Date: April 6th, 2020
More pressure on the front months for cattle futures, deferred live cattle even finished higher last Friday. Meat demand as now dwindled after the mass rush to grocery stores the past few weeks. Cash feedlot trade was reported mid-week at $112 live, down $8 from the week previous with some cleanup trade by the end of the week as low as $105. Dressed trade in the North was down $15 to $175. Processing plants for both pork and beef slowing down this past week as meats fill up cold storage, plant employees are staying home and spread out to slowdown the chains.
The number of Americans filing claims for unemployment benefits surged to more than 6.6 million last week, breaking a record high for the second week in a row as more states and cities enforced strict stay-at-home measures in an attempt to stop the coronavirus pandemic.
Claims between the period of March 21 and March 28 blew past the previous week’s record of 3.3 million, bringing the two-week total just under 10 million.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 04/03/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 175,100 21,500 500 197,100
Last Week: 87,200 22,000 4,200 113,400
Year Ago: 233,200 92,000 2,000 377,200
Compared to last week, feeder steers sold 5.00 to 17.00 lower while feeder heifers sold 7.00 to 15.00 lower in the North Central and South Central areas, with the larger declines coming later Tuesday into Wednesday. Some auctions on Thursday indicated values from 20.00 to 27.00 lower. Steer and heifer calves in the Southeast traded uneven; steady to 5.00 higher early in the week to steady to 5.00 lower later in the week. Demand was reported as moderate to good in auctions this week as buyers did want to procure cattle, just at lower price levels. Some backgrounders who sold yearlings this week did not recoup first cost of those calves. They will go back to the drawing board and see what the next step is. Ranchers have many things to worry about this time of year, but typically market price levels is not one of them and prices are tracking 10.00 to 20.00 lower than a year. Grazing calves are usually in demand this time of year as grass is coming on with a vengeance with warmer days and nights, spurring enough growth that a cow doesn’t have to chase that newfound green forage.
For the week, Friday March 27th through Friday April 3rd, April Live Cattle -$12.62, June -$8.57, April Feeder Cattle -$12.35, May -$12.82, August -$12.67, April Lean Hogs -$18.22, June -$15.92. Boxed Beef, Choice -$22.40 @ $230.44, Select -$26.54 @ $215.84. Pork Carcass Cutout -$16.42 @ $57.37.
Cattle slaughter from Friday estimated at 107,000 head, down 10,000 from the week previous and matching last year. For the week, 626,000 head, down 50,000 from the week previous and down 1,000 from last year. Beef production estimated at 519.3 million pounds last week compared to 561 million the week previous and 503 last year. Beef production year to date is up 4.8% with slaughter up 2.5%.
Hog slaughter from Friday estimated at 483,000 head, down 6,000 compared to the week previous but up 63,000 compared to a year ago. For the week, 2,618,000 head, down 136,000 compared to the week previous but up 154,000 compared to a year ago. Pork production estimated at 563.4 million pounds last week compared to 592.4 the week previous and 528.5 last year. Pork production year to date is up 5.6% with slaughter up 5.1%.
Boxed beef cutout values lower on light demand and light offerings for a total of 110 loads sold.
Choice Cutout__230.44 -2.20
Select Cutout__215.84 -6.28
CME Feeder Index__121.07 -5.02
CME Lean Hog Index__60.65 -2.43
Pork Carcass Cutout__57.37 -1.84
IA-S.MN Wtd Avg Carcass Base__43.84 +.21
National Wtd Avg Carcass Base__42.88 -1.70
Equities higher overnight, US$ higher, gold higher and energies lower. April live cattle into a new contract and 10-year low last Friday at $88.32. Support below that down around $80 with resistance up at $102.20. April feeders also into a new contract low at $106.55, a price not seen in the spot month since October 2010. Support next at $101 with resistance up around $123. April lean hogs into a new contract low at $40.22, a price not seen since 2002.
Over in the grains, a second Chinese purchase of U.S. corn wasn’t even enough to lift futures higher. President Trump tweeted Thursday saying he had been in talks with Saudi Arabia and Russia hoping to talk both into drastically cutting oil production. Russian President Putin on Friday said they would like to see joint action on world oil markets, and they are ready to act with the United States. He also suggested the 10 million barrel per day production cut is needed and that they should be made from 1Q 2020 levels. Crude Oil got down below $20 per barrel last week but finished the week above $28 with gas futures down to $.46 per gallon 2 weeks ago and ending last week above $.70. Wheat was able to hold gains as a massive cold front moved into the Southern Plains and dry conditions continue in Eastern Europe, Ukraine and Western Russia.
For the week, Friday March 27th through Friday April 3rd, May Corn -$.15 ¼, July -$.15, May Soybeans -$.27 ¼, July -$.25 ¾, May KC Wheat -$.14 ¾, July -$.13, May Chicago Wheat -$.22, July -$.12 ¼, May MPLS Wheat -$.12 ½, July -$.10, May Soybean Meal -$19.90/T, July -$16.40/T.
Overnight, grains were mixed with corn and soybeans trading lower while wheat added to recent gains. Corn finished 2 to 3 lower, soybeans 3 to 4 lower and wheat 5 to 10 higher.
USDA monthly supply and demand estimates to be updated this Thursday. Dry conditions persist in a few areas of major wheat exporters. Stock market higher with hope that the Covid-19 infections and fatalities may finally be leveling off as NY, by far the hardest hit state, sees it first day of lower numbers. OPEC has delayed meetings this week to discuss oil production cuts. No daily export sales reported by USDA this morning.
No hazardous weather expected this week but flooding still a major concern up and down the Miss River and the eastern side of the Dakotas. The 6-10 day outlook showing well below normal temps across the U.S. with above normal precipitation.
May corn into a new contract low overnight at $3.27 breaking multi-year support at $3.30 with the next at $3.18 then right around $3.00. May soybeans breaking lower last week after range bound trade for 2 weeks with support at $8.45 then $8.21 and resistance up at $8.87 then $9.00. May KC wheat with support at $4.60 and resistance at $4.97 then $5.05. May Chicago wheat with support around $5.40 and resistance at $5.87, the recent high from last Monday. May soybean meal sharply lower after peaking at $336 back on March 24th with support next at $296.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700