Date: August 10th, 2020
Cattle futures finished the week mixed to lower and lower for the week while hog futures were triple digits higher on Friday and mixed for the week. Cash feedlot trade last week at $3 higher than the week previous. Trade in the South done mostly at $100 live with trade in the North at $103 live and $163 to $168 on a dressed basis. Cattle slaughter has been slipping under a year ago values these past couple weeks while hog slaughter is exceeding a year ago totals. This is not the pattern the market wants to see with an abundance of slaughter ready cattle still out there. Both beef and pork values were higher for the week which should be more supportive if that trend can hold this week.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 08/07/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 171,800 66,400 261,400 499,600
Last Week: 136,100 48,500 400 185,000
Year Ago: 154,600 58,100 241,400 454,100
Compared to last week, steers and heifers sold steady to 3.00 higher. Order buyers and farmer feeders were front and center ready to procure cattle throughout this week. Drought continues to persist this week with 54 percent of the country being in some sort of drought designation. This marks the fourth consecutive week over 50 percent. One region of note would be in Wyoming and creeping into Northwest Nebraska. Some producers in those areas are contemplating early weaning of calves currently. Every year, producers are trying to get long or short yearling cattle marketed before the Labor Day holiday and this year has been no exception. The first full week in August brought around 11 percent more cattle to the sale barns than a year ago.
For the week, Friday July 31st through Friday August 7th, August Live Cattle -$.02, October -$1.42, August Feeder Cattle -$1.95, September -$1.10, August Lean Hogs -$1.00, October +$1.35. Boxed Beef, Choice +$2.21 @ $205.47, Select +$2.86 @ $192.75. Pork Carcass Cutout +$6.62 @ $71.93.
Cattle slaughter from Friday estimated at 109,000 head, down 4,000 from the week previous and down 8,000 from last year. Saturday’s kill was estimated at 60,000 head bringing week to date up to 633,000 head, down 5,000 from the week previous and down 14,000 from last year. Beef production estimated at 527.2 million pounds last week compared to 530.3 the week previous and 524.7 million pounds last year. Year to date beef production is down 2.5% vs. a year ago with slaughter down 5.2%.
Hog slaughter from Friday estimated at 474,000 head, matching the week previous and up 25,000 compared to a year ago. Saturday’s kill was estimated at 230,000 bringing the week to date up to 2,534,000 head, down 4,000 compared to the week previous but up 184,000 compared to a year ago. Pork production was estimated at 536.7 million pounds last week vs. 538.2 the week previous and 488.5 million pounds last year. Year to date pork production is now up 1.9% compared to last year and slaughter is up 1.0%.
Boxed beef cutout values higher with 116 loads sold on Friday.
Choice Cutout__205.47 +.81
Select Cutout__192.75 +.74
CME Feeder Index__141.92 +1.13
CME Lean Hog Index__52.44 -.34
Pork Carcass Cutout__71.93 +1.13
IA-S.MN Wtd Avg Carcass Base__37.97 -.65
National Wtd Avg Carcass Base__38.11 +.17
Equities and energies starting the day higher along with the US$. August live cattle have a higher trend holding since bottoming out in early April yet a choppy $10 trading range since early May. Nearby support is down at $100.30 with resistance at $104 then $106. August feeders also holding the long term higher trend and into new 5-month highs last week with support at $139 and resistance at $146 then around the $150 area. August lean hogs holding a lower trend going back almost a full year with resistance around $55 and the contract low down at $47.52.
Grains were under pressure again on Friday and for the week. Most of the overall pressure coming from rains expected across the Western and Northern Corn Belt, specifically the dry areas of Iowa, over the weekend and a bearish crop report expected from USDA this week. Corn made new contract lows, soybeans took out nearby support and wheat made new lows but did come back to finish just slightly lower for the day. Pakistan announced a massive 1.5 MMT or 55.1 MBU tender for wheat. The recent collapse in US values and lower US$ should allow US wheat to be competitive with world values. China continues to buy soybeans, USDA announced a few more cargoes on Friday. There were rumors that China may have purchased an additional 10 – 20 cargoes last week.
For the week, Thursday July 31st through Friday August 7th, September Corn -$.08 ¼, December -$.06 ¼, September Soybeans -$.24 ½, November -$.25, September KC Wheat -$.27, December -$.25 ¾, September Chicago Wheat -$.35 ¾, December -$.35 ¼, September MPLS Wheat -$.19 ½, December -$.17 ¼, September Soybean Meal -$9.20/T, December -$10.50/T.
Overnight, grains were mixed with corn finishing steady to 1 higher, soybeans 1 lower and wheat 1 to 3 lower.
Private estimates now pushing both Ukraine and Russian grain production estimates higher. Specifically Russian wheat and corn in Ukraine, both exporting competitors with the U.S. USDA will update domestic and world supply and demand this coming Wednesday at 11 am CST.
USDA announced private sales of 588,000 MT or 21.6 MBU of new crop soybeans sold to China and 111,000 MT or 4.1 MBU of new crop soybeans sold for unknown destinations.
The weekend weather netted us rains over the northwestern and southwestern corners of Iowa, but they have plenty of rain forecasted again for this week. Scattered rains expected across the eastern half of the U.S. this week and heavy rains along the East Coast. The 6-10 day outlook showing above normal temps centered on the Southwest with normal to above normal across the U.S. and above normal moisture for the eastern third of the U.S., below normal moisture for the Southwest up through the Northern Plains.
September corn into a new contract Friday at $3.07 ¼ with resistance around $3.18 then $3.30. Funds are projected to be over 200K contracts short which is near but not a new record short position. The $3 mark is the long term physiological support area which as of now looks to hold as the market balances a huge crop potential and large ending stocks with expanding exports, especially the potential for more Chinese business. September soybeans choppy over this past month, but breaking into new recent lows the past few days with support next around $8.55 and resistance at $9.04. September KC wheat into new lows on Friday with support around $4.10 and resistance up at $4.45. September Chicago wheat into a new recent also on Friday with support at $4.90 and resistance at $5.23.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700