Date: June 29th, 2020
Cattle futures were mostly flat for the week while lean hogs continue to make new lows. Negotiated cash feedlot still falling with live trades reported from $93 to $98 and dressed $153 to $156, both $2 to $5 lower than the week previous. Weekly export sales were friendly for both beef and pork and remain the key to pushing through the backlog of slaughter ready cattle and hogs. The quarterly hogs and pigs report was also bearish with all hogs and pigs as of June 1st at 79.6 million head, up 5% from last year and up 3% from last quarter. Breeding inventory, at 6.33 million head, was down 1% from last year, and down 1% percent from the previous quarter. Market hog inventory, at 73.3 million head, was up 6% from last year and up 3% from last quarter.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 06/26/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 155,900 55,000 60,600 271,500
Last Week: 160,400 46,500 9,700 216,600
Year Ago: 156,200 35,700 46,100 238,000
Compared to last week, steers and heifers sold steady to 4.00 higher, with the biggest advance being in the North Central region. Loads of yearlings continue to find the marketplace with good to very good demand for them at auctions this week, bringing some much-needed excitement to the auctions. Receipts for this report will be curtailed next week due to the Independence Day holiday occurring late week. Ranchers have had ample opportunity so far this summer to get their winter forage supply baled up. Pastures in the Southern Plains need a drink as severe and extreme drought conditions persist in the High Plains.
For the week, Friday June 19th through Friday June 26th, June Live Cattle unchanged, August +$.72, August Feeder Cattle +$.05, September -$.10, July Lean Hogs -$3.17, August -$4.67. Boxed Beef, Choice -$6.55 @ $207.17, Select -$5.06 @ $198.85. Pork Carcass Cutout +$1.31 @ $65.95.
Cattle slaughter from Friday estimated at 119,000 head, matching the week previous but down 2,000 from last year. Saturday’s kill jump up to 82,000, up 23,000 from the week previous and last year. For the week, 680,000 head, up 24,000 from the week previous and up 10,000 from last year. Beef production last week estimated at 562.3 million pounds compared to 541.0 million the week previous and 533.8 million last year. Year to date slaughter is now down 6.0% compared to last year with beef production down only 3.5%.
Hog slaughter from Friday estimated at 472,000 head, up 15,000 compared to the week previous and up 19,000 compared to a year ago. Saturday’s kill at 323,000, up 33,000 compared to the week previous and up 263,000 compared to a year ago. For the week, 2,641,000 head, up 54,000 compared to the week previous and up 255,000 compared to a year ago. Pork production last week estimated at 573.8 million pounds compared to 564.2 million the week previous and 505.2 million pounds last year. Hog slaughter is now down 0.3% compared to a year ago with pork production now up 0.6%.
Boxed beef cutout values lower with 135 loads sold on Friday.
Choice Cutout__207.17 -1.09
Select Cutout__198.85 -1.08
CME Feeder Index__130.04 +.22
CME Lean Hog Index__45.23 +.36
Pork Carcass Cutout__65.95 +.90
IA-S.MN Wtd Avg Carcass Base__28.96 -.16
National Wtd Avg Carcass Base__28.48 -.18
Equites are mixed to start the week following the massive sell off last Friday and the surge in positive COVID tests across many states. Reopening plans have been paused now in some or even taken a step back. Energies are mostly higher and the US$ is lower. June live cattle expire tomorrow. August has been holding a steady to lower trend since early May with support at $94.30 and $93.50 and resistance up at $98 then $101.30. August feeders chopping sideways the past month with support at $128.30 and resistance around $136. The wedge or squeeze is still in place as the 1 day breakout higher last week and no follow through. July lean hogs continuing to hold a lower trend with a new contract low on Friday at $44.97, support next around $37 from the continuous weekly chart and resistance up at $50.
Grains were pressured lower last week as rains moved through the Midwest early in the week and again into this past weekend. Temps continue to push above normal but so long as moisture continues with it across the Corn Belt, the market sees little incentive in adding any weather premium. Crop conditions are likely to improve again in this week’s USDA Crop Progress report. Corn reached down for new recent lows last week as wheat hit new contract lows. Exports have to pick up here soon as domestic soy crush margins are shrinking and ethanol production is still not back up to 100% capacity.
