Date: April 22nd, 2020
Livestock futures remain under pressure as chainspeeds continue to reduce and/or slaughter plants shutdown due to COVID-19 hot spots within employees at the plants. Cash trade this week could be very limited again or near zero as all kill slots are taken from forward contracting obligations. The Fed Cattle Exchange online auction will hold its weekly sale later this morning after postponing to Friday last week. This week there are 4,671 head consigned compared to last week’s 5,778 head of which 898 head sold at $105 live for delivery 1 to 17 days out. Based off last Friday’s close that is still a positive basis of $9.50 for any hedged fats.
Ahead of this Friday afternoon’s monthly USDA cattle on feed report, the average pre report trade estimate as of April 1 on-feed at 95% of the year ago month. Placements onto feedlots during March are seen falling to 80% of the year earlier level, and marketings during March are seen rising to 112% of the year earlier month levels.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 4/20/2020
Total Receipts: 5,097 Last Week: 3,084 Last Year: 5,243
Compared to last week, steers under 550 lbs and over 700 lbs steady to 3.00 higher, 550 to 700 lbs steers steady, heifer calves and yearling heifers steady, except a two load lot of replacement quality 800 lb heifers sharply higher .
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 4/20/2020
Total Receipts: 6,015 Last Week: 3,935 Last Year: 7,715
Compared to last week: Feeder steers under 850 lbs 4.00-8.00 higher; over 850 lbs steady to 2.00 higher. Feeder heifers 6.00-10.00 higher. Steer calves under 500 lbs not well tested; over 500 lbs 5.00-10.00 higher. Heifer calves, 500-600 lbs 6.00-8.00 higher, other weights not fully established. Demand moderate to good. Quality average, end attractive.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 4/20/2020
Total Receipts: 1,936 Last Week: 800 Last Year: 2,175
Compared to last week: Steers 5.00-8.00 higher. Heifers mostly steady to 3.00 higher. Quality good. Demand good. Light weight slaughter cows 7.00 higher. Heavy slaughter cows mostly steady. Slaughter bulls 9.00-13.00 higher.
Cattle slaughter from Tuesday estimated at 84,000 head, down 15,000 from last week and down 37,000 from last year. Hog slaughter from Tuesday estimated at 354,000 head, down 83,000 compared to last week and down 124,000 compared to a year ago.
Boxed beef cutout values sharply higher yesterday but only 78 loads sold.
Choice Cutout__259.85 +11.47
Select Cutout__248.82 +10.83
CME Feeder Index__119.63 +1.75
CME Lean Hog Index__44.77 +.22
Pork Carcass Cutout__69.95 +3.27
IA-S.MN Wtd Avg Carcass Base__price not reported due to confidentiality
National Wtd Avg Carcass Base__32.73 +.96
Equities, energies and gold all higher so far with the next aid package announced at $438B. April live cattle contract with support around 90.50 and contract low down at $83.82, resistance first at last week’s high at $97.67 then at $102. April feeders with support at $112.40, contract low at $103.95 and resistance up around $123. June lean hogs contract low at $41.50, May down to $35.02, with resistance up at $53.70.
Grains were under pressure most of the day yesterday with new contract lows for both corn and soybeans. Soybeans and KC wheat were able to rebound late in the trading session and hold small gains into the close. The nearby and expiring crude oil contract settled up $46/barrel at $9.06 after the unprecedented negative value the previous day. May crude oil dipped to negative $40/barrel on Monday which is the first time in history a commodity has ever been valued below zero. This meant that a buyer would receive the oil and a check for taking it similar to your local trash service that is paid to remove the waste from your property. Yesterday the rest of the deferred contracts were sharply lower along with the entire energy complex as storage capacity is in essence full, supply cannot just be shut down without capping wells and demand of course has vanished during this pandemic.
Overnight, corn and soybeans were firm with wheat mixed to mostly lower. Corn finished 4 to 6 higher, soybeans 2 to 5 higher and wheat steady to 2 lower.
USDA announced a private sale of 198,000 MT or 7.3 MBU of soybeans for delivery to China. This was an old crop purchase and appears to be slated for shipment in the August – September time frame. There are some rumors floating around that China may be seeking up to 8 cargoes of soybeans and others talking about China increasing state reserves for corn, soybeans and cotton. South Korea continues to be very actively buying corn but this past week as been mostly for South American origin compared to a few weeks ago when it was mostly optional origin. Based off values paid then, some still could ship from the U.S.
Heavy rains expected in parts of the Corn Belt heading into this weekend. The 6-10 day outlook showing above normal temps for the western half of the US, below normal from the ECB into New England with above normal precipitation in the Northeast and below normal from the West Coast through to the Southeast.
May corn new contract low yesterday at $3.01 which matches the spot low from September 2016. Support next is down at $2.96 ¾ from September 2009 then $2.90 from December 2018. May soybeans new contract low at $8.08 ¼ yesterday with support next down at $7.80 ½, the spot low from last May. May KC wheat with support around $4.70 and resistance up around $5.07 to $5.11. May Chicago wheat with support at $5.24 ½ and resistance up around $5.64.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700