Date: August 17th, 2020
Cattle futures finished the week mixed but higher week over week. Cash feedlot trade continues to rally adding another $3 to $5 last week compared to the week previous. Trade in the South reported at $103 to $105 live with the majority at $104 while dressed trade in North was reported at $165 to $170. The midweek USDA supply and demand report was bearish again for the meats. Cattle slaughter is still running near capacity but lagging a year ago, weights are starting to come down and I am hearing some lots are current. These all are friendly to the cattle market fundamentally as technically the charts continue to hold higher trends with new highs nearly weekly.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 08/14/2020
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 158,100 66,500 7,000 231,600
Last Week: 171,800 66,400 261,400 499,600
Year Ago: 104,800 27,900 70,100 202,800
Compared to last week, steers and heifers sold uneven, 1.00 lower to 3.00 higher. Many of the receipts in the Northern Plains are coming off summer grass with the yearlings in excellent condition reported. Buyers are looking for those cattle to perform very well in the feedlot with compensatory gains on the front end appearing to be very good.
For the week, Friday August 7th through Friday August 14th, August Live Cattle +$4.80, October +$3.77, August Feeder Cattle +$1.20, September +$1.45, August Lean Hogs +$2.82, October +$2.05, December +$1.70. Boxed Beef, Choice +$8.77 @ $214.24, Select +$6.54 @ $199.29. Pork Carcass Cutout +$3 @ $74.93.
Cattle slaughter from Friday estimated at 112,000 head, up 3,000 from the week previous but down 3,000 from last year. Saturday’s kill was estimated at 63,000 head bringing week to date up to 640,000 head, up 7,000 from the week previous but down 13,000 from last year. Beef production estimated at 532.4 million pounds last week compared to 527.2 the week previous and 530.3 million pounds last year. Year to date beef production is down 2.4% vs. a year ago with slaughter down 5.1%.
Hog slaughter from Friday estimated at 472,000 head, down 2,000 from the week previous but up 18,000 compared to a year ago. Saturday’s kill was estimated at 219,000 bringing the week to date up to 2,565,000 head, up 31,000 compared to the week previous and up 74,000 compared to a year ago. Pork production was estimated at 541.2 million pounds last week vs. 536.7 the week previous and 518.1 million pounds last year. Year to date pork production is now up 2.0% compared to last year and slaughter is up 1.1%.
Boxed beef cutout values sharply higher with 126 loads sold on Friday.
Choice Cutout__214.24 +3.29
Select Cutout__199.29 +1.88
CME Feeder Index__142.25 -.85
CME Lean Hog Index__53.84 +.36
Pork Carcass Cutout__74.93 +1.17
IA-S.MN Wtd Avg Carcass Base__37.76 -.09
National Wtd Avg Carcass Base__37.60 +.09
Equities pointing higher to start today, energies steady to higher with the US$ slightly weaker. August live cattle into a new 6-month high on Friday and holding a higher trend since bottoming out in early April. Nearby support is down around $102 with resistance next up around $111. August feeders also holding the long term higher trend and into new 6-month highs last week with support at $143 and resistance at $146.40 then around the $150 area. October lean hogs have traded a $10 range since mid-May with resistance around $55 and the contract low down at $46.47.
Grains finished the week mixed and fairly quiet compared to the midweek sharp rally. The USDA crop report did estimate both corn and soybean yield and production higher than expected yet ending stocks both domestically and worldwide were mostly below the trade estimates. FSA prevent plant data released shortly after was a bit of surprise to the market with over 5 million acres. This along with the continued daily grain buying by China and dry conditions for the entire Corn Belt in the forecast for the second half of this month are fundamentally supportive. On the charts, grains touched nearby support or even contract lows then reversed sharply higher.
For the week, Thursday August 7th through Friday August 14th, September Corn +$.16 ¾, December +$.17 ¼, August Soybeans +$.31 ¼, November +$.31 ¼, September KC Wheat +$.09 ¾, December +$.08 ½, September Chicago Wheat +$.04 ½, December +$.06, September MPLS Wheat +$.03, December +$.01 ¾, September Soybean Meal +$9.80/T, December -$11.70/T.
Overnight, grains were higher with corn finishing 3 to 4 higher, soybeans 8 to 9 higher and wheat 3 to 5 higher.
USDA announced a private sale of 130,000 MT or 4.8 MBU of HRW for delivery to unknown destinations.
Iowa’s Governor seeking $4 billion is disaster relief from last week’s storms. The crop damage is still be assessed with early estimates around 10 million acres and possibly 500 MBU of corn lost. Iowa Soybean Association stated that 5.6 million acres of soybeans and 8.18 million acres of corn was affected in the state with 37.7 million acres overall.
Scattered rains fell across the Southern Plains and Eastern Corn Belt over the weekend. Forest fires continue to spread out West with the fourth largest in Colorado state history still hardly contained on the Western Slope and over 80,000 acres burned. Rains this week isolated to the Southeast and East Coast. The 6-10 day outlook showing normal to above normal temps across the U.S. with above normal moisture for the East Coast and below normal for the Plains and Corn Belt.
September corn gapping higher overnight with resistance around $3.35 then $3.55 and support at $3.07. December also gapping higher with resistance next up at $3.63 and support at $3.20. September soybeans gapping higher in the overnight and breaking nearby resistance with the next up around $9.20 and support around $8.65. September KC wheat still holding a long term lower trend with support at $4.10 and resistance up at $4.45. September Chicago wheat with support at $4.90 and resistance up around $5.35.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700