Date: May 18th, 2020
Thank you Duane and good morning. Lets’ take a look at last week’s trade in the livestock and grain markets, and see what’s going on here today.
Cash feedlot traded midweek at $110. Tyson paid up to $115 in Kansas on Thursday. Texas mandatory price reporting showed some $117.50. Nebraska dressed trade ranged from $170-$185. By the end of the week though, cash trade continued to climb up to $120 live and $190 dressed for some additional light volume on Friday. The weekly unemployment report added another nearly 3 million new claims bringing the COVID-19 total up to 36.5 million people and talk now that we may hit nearly 25% unemployment before getting the economy back up and running. COVID-19 continues to spread though with now over 11 million tested, 1.5 million positive cases, and over 90K dead here in the U.S.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 05/15/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 171,000 75,200 35,400 281,600
Last Week: 182,100 83,700 29,300 295,100
Year Ago: 148,900 29,100 16,500 194,500
Compared to last week, steers and heifers sold 1.00 to 5.00 higher. Feeder cattle buyers in the sales arenas this week came to the market with moderate to good demand this week; the best demand by far remains on those light calves suitable for backgrounding. Seller interest has improved somewhat this week some ranchers continue to resist the current market.
For the week, Friday May 8th through Friday May 15th, June Live Cattle +$2.35, August -$2.37, May Feeder Cattle -$3.17, August -$5.87, June Lean Hogs -$3.82. Boxed Beef, Choice -$26.56 @ $434.32, Select -$29.93 @ $419.06. Pork Carcass Cutout -$6.38 @ $110.12.
Cattle slaughter from Friday estimated at 91,000 head, up 6,000 from the week previous but down 28,000 from last year. For the week, 499,000 head, up 47,000 from the week previous but down 163,000 from last year.
Hog slaughter from Friday estimated at 375,000 head, up 40,000 compared to the week previous but down 73,000 compared to a year ago. For the week, 2,103,000 head, up 328,000 compared to the week previous but down 249,000 compared to a year ago.
Boxed beef cutout values sharply lower with 125 loads sold Friday.
Choice Cutout__434.32 -16.60, -26.56 for the week
Select Cutout__419.06 -18.34, -29.93 for the week
CME Feeder Index__124.80 +.85
CME Lean Hog Index__68.70 -.17
Pork Carcass Cutout__110.12 -3.67, -6.38 for the week
IA-S.MN Wtd Avg Carcass Base__36.88 +.47
National Wtd Avg Carcass Base__37.11 +.05
Global equities higher, US futures higher and energies higher overnight with crude back above $30/barrel for the first time since mid-March. June live cattle holding a higher trend since hitting the new contract low at $76.60 back on April 6th. Support is right around $92 with a gap from $91.62 to $89.47 and resistance at $98.85 then the $100 level. May feeders also holding a higher trend with the contract low from April 6th at $103.62. The recent high is up at $130.85 from May 7th with support at $123.50 then $121. June lean hogs on a lower trend since peaking at $66.95 back on May 4th which has now breached the longer term higher trend that was in place since mid-April. Nearby support is at $55 next.
Range bound trade continues for the fall crops after an overall bearish crop report this past week from USDA. Planting pace continues to be well ahead of normal for most areas with slow advancement expected last week and wet conditions in the Northern Corn Belt could push prevent plant acres higher than a year ago. Wheat is leaking lower as the markets continue to eye weather over Europe and Russia. Funds or managed money continues to hold large short positions in both corn and MPLS spring wheat while flipping from net short to now net long soybeans.
For the week, Friday May 8th through Friday May 15th, July Corn unchanged, December -$.03 ¾, July Soybeans -$.12, November -$.10, July KC Wheat -$.27 ¾, July Chicago Wheat -$.21 ¾, July MPLS Wheat -$.09 ¾, July Soybean Meal -$3.30/T.
Overnight, grains were mixed with fall crops higher but wheat still losing ground as moisture in the nearby forecast for both HRW and SRW areas. Corn finished the overnight 1 to 2 higher, soybeans 5 to 6 higher and wheat 2 to 3 lower.
Tensions between the U.S. and China continue to build yet it also a roller coaster ride with the back and forth rhetoric. Friday’s mood was very negative as the U.S. appeared to take steps once again to limit Chinese access to advanced computer chips. Today’s mood at least sounds better though with China asking trading firms and food processors to boost inventories of grains and oilseeds ahead of a possible second wave of COVID-19 cases.
Much above normal temps for the Northern Plains this week along with heavy rains for the Eastern Corn Belt. The 6-10 day outlook showing normal to above normal temps across the U.S. except for over the Rockies with normal to above normal precipitation for all expect in the PNW.
July corn trying to break to the long term lower trend with a new recent high last week at $3.24. The contract low is down at $3.09, nearby support at $3.18 with resistance up around $3.40. July soybeans in a choppy 30 cent range this past month with support at $8.30 and resistance up around $8.60. July KC wheat crashing to new recent lows at $4.47 last week with support next down at $4.27 and resistance around $4.80 then $4.90. July Chicago wheat testing the recent lows from mid-March around $4.95, roughly 75 cents off the highs from March 25th.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700