Date: May 27th, 2020
Livestock futures were triple digits higher after the long 3-day weekend with feeders limit higher. Chainspeeds continue to increase for both cattle and hogs with higher cash prices traded again last week. The cattle on feed report was also friendly to end last week. Futures look to continue to improve so long as slaughter rates continue to get back to 100% capacity. Light volume cash feedlot trade so far this week steady with last week in KS at $110 to $120 live, NE $112 live and $190 dressed and IA from $174 to $190 dressed. The Fed Cattle Exchange online auction will be held later today with 1,164 head consigned compared to last week’s 2,782 head of which none sold.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 5/26/2020
Total Receipts: 4,590 Last Week: 5,610 Last Year: 3,262
Compared to last week, steer calves less than 500 lbs traded steady to weak while heavier weights and yearlings traded steady to 3.00 higher. Heifer calves less than 550 lbs traded 2.00-4.00 higher with heavier weights steady to firm. Demand was good on a heavy supply.
Cattle slaughter from Monday estimate at 4,000 head and Tuesday estimated at 106,000 head, up 7,000 from last week but down 12,000 from last year. Cattle slaughter last week up to 555,000 head, up 56,000 from the week previous but still down 92,000 from a year ago. Weights have risen but not drastically as formula cattle fill the majority of the slots still and have kept current whereas the cash seller still have very limited slots available and weights have risen the most. Packers are still paying higher cash values and a massive positive basis though for those that were hedged.
Hog slaughter from Monday estimated at 2,000 head and Tuesday at 405,000 head, up 8,000 compared to last week but down 72,000 compared to a year ago.
Boxed beef cutout values continue to pull back sharply with a huge volume day yesterday at 222 loads sold as restaurants begin to open up nationwide and secure orders.
Choice Cutout__385.49 -11.25
Select Cutout__360.02 -14.16
CME Feeder Index__126.44 -.52
CME Lean Hog Index__62.30 -1.15 from last Thursday
Pork Carcass Cutout__97.44 +.69
IA-S.MN Wtd Avg Carcass Base__39.85 +.25
National Wtd Avg Carcass Base__37.93 -.88
U.S. equites extending higher with the Dow breaking above 25,000 for the first time since March 9th. Crude higher as well on Monday but back down today with the nearby July contract trying to break through the $35 resistance area. June live cattle pushing but unable to break the $100 mark this past week with support at $97.40 then around $93. August feeders with the limit higher move yesterday, expanded limits in place today, breaking the lower trend that started back on May 7th. Resistance is up at $138.80 with support at $128.30. June lean hogs also breaking the May lower trend with resistance from $66 to $67 and support at $58 then $55.70.
Grains were also mostly stronger to begin the week. Soybeans led the rally as corn posted minor gains and wheat spreads were the major player for KC & Chicago. Russian wheat prices shot higher over the weekend as more estimates continue to lower production estimates. Crop progress was of keen interest with an implied 11+ million acres of corn left to plant, ND with nearly 2 million of that and the prevent plant date hitting Monday.
USDA Weekly Crop Progress Recap
Corn planting progress at 88% complete compared to last week’s 80% and year ago week 55%
Corn emerged progress at 64% complete compared to last week’s 43% and year ago week 28%
Corn 70% good to excellent, 25% fair, 5% poor to very poor versus last week’s 52% good to excellent, 32% fair, 16% poor to very poor
Soybean planting progress at 65% complete compared to last week’s 53% and year ago 26%
Soybeans emerged progress at 35% complete compared to last week’s 18% and year ago 9%
Cotton planting progress at 53% complete compared to last week’s 44% and year ago week 53%
Grain sorghum planting progress at 39% complete compared to last week’s 32% and year ago week 27%
Spring Wheat planting progress at 81% complete compared to last week’s 60% and year ago week 80%
Spring Wheat emerged progress at 51% complete compared to last week’s 30% and year ago week 41%
Winter Wheat headed progress at 68% complete compared to last week’s 56% and year ago week 63%
Winter Wheat 54% good to excellent, 30% fair, 16% poor to very poor versus last week’s 52% good to excellent, 32% fair, 16% poor to very poor
Export inspections for the week ending May 21st were near expectations but still below the average needed per week expect for grain sorghum. China continues to take on average a couple cargoes per week of U.S. grain sorghum. This past week they were shipped 5.5 MBU of the 7.4 MBU total with the average needed per week at 5.1 MBU to meet the current USDA estimate. Corn inspections totaled 43 MBU, soybeans 12.2 MBU and wheat 16.8 MBU. The wheat marketing year ends this month and current year to date inspections sit at 896.2 MBU, only 1% higher than a year ago. Exports last year totaled 936 MBU vs. the current year’s estimate at 970 MBU which seems still a bit high.
Overnight, grains were firm with corn finishing steady to 1 higher, soybeans 3 to 4 higher and wheat steady to 4 higher.
The first vessel has been quarantined in Brazil as a crew member tested positive for COVID-19. Soybean sales were announced yesterday to China after the markets were patiently waiting for rumors to be confirmed last week. Rising tensions though between the U.S. and China over COVID-19 and now Hong Kong. No sales announced this morning by USDA, only a change in destination for 138,000 MT of soybean meal from unknown to the Philippines.
Heavy rains covered a majority of the Southern Plains these past few days as flooding still a major concern in the Dakotas and along the IL River. The 6-10 day outlook showing normal to above normal temps across the middle of the U.S. with below normal temps forecasted for both coasts and above normal precipitation in the Southwest and West Coast with below normal stretching from the Southern Plains into the Midwest and to the East Coast.
July corn still holding steady to higher over this past month. The contract low is down at $3.09, nearby support around $3.16 with resistance up at $3.25. July soybeans in a choppy 30 cent range this past month with support around $8.30 and resistance up around $8.60. July KC wheat finding support around $4.30 with resistance at $4.65. July Chicago wheat held support around $4.94 which matched the lows from mid-March with resistance up around $5.30.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700