Date: April 12th, 2021
Cattle futures ended the week under pressure but still held week over week gains. Lean hogs continued to add value and hit new contract highs. Supplies of slaughter ready cattle are tightening, especially in the North, as packers paid $3 to $8 higher than the previous week. Cash feedlot trade done primarily midweek with cattle in Texas and Kansas selling at $120-122 while northern cattle sold from $122-125 live. Dressed sales in the north reached $195-196. USDA’s updated supply and demand report showed a mild increase in beef production compared to a month ago estimates with a moderate reduction in pork production. Beef exports left unchanged, but pork exports increased.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 4/4/2021 – 4/10/2021
Current Week: 26,929 Last Week: 28,742 Last Year: 17,720
Compared to last week: Feeder steers steady to 4.00 higher. Feeder heifers steady to 3.00 higher. Steer and heifer calves sold steady to 5.00 higher. Demand very good for all classes. Slaughter cattle prices finally making a move upward after strong advances were made in the Beef.
For the week, Thursday April 1st through Friday April 9th, April Live Cattle +$3.40, June +$.02, April Feeder Cattle +$.87, May +$.40, August +$1.95, April Lean Hogs +$1.70, June +$2.62, April Pork Cutout Futures +$.72. Boxed Beef, Choice +$19.35 @$272.17, Select Cutout +$17.10 @ $264.07. Pork Carcass Cutout +$3.66 @ $113.17.
Cattle slaughter from Friday estimated at 111,000 head and Saturday at 66,000. For the week, 641,000 head, up 32,000 from the week previous and up 112,000 from last year. Beef production last week estimated at 530.9 million pounds, bringing year to date -0.7% vs. last year with slaughter year to date -2.0%.
Hog slaughter from Friday estimated at 485,000 head and Saturday at 209,000. For the week, 2,487,000 head, up 24,000 compared to the week previous and up 94,000 compared to a year ago. Pork production last week estimated at 540.5 million pounds bringing year to date to -2.7% and slaughter -4.1% compared to a year ago.
Boxed beef cutout values last Friday steady to higher on light demand with only 87 loads sold.
Choice Cutout__272.17 +1.67
Select Cutout__264.07 +.24
CME Feeder Cattle Index__141.79 +.53
CME Lean Hog Index__101.37 +.43
Pork Carcass Cutout__113.17 +2.17
IA/MN Wtd Avg Carcass Base__101.62 +.37
National Wtd Avg Carcass Base__100.21 +.80
April live cattle reversing lower on Friday and filling the gap left from Thursday, still holding a three week higher trend with resistance next up around $126 and support at $121. April feeders tested the $148 resistance and proceeded sharply lower Friday with support around $142. Deferred contracts continue to hold long term higher trends, making new contract highs weekly. April lean hogs continuing the sharply higher trend with another new contract Friday at $103.62. The next technical target is up around $110, the nearby spot high from the fall of 2014.
Another mixed supply and demand report for grains and oilseeds from USDA on Friday. Corn futures finished mixed after hitting new contract highs, soybeans lost some ground and wheat continued its rally for the week led again by MPLS Wheat futures. U.S corn ending stocks were decreased, even more so than expected, down 150 MBU to 1.352 BBU. This brings the stocks to use ratio to 9.15% which is the 5th tightest in the past 30 years. Domestic feed usage increased by 50 MBU, ethanol increased 25 MBU and exports increased 75 MBU. World stocks reflecting the same change, down 3.82 MMT. Another friendly reduction as U.S competitor Ukraine exports down 1 MMT.
USDA made some minor adjustments to the soybean balance sheet which left ending stocks unchanged at 120 MBU. Exports increased by 30 MBU which is friendly but domestic crush down 10 MBU along with seed and residual (the slush fund) down 20 MBU. The bearish news for the soy complex came from a 2 MMT increase of Brazil’s production, a 1 MMT increase of their exports and a 2 MMT reduction of Chinese crush. U.S wheat stocks were increased a little more than expected, up to 852 MBU. The world picture held the bullish news with ending stocks down an unexpected 5.67 MMT. The main adjustment was an increase to China’s feed usage of 5 MMT.
The CFTC Commitment of Traders report showed managed fund money through the week ending 4/6 selling 8,900 corn contracts (net long 386.6K), buying 7,100 Chicago Wheat and now net short 7,500, selling 7,200 KC Wheat but still net long 14,500 and buying 12,400 soybeans (net long 154.3k)
For the week, Friday April 1st through Friday April 9th, May Corn +$.17 ½, December +$.12, May Soybeans +$.01, November -$.00 ½, May KC Wheat +$.21 ½, July +$.22 ¼, May Chicago Wheat +$.27 ¾, July +$.30, May MPLS Wheat +$.54 ½, September +$.49 ¾, May Soybean Meal -$9.00/T, July -$6.20/T.
Grains mixed overnight as news was light, corn the only to hold steady to 1 higher, soybeans 8 to 10 lower and wheat 3 to 8 lower.
USDA announced private sales totaling 242,000 MT or 8.9 MBU of soybeans. China purchased 4.85 MBU of new crop soybeans while Bangladesh purchased 2 MBU of both old crop and new crop.
Crop progress and conditions will come out this afternoon with updates on corn planting and corn and wheat conditions, soybeans will start next week. US row crop planting pace will accelerate as ground temps begin to warm up. The largest crop concern will continue to be over Brazil’s safrinha or second crop corn production where it is still dry although it is early and forecasts hint at better moisture opportunities this coming weekend and through the end of the month.
Heavy rains in the forecast for the Southeast this week and mostly dry but cool across the Corn Belt. The 6-10 day outlooks still showing much below normal temps though across most of the country, with above normal on the West Coast and creeping into the Southwest. Precipitation chances holding below normal from the PNW through the Corn Belt and above normal in the Southwest and Southeast.
May corn hitting a new contract high on Friday at $5.95 and December at $5.03 ¾. Support for the nearby May contract at $5.50. Old and new crop soybean futures have slipped to a two-week low with May soybeans holding a sideways pattern now for a couple months, support at $13.64 and resistance at $14.60. November still holding a higher trend with the contract high at $12.85 back on April 1st and support at $12.37 then $11.84. May KC wheat breaking the 2 month long trend last week with support holding at $5.53 and resistance at $6.00. May Chicago wheat also turning higher the past couple weeks with support around $6.20 and resistance at $6.50. May MPLS wheat has added over $.60 the past couple weeks to test resistance and the contract high at $6.62 with support at $6.24. May soybean meal holding support at $395 over this past month with nearby resistance at $406.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700