Date: April 1st, 2020
Quite the crazy day for cattle markets with equites lower, boxed beef posting a record breaking one-day move lower, yet futures rallied shortly after the noon hour and closed triple digits higher to close out the month of March. So far the only Covid-19 related slowdown, not shutdown, is taking place at a JBS packing plant in PA. Canada has had at least 1 packing plant shutdown so far this week. Only very light cash feedlot trade so far this week at $122 live, $2 higher than last week on Monday followed by some $180 dressed trade in the North which is $10 lower than last week. The Fed Cattle Exchange online auction will be held later this morning with another impressive lineup of 4,696 head consigned compared to last week’s 5,885 head of which 2,451 sold from $115 to $120 live.
Sale barns seeing volume pick back up this past week but prices in general so far this week are mixed to lower.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 3/30/2020
Total Receipts: 6,918 Last Week: 1,795 Last Year: 5,654
Compared to a light test last week, steer and heifer calves and yearlings steady to 7.00 lower. Demand moderate to good, supply moderate to heavy. Several new crop calves in the offering along with the weaned calves and loads of yearlings.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 3/30/2020
Total Receipts: 7,369 Last Week: 1,310 Last Year: 7,405
Compared to last week: Feeder steers and heifers 4.00-10.00 lower. Grazing cattle along with light weight weaned calves 2.00 to 3.00 lower. Demand light to moderate.
Cattle slaughter from Tuesday estimated at 119,000 head, down 4,000 from last week and down 3,000 from last year. Hog slaughter from Tuesday estimated at 493,000 head, down 5,000 compared to last week but up 18,000 compared to a year ago.
Boxed beef cutout values sharply lower on light demand and light to moderate offerings for a total of 104 loads sold.
Choice Cutout__243.15 -7.82
Select Cutout__228.96 -9.18
CME Feeder Index__131.10 -1.47
CME Lean Hog Index__65.15 -.41
Pork Carcass Cutout__65.04 -5.67
IA-S.MN Wtd Avg Carcass Base__55.55 -.65
National Wtd Avg Carcass Base__53.63 -.82
Equities lower overnight with the Dow mini futures down over 800 points, US$ higher, gold higher while crude is steady to higher and gas down another nickel. April live cattle left a gap from $104.25 to $104.10 with another down at $97.10 to $95.10. The contract low is down at $91.07 and last week’s high at $110.65. April feeders also with a gap above from $123.32 to $124.27 and below from $116.35 to $114.12 with the contract low at $108.10 and last week’s high at $134.27. April lean hogs into a new contract low yesterday at $52.10 with support next around $50 then $48.92, the spot low back in 2018.
Over in the grains it was USDA report day with the first official estimate of 2020 acres and a quarterly stocks report. It was a mixed report with corn acres estimated at nearly 97 million compared to the pre report estimate at 94.3 million. All wheat acres at 44.655 million compared to nearly just under 45 million estimated prior to the report. Soybean acres at 83.51 compared to 84.86 average trade estimate. Grain sorghum right at the estimate at 5.82 million acres and cotton 1 million above the average trade estimate at 13.7 million. Corn and soybeans of course significantly higher than a year ago due to the mass prevent plant. This data is taken from producer survey information collected the first couple weeks of March, prior to the massive spreading of Covid-19 and collapse in the energy markets. A lot has changed in the matter of just a couple weeks as the markets fully understand as well. I am not shocked by the initial corn number but also feel this will be the highest corn acreage number for the year. Corn did press lower, New Crop December into a new contract low, but quickly came back to finish with only fractional to minor losses. Soybeans and wheat continued to push higher as logistics around the world causing some disruptions for supply of soybeans and wheat.
The quarterly stocks report was friendly for corn at 7.95 billion bushels in the U.S. as of March 1 compared to average trade estimate at 8.125. This means we have used nearly 3.45 billion bushels of corn last quarter compared to 3.32 the same time a year ago. Soybean stocks at 2.25 billion bushels were slightly higher than the average trade estimate, but not concerning with meal demand very strong now domestically. Wheat stocks at 1.412 billion were 20 million bushels under the average trade estimate which is friendly along with the recent surge in domestic and world demand.
Overnight, grains starting this month and 2nd quarter lower with corn 2 to 4 lower, soybeans 7 to 12 lower and wheat 3 to 8 lower. Grain related news fairly light this morning as we brace for what is expected to be more terrible health news over the next couple weeks along with keeping a close eye on economic news such as unemployment moving forward.
Brazil soybean production estimates continue to trend lower due to the late dry conditions as corn estimates are trending higher. Argentina continues to deal with delayed and disruptive transportation trying to get harvest grain to ports and processors. China announced another truck of illegally transported piglets found to have African swine fever. Russian President Putin will meet with other government officials today to discuss the grain export quotas proposed by the agriculture ministry as Egyptian grain inspectors will resume origin grain inspections only after travel restrictions end. No private export sales announced by USDA this morning which is disappointing.
Flooding concerns up and down the Miss River this week and now expanded to cover almost all of MN. The 6-10 day outlook showing above normal temps from the Rockies to the East Coast and below normal along the West Coast with above normal precipitation for all except in the Southwest and FL.
May corn contract low at $3.32 with support next at $3.30 and resistance up at $3.57. New Crop December corn hit a new contract low overnight. May soybeans stuck in a trading range from near $8.70 to the next nearby resistance just shy of the $9 mark since March 24th with contract low from mid-March down at $8.21. May KC wheat also range bound this past week with support at $4.80 and resistance at $5.05. May Chicago testing support around $5.60 overnight with resistance at the 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