Date: July 1st, 2020
Cattle futures pulled back from early gains as lean hog futures held mostly higher on deferred contracts. There was some light chatter about a new swine flu being identified in China. Overall pressure will continue to be present as we push huge amounts of both beef and pork on the market trying to clear the backlog of slaughter ready animals. Light cash feedlot trade so far this week at $92 to $95 live and $153 on a dressed basis, $2 to $3 lower than last week. The Fed Cattle Exchange online auction will be held later today with 1,814 head consigned compared to last week’s 1,221 head of which 276 sold at $95 to 97 live for 1-17 day delivery.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 6/29/2020
Total Receipts: 10,786 Last Week: 5,711 Last Year: 5,985
Compared to last week, steer calves steady, heifer calves steady to 3.00 higher, yearling steers steady to 3.00 higher, yearling heifers steady. Demand moderate to good, supply heavy.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 6/29/2020
Total Receipts: 9,182 Last Week: 7,889 Last Year: 5,353
Compared to last week: Feeder steers steady to 4.00 higher. Feeder heifers 4.00-7.00 higher. Demand good for feeder cattle. Steer and heifer calves steady to 4.00 higher. Demand moderate to good for calves. Quality mostly average. Several cattle off of summer pasture and several of these cattle weighing over 900 lbs.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 6/29/2020
Total Receipts: 2,572 Last Week: 2,028 Last Year: 2,120
Compared to last week: Steers and Heifers 4.00-6.00 higher. Demand good. Quality good. Slaughter cows 5.00 higher. Slaughter bulls 2.00- 3.00 higher.
Cattle slaughter from Tuesday estimated at 121,000 head, up 1,000 from last week but down 2,000 from last year. Hog slaughter from Tuesday estimated at 469,000 head, up 12,000 compared to last week but down 11,000 compared to a year ago.
Boxed beef cutout values lower following a couple days of steady to higher prices with 174 loads sold on Tuesday.
Choice Cutout__206.97 -1.39
Select Cutout__199.90 -.81
CME Feeder Index__129.42 -.26
CME Lean Hog Index__45.24 +.01
Pork Carcass Cutout__63.12 -2.09
IA-S.MN Wtd Avg Carcass Base__28.57 -.04
National Wtd Avg Carcass Base__28.45 +.14
Outside markets supportive with equites and energies higher and US$ lower to start the day. August live cattle have been holding a steady to lower trend since early May with support around $95 and resistance up at $98. August feeders chopping sideways to holding a slightly higher trend since early May with support around $130 and resistance around $136. July lean hogs continuing to hold a lower trend with a new contract low from Friday at $44.97 holding so far, support next around $37 from the continuous weekly chart and resistance up at $50.
USDA crop report provided some early Independence Day fireworks yesterday. The June Acreage report was very friendly with corn acres down nearly 5 million acres from the March intentions and over 3 million below the pre report average trade estimate at 92.006 million acres. The other good news is that loss in corn acreage didn’t just roll into additional soybean acres due to a significant reduction in total acres in the Northern Corn Belt. Soybean acres only increased by 300,000 to 83.825 million vs. pre report trade estimates looking for an increase of 1.2 million acres. Total wheat acreage was slightly lower at 44.25 million acres with spring wheat seeing the largest reduction at 390,000 acres. And even grain sorghum acres down 200,000 from the March intentions.
Quarterly Stocks were actually bearish for both corn and wheat as demand continues to lag compared to previous estimates. This will push old crop wheat ending stocks back above 1 billion bushels and old crop corn stocks possibly 2-300 MBU higher than last month’s estimate. The lower corn acreage though, using trend line yields, equates to 1 BBU drop in new crop production.
Overnight, grains continued higher with corn and soybeans both finishing 6-7 higher and wheat finished 2-4 higher for both the Chicago and KC contracts while MPLS wheat was 2 lower.
July contracts are now in delivery meaning no daily trading limits and volume is getting thin. If you still have positions in the nearby spot month, please get them rolled or exit this week. Markets are closed on Friday in observance of Independence Day. News is quiet overnight and I would typically say traders will start going home early ahead of the long weekend, but they are all still home as the CME has not opened the trading floors or the onsite order entry back up yet.
This week’s forecast still looking hot and mostly dry with flooding still present in the Miss River Valley and across most of IL. The 6-10 and 8-14 day outlooks still showing well above normal temps across most of the country and below normal moisture for most of the Southern Plains and Corn Belt with above normal in the North and Southeast.
September corn breaking through resistance yesterday at $3.39 and into a new 3-month high in the overnight with resistance next at $3.60 and support around $3.30. August soybeans also breaking nearby resistance and into a new highs with resistance next up at $8.96 and support at $8.60. September KC wheat chart still looks bearish with the new contract lows hit last Friday at $4.23 ¾ and resistance at $4.60 then $4.83. September Chicago wheat still holding the lower trend with the contact low at $4.71 and resistance at $5.17 then $5.32.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700