Date: June 22nd, 2020
Negotiated cash feedlot trade mostly complete by midweek with steady to lower again. In the South, live trade ranged from $98 to $102 with dressed trade in the North from $158 to $160. Daily slaughter rates back up to pre-COVID levels for cattle while Saturday’s hog kill the past 3 weeks has pushed weekly totals ahead of pre-COVID and year ago. Weights are tremendously higher than a year ago though meaning there is extra product hitting a market still trying to rebuild consumer demand which will continue to pressure prices.
USDA released its monthly cattle on feed report after the close which was slightly bearish as placements were higher than expected and marketing lower than expected. Cattle on feed as of June 1st totaled 11.7 million head which was 99.5% compared to a year ago and also the second highest June total in history. Placements in feedlots during May totaled 2.04 million head, 1 percent below 2019. Marketings of fed cattle during May totaled 1.50 million head, 28 percent below 2019 and the lowest May total in history.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 06/19/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 160,400 46,500 9,700 216,600
Last Week: 160,300 33,800 46,300 240,400
Year Ago: 159,800 41,600 15,000 216,400
Compared to last week, steers and heifers sold steady to 4.00 lower. Demand at auctions was moderate to good across the nation. Cattle sold for delivery months out are also in demand this week.
For the week, Friday June 12th through Friday June 19th, June Live Cattle -$1.37, August +$.07, August Feeder Cattle +$1.45, September +$1.40, July Lean Hogs -$3.22, August -$1.85. Boxed Beef, Choice -$16.92 @ $213.72, Select -$15.36 @ $203.91. Pork Carcass Cutout -$5.35 @ $64.64.
Cattle slaughter from Friday estimated at 119,000 head, up 4,000 from the week previous and matching last year. For the week, 656,000 head, down 2,000 from the week previous and down 12,000 from last year. Beef production last week estimated at 541.0 million pounds compared to 542.2 million the week previous and 533.2 million last year. Year to date slaughter is now down 6.3% compared to last year with beef production down only 3.8%.
Hog slaughter from Friday estimated at 457,000 head, up 25,000 compared to the week previous but down 1,000 compared to a year ago. Saturday’s kill at 290,000. For the week, 2,587,000 head, up 136,000 compared to the week previous and up 133,000 compared to a year ago. Pork production last week estimated at 564.2 million pounds compared to 536.2 million the week previous and 522.2 million pounds last year. Hog slaughter is now down 0.7% compared to a year ago with pork production now up 0.2%.
Boxed beef cutout values steady with 167 loads sold on Friday.
Choice Cutout__213.72 +.16
Select Cutout__203.91 -.17
CME Feeder Index__128.01 -.50
CME Lean Hog Index__45.61 -.83
Pork Carcass Cutout__64.64 -.37
IA-S.MN Wtd Avg Carcass Base__28.07 -.50
National Wtd Avg Carcass Base__28.48 -.05
Outside markets mixed overnight with equities higher, US$ lower and energies lower. Tyson tested employees at 2 plants in Arkansas with results coming over the weekend and China suspending poultry imports from a Springdale, AR on Sunday. June live cattle have been choppy in a $4+ range so far this month with expiration coming the end of the month and cash prices continuing to fall towards futures. Support is down at $93.35 with resistance up at $97.50. August feeders chopping sideways the past month with support at $128.50 and resistance around $136. Daily ranges have been getting tighter over that time as well forming a wedge or squeeze which could lead to a sharp breakout here soon. July lean hogs continuing to hold a lower trend with a new contract low last week at $48.17 and resistance up around $53.
Grains were mixed on Friday and for the week with pressure on KC and Chicago wheat as harvest progressing rapidly. Fall crops were able to push into new recent highs last week as many areas are needing some moisture. The U.S. and China held high level meetings in Hawaii this past week with China “pledging” to step up purchases of U.S. Ag products. The forecast heading into the weekend was showing decent coverage and amounts throughout the Midwest for the weekend. The big story coming into this week will be confirming which areas received and missed those rains along with update weather forecasts.
For the week, Friday June 12th through Friday June 19th, July Corn +$.02 ½, December +$.02 ¼, July Soybeans +$.05 ¼, November +$.01, July KC Wheat -$.20 ¼, September -$.20 ¾, July Chicago Wheat -$.20 ¾, September -$.22 ½, July MPLS Wheat +$.11, September +$.09 ¾, July Soybean Meal -$2/T, August -$2.10/T.
Overnight, grains traded mixed with corn finishing 2 lower, soybeans 1 to 2 lower and wheat 1 higher to 2 lower.
Not much new news overnight. Russian wheat export estimates continue to climb as prices continue fall. Wheat harvest shut down in many parts of the Southern Plains over this past weekend. The markets will remain focused on updated weather models and still some areas are in need of some rain. The June acreage and quarterly stocks report will come out next week. Funds or managed money seem content on holding net short positions for the time being.
This week’s forecast calling for heavy rains in the Southeast and decent coverage over the Corn Belt. The 6-10 day outlook showing above normal temps for all except the PNW with above normal precipitation in the Northern Border States through the Midwest.
July corn still holding a slow moving higher trend since mid-April. The contract low is down at $3.09, nearby support at $3.24 with resistance at $3.35. July soybeans breaking higher earlier this month into another range bound trading pattern with support at $8.65 and resistance at $8.85. July KC wheat trying to hold support at $4.27 with resistance at $4.50. July Chicago wheat breaking into new recent lows with support next the contract low at $4.68 ¼ and resistance at $4.95 then $5.04.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700
