 1.9%.
Hog slaughter from Friday estimated at 490,000 head, down 2,000 compared to the week previous but up 36,000 compared to a year ago. For the week, 2,790,000 head, up 142,000 compared to the week previous and up 287,000 compared to a year ago. Pork production estimated at 600.0 million pounds last week compared to 569.5 the week previous and 536.8 last year. Pork production year to date is up 5.1% with slaughter up 4.7%.
Boxed beef cutout values higher on Choice and lower on Select on light to moderate demand and moderate to heavy offerings for a total of 147 loads sold.
Choice Cutout__253.75 +3.88
Select Cutout__240.17 -.89
CME Feeder Index__121.38 -.37
CME Lean Hog Index__62.20 +.86
Pork Carcass Cutout__80.04 +1.11
IA-S.MN Wtd Avg Carcass Base__56.58 +.54
National Wtd Avg Carcass Base__56.12 +.05
Equities down overnight with stimulus bills stalled in Congress over the weekend. The FED took surprising action before the market opened stating it would purchase an unlimited amount of Treasury’s and mortgage-backed securities in order to support the financial market. The Fed said it would buy assets “in the amounts needed” to support smooth market functioning and effective transmission of monetary policy. The Fed had previous set a $700 billion limit for asset purchases. Gold is sharply higher, the US$ sharply lower and energies slightly higher.
April live cattle with the contract low down at $91.07 and resistance up at $105.18. March feeders contract low at $108.50 with resistance up at $128. April lean hogs contract low at $52.12 with resistance up at $66 then $68.25.
Grains were mixed to end the week, mostly higher expect for corn. Corn futures continue to be under pressure as energy values continue to slide lower and ethanol plants slow or shut down. China finally stepping in with its first purchase of US corn in almost exactly a year as well as a purchase of new crop HRW. Wheat was the most impressive last week as rumors began than Russia and Ukraine could possibly curb exports, EU logistics could be impacted and decreased exports along with Argentina developing a program that could quarantine vessels up to 2 weeks coming in from the EU and Southeast Asia.
For the week, Friday March 13th through Friday March 20th May Corn -$.22, July -$.19, May Soybeans +$.13 ¾, July +$.08 ¾, May KC Wheat +$.37 ½, July +$.34, May Chicago Wheat +$.33 ¼, July +$.28 ¾, May MPLS Wheat +$.13, July +$.11 ½, May Soybean Meal +$25.70/T, July +$13.40/T.
Overnight, wheat and soybeans continued their comeback as corn stays closing tied to the energy market. Corn finished the overnight steady to 1 higher, soybeans 9 to 14 higher and wheat 10 to 16 higher.
China’s soybean meal futures trading limit higher overnight as many crushers have now shut down due to a shortage of soybeans and disrupted exports from South America. Soybean harvest in Brazil is now 70% complete.
Wet and cold conditions were prominent across most major growing regions through the weekend. Heavy rains continue across the Ohio River Valley this week. The 6-10 day outlook showing above normal temps across the Plains and into the Southeast and below normal on the West Coast with above normal precipitation east and below normal west.
May corn contract low at $3.45 ¼ with support next at $3.30 and resistance up at $3.57. May soybeans contract low at $8.21 with resistance next at $8.85. May KC wheat breaking the lower trend with support at $4.50, recent low down at $4.20 and resistance next at $4.93 ½. May Chicago wheat also breaking the lower trend with support at $5.25, recent low at $4.91 ¾ and resistance at $5.68. May soybean meal sharply higher with support at $311 and resistance next up around $335.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700