Date: June 15th, 2020
Negotiated cash feedlot spread out again this past week and under pressure as the week progressed moving from the top end at $108 live down to $102 by Friday. Those values are $1 to $10 lower than the week previous and dressed trade $3 to $15 lower at $162 to $165. Even though daily slaughter capacities are still behind a year ago or pre COVID, Saturday schedules have allowed weekly cattle slaughter to get with 10K head of year ago and hog slaughter the past two weeks has now exceeded a year ago levels. Beef prices continue to plummet as ample supplies are now hitting the market while pork prices were only slightly lower this past week. This is good for both products as stable pork prices should start to support hog prices and beef is now closing the gap between the two trying to remain competitive. This will be only path to clearing out the massive backlog and pushing beef specials domestically as well as increasing exports.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 06/12/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 160,300 33,800 46,300 240,400
Last Week: 207,100 87,400 10,700 305,200
Year Ago: 134,900 52,900 49,400 237,200
Compared to last week, steers and heifers sold steady to 2.00 higher in the North Central region, while the South Central and Southeast were steady to 4.00 lower. Demand was moderate to good as buyers were watching how futures were reacting to outside sources and the short supply of feeder cattle in the Northern Plains this week. This week’s receipts on this report are near 50K less than last week, but around 25K more than a year ago. Ranchers have held on to calves and yearlings a little longer than in previous years. Dry conditions in parts of the Plains states have made the rancher evaluate if they want to keep an open cow or older cow with udder or disposition issues for rebreeding this year.
For the week, Friday June 5th through Friday June 12th, June Live Cattle +$2.17, August -$.85, August Feeder Cattle -$3.07, September -$3.00, July Lean Hogs -$2.25, August -$2.70. Boxed Beef, Choice -$30.84 @ $230.64, Select -$27.15 @ $219.27. Pork Carcass Cutout -$2.79 @ $69.99.
Cattle slaughter from Friday estimated at 115,000 head, down 1,000 from the week previous and down 4,000 from last year. Saturday’s kill estimated at 76,000 head, up 13,000 from the week previous and up 12,000 from last year. For the week, 658,000 head, up 22,000 from the week previous but down 11,000 from last year. Beef production estimated at 542.2 million pounds compared to 522.6 the week previous and 531.1 last year. Year to date beef production down 4.0% from last year with cattle slaughter down 6.4%.
Hog slaughter from Friday estimate at 438,000 head, down 5,000 compared to the week previous and down 27,000 compared to a year ago. Saturday’s kill estimated at 230,000 head, down 78,000 compared to the week previous but up 16,000 compared to a year ago. For the week, 2,457,000 head, up 15,000 compared to the week previous and up 18,000 compared to a year ago. Pork production estimated at 537.5 million pounds last week compared to 535.2 the week previous and 521.0 last year. Year to date pork production is only down 0.2% from last year with hog slaughter down 1.0%.
Boxed beef cutout values lower with 155 loads sold on Friday.
Choice Cutout__230.64 -4.92
Select Cutout__219.27 -.61
CME Feeder Index__129.58 +.20
CME Lean Hog Index__48.97 -1.02
Pork Carcass Cutout__69.99 +.53
IA-S.MN Wtd Avg Carcass Base__30.94 +.91
National Wtd Avg Carcass Base__30.36 +.21
Outside markets under pressure last night as COVID infections pick up in many states post Memorial Day weekend and as states open back up for business and travel. June live cattle found support last week from $93.35 to $93.75 with resistance tested around $97.40. The May high will be next resistance at $101.60. August feeders chopping sideways the past month with support at $128.50 and resistance around $136. July lean hogs now the front month and continuing to hold a lower trend with support at $51.50, the contract low from April down at $49 and resistance up at $56.40
Grains traded mixed throughout the week with the most pressure on the wheat markets. HRW harvest as already moved into SC KS and progressing well with hot and dry conditions in the nearby forecast. The USDA supply and demand report was neutral to friendly for the fall crops but new crop world wheat stocks shot up nearly 6 MMT due primarily to an increase in production in India, the 2nd largest wheat producing nation. Fall crop conditions and weather forecasts will be watched closely as we move into summer to see if there any need to add some weather premium to futures.
For the week, Friday June 5th through Friday June 12th, July Corn -$.01 ¼, December -$.02 ¼, July Soybeans +$.03 ½, November +$.00 ¾, July KC Wheat -$.12 ¾, September -$.12 ¼, July Chicago Wheat -$.13 ¼, September -$.12 ½, July MPLS Wheat -$.05 ½, September -$.05 ½, July Soybean Meal -$.10/T, August -$.10/T.
Overnight, grains traded mixed to lower with corn finishing 1 to 2 lower, soybeans 4 to 6 lower and wheat steady to 3 lower.
May domestic soybean crush will be released later this morning by NOPA. The average trade guess shows crush at 173.0 MBU which would be a new record for May. April’s crush was 171.7 MBU and last May was 154.8 MBU.
A few early tenders already out for this week with Taiwan looking for a cargo of corn, Syria for corn and soybean meal and Jordan for a couple cargoes of milling quality wheat. Brazil’s soybean basis continues to scream higher as shipments to China have been near or into new records amounts. USDA announced this morning a private sale of 390,000 MT or 14.3 MBU of new crop soybeans sold to China.
This week’s forecast calling for hot and dry conditions and by the end of the week, heavy rains with continued above normal temps for the WCB. The 6-10 day outlook showing above normal temps for all except in the Northern Plains and Great Lakes with above normal precipitation showing in the Southern Plains and Corn Belt and below normal in the Northern Plains.
July corn still holding steady to higher since mid-April. The contract low is down at $3.09, nearby support at $3.24 with resistance at $3.35. July soybeans breaking out of the range bound trade with new recent highs but resistance just above $8.73 and support at $8.50. July KC wheat finding support around $4.40 with resistance at $4.76. July Chicago wheat testing support again around $4.94, the low in both May and 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