Date: July 15th, 2020
Equities pushed higher as the trading day progressed yesterday, US$ was weaker and energies were mostly steady. Livestock futures though were lower. Demand is the concern once again as the increase in positive cases of COVID continues to surge in many states. California just announced pulling back in essence to a Phase 1 of reopening by shutting down dine in restaurants and closing all bars along with other types of business. I think the livestock markets are looking at the extra meat production being produced from heavier weights as they try to keep slaughter levels near capacity vs. the domestic consumption potential or loss of. Exports remain the critical piece of the puzzle to keep our current pace up. Steady to higher cash feedlot trade so far this week in Kansas and Texas at $95 to $96.25 live. Sales in Iowa reported at $99 to $100 live and $160 on a dressed basis, steady with last week as well. The Fed Cattle Exchange online auction will be held later today with 1,224 head consigned compared to last week’s 1,390 head of which 659 sold at $95 to $95.25 live all out of Kansas.
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 7/13/2020
Total Receipts: 6,258 Last Week: 4,630 Last Year: 5,082
Compared to last week, steer and heifer calves under 500 lbs steady to 5.00 lower, calves over 500 lbs and yearlings steady, except 750 to 850 lb steers steady to 3.00 higher. Demand moderate to good, supply moderate to heavy.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 7/13/2020
Total Receipts: 8,234 Last Week: 4,446 Last Year: 7,938
Compared to last week: Feeder steers steady to 5.00 higher, largest advance under 850 lbs. Steer calves steady to 3.00 higher, 5 weights up to 8.00 higher. Feeder heifers and heifer calves 2.00-5.00 higher. Demand very good for all classes.. Quality mostly average. Several thin fleshed cattle included.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 7/13/2020
Total Receipts: 1,927 Last Week: 1,874 Last Year: 1,786
Compared to last week: Steers 4.00-7.00 higher. Heifers 2.00-5.00 higher. Demand good. Quality good. Slaughter cows mostly steady to 1.00 higher. Slaughter bulls 5.00 lower.
Cattle slaughter from Tuesday estimated at 118,000 head, up 3,000 from last week but down 2,000 from last year. Hog slaughter from Tuesday estimated at 454,000 head, up 2,000 from a week ago and up 43,000 compared to a year ago.
Boxed beef cutout values sharply lower with 147 loads sold on Tuesday.
Choice Cutout__200.92 -2.34
Select Cutout__190.85 -1.03
CME Feeder Index__135.62 +.45
CME Lean Hog Index__46.08 +.44
Pork Carcass Cutout__66.24 -1.28
IA-S.MN Wtd Avg Carcass Base__31.27 +2.13
National Wtd Avg Carcass Base__31.08 +.63
Outside markets continue to be supportive with equities higher and the US$ lower. August live cattle with a breakout higher to bust through the lower trend but still unable to break the 2+ month range bound trade with resistance up above $101 and support around $95. August feeders chopping sideways and still holding a slow moving higher trend since mid-April with support around $132 and resistance at $138. July lean hogs continuing to hold the long term lower trend with a new contract low last week at $43.57 and resistance up at $50.
Over in the grains, markets were mixed as both corn and KC wheat tanked heading into the close as the soy complex and Chicago wheat futures held small gains. Crop conditions were as expected lower for the fall crops Monday afternoon which helped support the grains for most of the trading session. Concerning though that the largest grain export sale to China in history and the largest single purchase of a US commodity since the early 90’s was not more supportive yesterday. China purchased over 69 MBU of new crop corn following a 54 MBU announcement last Friday. Including current outstanding sales, China now has 5.5 MMT or over 216 MBU of U.S. corn on the books through the end of the 2020/21 marketing year. President Trump scheduled a late afternoon news conference though thought to address additional actions towards China. The tensions between the U.S. and China continue to be the wet blanket squashing any friendly news on these markets. He did sign legislation in regards to the recent Hong Kong issues but did not impose or threaten additional tariffs on China at this time. Midday weather forecast also calling for more widespread Midwest rains as the heat continues but less threatening now with moisture added in.
Overnight, grains were mixed with corn 1 to 2 lower while soybeans and wheat finished 1 to 2 higher as the markets saw no need to react to President Trump’s speech yesterday. China has threatened unspecified retaliation over the formal cancellation of Hong Kong’s status as well as the rejection of China’s claim over certain portions of the South China Sea.
USDA announced additional private sales to China this morning. This time a total of 389,000 MT or 14.3 MBU of new crop soybeans and 132,000 MT or 5.2 MBU or new crop corn.
Excessive heat still in the forecast for the remainder of this week and into early next week across the entire Corn Belt. The 6-10 day outlook continuing to showing above normal temps across the U.S. with below normal now only in the North Dakota and now above normal moisture across the entire Corn Belt.
September corn into new recent lows overnight with the contract low the next support down at $3.15 and resistance at $3.55. August soybeans holding support at $8.70 so far this week with resistance up at $9.04. September KC wheat testing the support at the 20-day moving average this week, now at $4.41 ¾, with resistance at $4.57. September Chicago wheat still gaining over KC with support at $5.15 and resistance at $5.39 then around $5.70.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700