Date: May 6th, 2020
Tuesday’s futures trade was fairly quiet and uneventful for both livestock and grains. Outside markets were mixed but mostly supportive with equites higher and energies holding gains throughout the day. Cattle futures were mixed to mostly lower while lean hogs were triple digits lower. Beef and pork prices continue to scream higher as packers are trying everything possible to stay open and speed back up the chains. So far it has only been limited success as additional plants close with the first few trying to start back up this week. For many that have remained open, we are seeing the return of previously positive Covid and quarantined employees which is extremely good news. Beef and pork will continue higher until we find a price at which the consumer will no longer pay or kill capacity can increase. It won’t be just that easy to fix the current situation as the backlog of slaughter ready continues to grow.
Light cash feedlot trade already this week in NE and IA ranging from $95 to $107 live and $145 to $170 dressed which remains steady to slightly better than the past couple weeks. The Fed Cattle Exchange online auction will be held later this morning with 5,119 head consigned compared to last week’s 4,484 head of which 818 sold at $100 for next week delivery and $96.57 for 1-17 day delivery.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 5/4/2020
Total Receipts: 7,294 Last Week: 7,093 Last Year: 3,208
Compared to last week, steers under 550 lbs and heifers under 600 lbs steady to 5.00 lower, steer calves over 550 lbs and yearlings steers steady to 3.00 higher, yearling heifers steady.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 5/4/2020
Total Receipts: 11,307 Last Week: 10,151 Last Year: 4,896
Compared to last week: Feeder steers and heifers 1.00- 5.00 higher Calves lightly tested. Few steer calves sold steady to 5.00 higher. Few heifer calves steady to 3.00 lower.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 5/4/2020
Total Receipts: 2,139 Last Week: 2,089 Last Year: 2,289
Compared to last week: Steers unevenly steady to 3.00 higher. Heifers 4.00-6.00 higher. Quality good. Demand good. Slaughter cows steady to 3.00 higher. Slaughter bulls 2.00 higher.
Cattle slaughter from Tuesday estimated at 80,000 head, up 8,000 from last week but down 42,000 from last year. Hog slaughter from Tuesday estimated at 298,000 head, up 20,000 compared to last week but down 172,000 compared to a year ago.
Boxed beef cutout values sharply higher again on 126 loads sold and the Choice/Select spread coming together $15 yesterday.
Choice Cutout__428.82 +18.77
Select Cutout__410.54 +33.88
CME Feeder Index__119.59 +.68
CME Lean Hog Index__60.35 +.56
Pork Carcass Cutout__113.58 +5.77
IA-S.MN Wtd Avg Carcass Base__36.47 no comparison
National Wtd Avg Carcass Base__36.37 -.10
June live cattle into a new recent high on Monday at $89.72 with resistance next up around $92 and support from the 10-day and 20-day moving averages right around $85. May feeders still squeezing tighter yet holding a higher trend this past month with support around $115 and resistance up at $124. June lean hogs sharply higher since the contract low down at $41.50 in mid-April with resistance next up at $74.
Grains were also mixed yesterday, corn and soybeans the leader higher as record low temps are in the forecast for later this week in many parts of the ECB and corn planting pace 12% ahead of the 5-year average nationwide, some states 30%+ ahead. Wheat conditions overall improved this past week yet freeze damage is still being assessed across the Southern Plains. Cash grain movement remains light as producers are focused in the field and domestic demand is still off. Soybean processors are even starting to back off bids recently has the rush for meal has subsided. Exports do continue to remain strong, just not good enough to offset the loss of domestic demand especially for corn as ethanol production is running at half capacity. We should see that improve in the near term as states ease the stay at home orders.
Overnight, grains were mixed to weaker with corn and soybeans finishing steady to 1 lower while wheat finished 2 to 4 lower.
South Korea buying South American origin corn again overnight. No export sales announced by USDA this morning.
The Kansas Wheat Quality Tour was cancelled this year but Oklahoma released its production estimate yesterday of 96.5 MBU. If realized, that would be off 13.5 MBU from the 110 MBU crop harvested last year. Stats Canada will release its Planting Intentions report tomorrow. The next USDA crop report will be next Tuesday the 12th as the general expectations are bearish with further reductions in demand estimates.
Much below normal temps still in the forecast from the eastern half of the U.S. from Friday to Tuesday. The 6-10 day outlook showing above normal temps for the Southwest and still below normal for the eastern half of the U.S. with above normal precipitation for the West Coast and Southwest and below normal for the Northern Border States and Southeast.
July corn still holding the long term lower trend with the contract low down at $3.09, support next right around $3.00 and resistance at $3.24. July soybeans also holding a lower trend going back to January with the contract low at $8.18 ½. Support next down at $8.08 with resistance at $8.56. July KC wheat support being tested this week at $4.75 with the next down at $4.69 and resistance at $4.89. July Chicago wheat trending lower since mid-March with support next around at $4.95 and resistance around $5.30.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700