Date: March 30th, 2020
Cash feedlot trade in a range from $116-$122 live starting last Wednesday compared to the top end at $113 the week previous. Most of the volume traded this past week was at $119 to $120 live and $190 dressed. Livestock futures have disconnected some from the equity trade but not of course from the economic impacts from the spread of Covid-19. Grocery store demand skyrocketed the past couple weeks in which beef prices shot higher. As consumers have now filled freezer space, hamburger may still continue to move but steaks have stalled without the mass restaurant sales and many trying to keep personal finances in check. The record large 3 million claiming unemployment last week turned the livestock markets from limit higher days to limit lower. At least 27 states and many countries have enacted stay at home orders.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 03/27/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 87,200 22,000 4,200 113,400
Last Week: 59,000 10,200 16,500 85,700
Year Ago: 258,700 68,700 2,000 329,400
Compared to last week, steers and heifers sold 8.00 to 15.00 higher. Auction prices this week rebounded heartily and recovered most if not all the losses incurred last week. The supply of feeders was light again this week and not near what is considered normal for this time of year. Some ranchers saw an opportunity to market cattle with higher moves. The sales that did occur in the Plains states consisted of several loads of cattle that ranchers really wanted to move a week or two earlier, but had not occurred due to the global volatility of financial markets. Demand for feeders was reportedly good to very good at markets that did have sales and some impressive prices were reported at some locations. Slaughter cow prices skyrocketed early this week at auctions nationwide. Demand for boneless lean ground beef continued to move higher as cow plants needed product to move through the marketing chain this week to fill ground beef orders place by retailers. With most restaurants nationwide either closed or only filling carry out orders, the grocery stores have had trouble finding enough protein products to fully stock their cases. Consumers are staying in and eating all their meals at home as never before, but the uncertain nature of consumers spending will remain for a while.
For the week, Friday March 20th through Friday March 27th, April Live Cattle +$2.30, June -$.10, April Feeder Cattle +$1.77, May +$2.67, April Lean Hogs -$3.12, June -$3.70. Boxed Beef, Choice -$.91 @ $252.84, Select +$2.21 @ $242.38. Pork Carcass Cutout -$6.25 @ $73.79.
Cattle slaughter from Friday estimated at 117,000 head, up 8,000 from the week previous and up 10,000 from last year. For the week, 676,000 head, up 23,000 from the week previous and up 60,000 from last year. Beef production estimated at 561.0 million pounds last week compared to 541.6 million the week previous and 496.7 last year. Beef production year to date is up 4.8% with slaughter up 2.6%.
Hog slaughter from Friday estimated at 489,000 head, down 1,000 compared to the week previous but up 25,000 compared to a year ago. For the week, 2,754,000 head, down 36,000 compared to the week previous but up 226,000 compared to a year ago. Pork production estimated at 592.4 million pounds last week compared to 600.0 the week previous and 542.1 last year. Pork production year to date is up 5.4% with slaughter up 5.0%.
Boxed beef cutout values steady to weak on light to moderate demand and moderate to heavy offerings for a total of 124 loads sold.
Choice Cutout__252.84 -.73
Select Cutout__242.38 +.21
CME Feeder Index__130.44 +1.94
CME Lean Hog Index__66.46 +.29
Pork Carcass Cutout__73.79 -3.82
IA-S.MN Wtd Avg Carcass Base__58.57 -.60
National Wtd Avg Carcass Base__58.07 -.77
Equities mixed overnight with the Dow mini futures trading in a range from 300 points lower to 300 higher, currently higher. US$ higher this morning, gold and crude lower.
April live cattle settled at their daily limit 4 days last week, 2 days limit higher and ended with 2 days limit lower. The contract low is down at $91.07 and last week’s high at $110.65. April feeders now the front month, 3 days of limit moves last week with the contract low at $108.10 and last week’s high at $134.27. April lean hogs started last week gapping higher and tested resistance just shy of $68 with the contract low down at $52.12.
Grains ended the week fairly quiet, which has not been the case for some time. Wheat and soybeans continue to lead the way higher as corn remains stuck near its lows. Russia has announced curbing exports for at least 60 days, U.S. export sales have picked up recently for corn, grain sorghum and wheat. South America continues to the primary supplies of soybeans but is struggling with not only normal logistically issues but now travel restrictions in many areas which does include local produce and agricultural goods. Energy markets continue to control corn futures though with crude oil trading from $20 to $25 per barrel last week, gas futures from $.37 to $.60 per gallon and ethanol too expensive to blend near $.90 per gallon. Most ethanol plants have either cut production or even completely idled production over this past week.
For the week, Friday March 20th through Friday March 27th May Corn +$.02 ¼, July +$.02 ¼, May Soybeans +$.19, July +$.20 ½, May KC Wheat +$.17 ¾, July +$.19, May Chicago Wheat +$.32, July +$.21 ½, May MPLS Wheat +$.16, July +$.15 ¾, May Soybean Meal -$2.10/T, July +$5.30/T.
Overnight, grains were mixed with wheat and soybeans continuing the charge higher while corn remains held back as energies are lower again today. Corn finished 1 lower, soybeans 5 to 6 higher and wheat 1 to 3 higher. Beyond the crashing demand, crude lower again as Russia and Saudi Arabia continue the price war battle as neither are backing down on production increase pledges starting April 1st.
USDA announced a private sale of 285,000 MT or 10.5 MBU of new crop soybeans sold to Mexico this morning.
USDA will give us their first official new crop acreage estimate tomorrow at 11 am along with a Quarterly Grain Stocks update. Unfortunately, the NASS survey for the report was before the big increase in US Covid-19 infections and the world plunge in crude oil prices which most certainly may have changed the minds of many producers as corn is stuck near its lows and soybeans bottomed out mid-month and now back with the range traded a month ago. The average pre report trade estimates are as follows…
US 2020 Corn acres at 94.33 million, 89.7 last year
US 2020 Soybean acres at 84.87 million, 76.1 last year
US 2020 All Wheat acres at 44.98 million, 46.16 last year
March 1 Corn stocks at 8.125 billion bushels, 8.61 last year
March 1 Soybean stocks at 2.24 billion bushels, 2.73 last year
March 1 Wheat stocks at 1.43 billion bushels, 1.593 last year
Flooding concerns up and down the Miss River this week with heavy rains in the Southeast again over the next couple days. The 6-10 day outlook showing below normal temps in the Northern Plains and dipping into the Midwest with above normal precipitation in the South and East and below normal along the West Coast.
May corn contract low at $3.32 with support next at $3.30 and resistance up at $3.57. May soybeans contract low at $8.21 with resistance near $9. May KC wheat with support at $4.83 and resistance at the recent highs from January at $5.11 ¾. May Chicago wheat now over $.80 higher from the recent low back on March 16th with support at $5.63 and resistance at the recent high from January at $5.90 ¾. May soybean meal sharply higher since mid-March with support at $311 and resistance tested but holding so far just above $336.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700