For the week, Friday June 19th through Friday June 26th, July Corn -$.15 ½, December -$.20, July Soybeans -$.11 ½, November -$.19 ½, July KC Wheat -$.07, September -$.08 ½, July Chicago Wheat -$.07 ¼, September -$.09 ½, July MPLS Wheat -$.25 ¾, September -$.26 ¼, July Soybean Meal -$4.90/T, August -$4.00/T.
Overnight, grains were mixed with corn finishing 3 higher, soybeans steady and wheat 1 lower to 3 higher.
South Korea picked up a couple cargoes of either South American or South African corn overnight along with 70,000 MT or 2.6 MBU of optional origin feed grade wheat.
Stats Canada June 2020 Seeded Acreage
2020 All Wheat Acreage at 24.971 mln acres; expected 25.2, 2019 at 24.6 mln acres
2020 Durum Wheat Acreage at 5.689 mln acres; expected 5.5, 2019 at 4.9 mln acres
2020 Spring Wheat Acreage at 17.926 mln acres; 2019 at 18.782 mln acres
2020 Canola Acreage at 20.778 mln acres; expected 20.7, 2019 at 21.0 mln acres
2020 Soybean Acreage at 5.070 mln acres; expected 5.3, 2019 at 5.7 mln acres
2020 Barley Acreage at 7.503 mln acres; expected 7.2, 2019 at 7.4 mln acres
2020 Corn Acreage at 3.559 mln acres; expected 3.6, 2019 at 3.7 mln acres
2020 Oats Acreage at 3.839 mln acres; expected 3.9, 2019 at 3.6 mln acres
2020 Flax Acreage at 0.911 mln acres; expected 1.04 mln, 2019 at 0.937 mln acres
Estimates for USDA Quarterly Grain Stocks/Acres
– US Corn acres at 95.21 mln acres, compared to the March 31 forecast at 96.99 mln acres and the 89.70 mln acre crop in 2019.
– US Soybean acres at 84.72 mln acres, that compares to the March 31 forecast at 83.51 mln acres and the 76.10 mln acre crop in 2019.
– US All wheat acres at 44.72 mln acres, that compares to the March 31 forecast at 44.655 mln acres and the 45.158 mln acre crop in 2019. US Winter wheat acres at 30.85 mln acres, that compares to the March 31 forecast at 30.775 mln acres and the 31.159 mln acre crop in 2019. Spring Wheat acres are forecast at 12.55 mln acres vs the March estimate at 12.59; Durum acres are forecast now at 1.31 mln compared to the 1.290 mln as of March 31
– US Sorghum acres at 5.88 mln acres that is up from the 5.820 mln acres forecast as of March 31, and the 5.265 mln acres planted in the 2019 crop year.
– US All Cotton acres at 13.15 mln acres that is off from the 13.703 mln acres forecast as of March 31, and the 13.738 mln acres planted in the 2019 crop year.
– June 1 Corn stockpiles expected to be 4.95 BBU, compared to 5.202 BBU last June and down from the 7.95 BBU on March 1
– June 1 Soybean stockpiles expected to be 1.39 BBU, compared to 1.78 BBU last June and down from the 2.253 BBU on March 1
– June 1 Wheat stockpiles at 0.98 BBU, compared to 1.08 BBU last June and down from the 1.412 BBU on March 1
This week’s forecast calling for much above normal temps and heavy rains in the Northern Border States. The 6-10 day outlook continuing to showing above normal temps for the Plains and Corn Belt, below normal in the PNW and Southeast, with above normal precipitation in the Northern Border States and Southeast and below normal from the Southwest through the middle of the US and into the Northeast.
July corn breaking the slow moving higher trend that had been in place since mid-April. The contract low is down at $3.09, with the new recent low on Friday at $3.13 ½ and resistance at $3.35. July soybeans breaking higher earlier this month into another range bound trading pattern with support at $8.60 and resistance at $8.80. July KC wheat hitting a new contract low on Friday at $4.16 ½ with resistance at $4.30. July Chicago wheat matching the contact low at $4.68 ¼ with resistance at $4.90.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700