Date: April 27th, 2020
Cattle futures finished mixed again last Friday but mostly lower for the week. Cash feedlot trade very minimal as kill slots are at a minimum with only 469K head slaughtered last week compared to pre pandemic levels of 600 to 650K. TX and KS both reported live sales at $100, down $3 from the week previous but a wide range from $93 to $105. Dressed trade also in a wide range from $148 to $160 in NE. April 1 Cattle on Feed as expected at 95% but friendlier March placements at 77% and marketings at 113% vs. a year ago. The 5-week total now for unemployment up to 26 million new claims, 4.4 million new claims added last week.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 04/24/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 158,100 60,400 4,400 222,900
Last Week: 98,800 49,400 47,000 195,200
Year Ago: 193,900 73,300 1,300 268,500
Compared to last week, steer and heifers sold uneven; from 2.00 lower to 2.00 higher. Feeder cattle continue to back up on ranches as some producers continue to shake their head and wonder what will happen next. However, some have had a huge dose of reality and have moved on by selling cattle at lower prices; certainly not what they wanted to do. Grazing calves have started to see their demand wane this week as turnout dates have come and gone. Bigger feeders seem to have stabilized and found some footing. A backlog of fed cattle at this level will be impossible to eliminate in a timely fashion resulting in fed supplies remaining above slaughter capacity for several months. Anecdotes of fed cattle being pulled ahead for slaughter by two to three weeks around the beginning to middle of February have now disintegrated to being two to three weeks behind. That is what happens when daily slaughter for the five-day workweek averages 85K compared to 120K plus (30 percent reduction).
For the week, Friday April 17th through Friday April 24th, April Live Cattle -$9.67, June -$3.67, April Feeder Cattle +$.27, May -$1.82, August -$2.00, June Lean Hogs +$8.25. Boxed Beef, Choice +$54.38 @ $293.37, Select +$51.82 @ $279.02. Pork Carcass Cutout +$17.35 @ $77.48.
Cattle slaughter from Friday estimated at 83,000 head, down 4,000 from the week previous and down 31,000 from last year. For the week, 469,000 head, down 33,000 from the week previous and down 173,000 from last year. Beef production at 384.9 million pounds last week compared to 413.9 million the week previous and 512.8 last year. Year to date beef production +.3% compared to a year ago with slaughter now -1.9%.
Hog slaughter from Friday estimated at 361,000 head, down 64,000 compared to the week previous and down 88,000 compared to a year ago. For the week, 1,995,000 head, down 253,000 compared to the week previous and down 352,000 compared to a year ago. Pork production last week at 428.6 million pounds compared to 483.4 the week previous and 504.3 last year. Year to date pork production +3.4% compared to last year with hog slaughter +3%.
Boxed beef cutout values sharply higher all week on low volume, Friday 70 loads sold.
Choice Cutout__293.37 +9.08
Select Cutout__279.02 +6.13
CME Feeder Index__119.48 -.93
CME Lean Hog Index__47.72 +1.44
Pork Carcass Cutout__77.48 +1.11
IA-S.MN Wtd Avg Carcass Base__34.21 -2.64
National Wtd Avg Carcass Base__34.20 -.77
Equities higher overnight, energies lower. April live cattle into a new contract low on Friday at $81.45, the lowest spot price since 2009 with support right around $80. April feeders expire later this week. Both the April and May contracts have been consolidating or squeezing together over the past couple weeks. May has support at $115 then $111 with resistance up at $120.85 then $124. June lean hogs contract low at $41.50 earlier this month and showing some solid strength on the charts since with resistance next up at $57.15 which is the April high.
New lows last week for corn and soybeans but both held those lows to end the week as wheat was the leader lower on Friday now back to testing nearby support levels. Weekly export sales were average while daily sales towards the end of the week picked up. Spring planting continues yet many areas still wet and cool.
For the week, Friday April 17th through Friday April 24th, May Corn -$.06 ½, July -$.06 ¼, May Soybeans -$.00 ¼, July -$.02 ¾, May KC Wheat -$.04, July -$.02, May Chicago Wheat -$.06 ¾, July -$.03 ¼, May MPLS Wheat -$.07 ¾, July -$.06 ¼, May Soybean Meal -$.50/T, July -$.50/T.
Overnight, grains were lower with corn 4 to 6 lower, soybeans steady to 3 lower and wheat 2 to 4 lower. Soybeans were firm most of the overnight but pulled lower early this morning.
Russian grain quota for the 2nd quarter was set at 7 MMT. The Ag Ministry announced they will suspend grain exports until July 1 only after the grain it has declared for the quota has been shipped. Saudi Arabia over the weekend purchased a total of 655,000 MT or 24 MBU of wheat from multiple origins.
Much above normal temps dominate this week’s forecast from the West Coast into the Southern Plains with heavy rain in the Southeast. The 6-10 day outlook showing above normal temps for the southern half of the US, below normal only in the Great Lakes and Northeast with above normal precipitation across most of the county.
May corn contract low last week at $3.01, which matches the spot low from September 2016, support next down at $2.96 ¾ and first resistance up around $3.25. May soybeans with a new contract low last week also at $8.08 ¼. Support next at $7.95 then $7.80 with first resistance at $8.48 ¾. May KC wheat back to testing support at $4.69, the 50-day moving average with resistance at $4.82. May Chicago breaking into a new recent low overnight at $5.20 ¾, support next at $5.08 and resistance at $5.46.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700