Date: May 3rd, 2021
Livestock futures mixed with feeders at the mercy of corn futures again last Friday. We started trading higher until corn got a bid and raced into new highs which caused feeders to finish triple digits lower. April live cattle expired on Friday down over $3 at $116 with all other live cattle contracts holding decent gains. Lean hogs have been whipsawing back and forth off technical trading this past week. Looking at the June contract specifically, a gap higher move on Wednesday to finish back above $109, then triple digits lower to fill the gap on Thursday, to Friday’s lock limit $3 higher. Negotiated cash fed cattle last week selling nationwide for mostly $118 to $120 live and $191 on a dressed basis which was steady to $4 lower than the week previous and on lighter volume. Packers are still chalk full of forward contracted cattle which doesn’t bode well for this week’s cash trade either. The bright spot continues to be higher beef prices and strong domestic and export demand.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 4/25/2021 – 5/1/2021
Current Week: 23,039 Last Report 4/19/21: 25,968 Last Year: 37,653
Compared to last week: Feeder steers and heifers steady to 5.00 lower. Steer and heifer calves sold 4.00-8.00 lower. Demand moderate for all classes.
For the week, Friday April 23rd through Friday April 30th, April Live Cattle -$1.85, June +$.85, August +$1.77, May Feeder Cattle -$4.07, August -$3.15, June Lean Hogs +$4.00, July +$4.72. May Pork Carcass Cutout Futures -$1.02. Boxed Beef, Choice +$12.73 @ $296.50, Select +$10.92 @ $283.05, Pork Carcass Cutout -$1.48 @ $110.46.
Cattle slaughter from Friday estimated at 115,000 head and Saturday at 57,000. For the week, 649,000 head, down 16,000 from the week previous but up 210,000 from last year. Year to date slaughter now +3.5% compared to last year. Hog slaughter from Friday estimated at 470,000 head and Saturday at 51,000. For the week, 2,454,000 head, down 19,000 compared to the week previous but up 914,000 compared to a year ago. Year to date slaughter now just 3,000 head above of a year ago.
Boxed beef cutout values sharply higher last Friday on weak demand with only 78 loads sold.
Choice Cutout__296.50 +2.74
Select Cutout__283.05 +3.26
CME Feeder Cattle Index__134.13 -.94
CME Lean Hog Index__106.89 unchanged
Pork Carcass Cutout__110.46 +2.91
IA/MN Wtd Avg Carcass Base__116.49 -.60
National Wtd Avg Carcass Base__112.49 +1.39
June live cattle off around $10 since the contract high on April 8th at $125.62. Nearby support at last week’s low $114.55 then around $112 from the beginning of the year with resistance at $117.60 then $119.80. May feeders into a new recent low on Friday and now off nearly $20 since the contract high from late March. Support is down at $130 then the contract low at $127 with resistance at $140.55 then $144. June lean hogs still holding the long term higher trend but strong resistance so far this month around $110 with support at $106.30.
Grains began last Friday very subdued with most looking for some mild liquidation and profit taking as trading volume was light with limited new fundamental news, European markets closed and China closed today through Wednesday. Bids heated up by midday led by the corn market with the May contract hitting new highs at $7.46 ¼, now the highest spot price seen since March 2013. July corn finished the $.25 limit higher with over 127K contracts bid limit up within the last minute of trading. Soybeans and wheat followed higher on Friday after pulling back lower from the new contract highs hit last Tuesday. MPLS wheat the leader still amongst the 3 wheat classes. The U.S. drought monitor updated last week indicating that 82% of the spring wheat acres in drought, most of which listed as D3 or extreme. The CME has increased daily price limits effective today. Soybeans will go from 70 cents to $1.00, meal from $25 to $30, oil from 2.5 to 3.5 cents, corn from 25 to 40 cents and wheat from 40 to 45 cents. Margin requirements have already been increasing along with the higher values now and increased volatility.
For the week, Friday April 23rd through Friday April 30th, May Corn +$.84 ½, July +$.40 ¾, December +$.13, May Soybeans +$.31 ¼, July +$.18 ¼, November -$.01 ¾, May KC Wheat +$.25, July +$.23, May Chicago Wheat +$.32 ¼, July +$.22 ½, May MPLS Wheat +$.44 ¾, July +$.38 ¼, September +$.37 ¼, May Soybean Meal +$3.60/T, July +$.30/T.
Overnight all grains trading higher as forecasted rains for the Dakotas and evenly locally have been disappointing. There was a decent but very thin band from NC KS up to WI over the past 24 hours. Corn finished the overnight 12 to 21 higher, soybeans 18 to 20 higher and wheat 9 to 12 higher.
News light again over the weekend. USDA will report March soybean crush later today with expectations of 5.65 million tons compared to just 4.93 million tons in February. Crop progress and conditions also will be updated later this afternoon. Average trade estimates looking for corn planting to be just under 50% complete, that would be a 30% gain last week, and soybean planting around a 35% complete. South Korea booked one cargo of optional origin corn overnight. No USDA private sales announced this morning and multiple wheat tenders this week.
Brazil still dry, but this is their “dry season”. The second crop corn is at risk though with chatter late last week and into today that their crop could be reduced at least 5 MMT up to 20 MMT or 200 to 700+ MBU. This would be a huge change to the world feed grains picture which is part of the reason corn and wheat futures have been so strong.
Only the Southern part of the Corn Belt and Southeast now forecasted to get soaking to heavy rains this week. The 6-10 day outlook showing above normal temps centered in TX and fanning out from NM to KS to MI and below normal across the rest of the U.S. with above normal moisture across the Northern Plains and Corn Belt.
July corn gapping higher overnight and into a new contract high at $6.98 with support at the 10-day moving average currently at $6.43 ½. July soybeans also gapping higher but about a dime away from the contract high last week at $15.74 ¾ and support at $15.13 then $14.90. July KC wheat similar to July soybeans, gapping higher overnight but still some 20 cents away from the contract high last week at $7.41 ¼ and support at $6.85. July Chicago wheat, same, gap higher overnight, contract high last week at $7.69 ½ with support at $7.16 ¼. July MPLS wheat gapping higher overnight and hit a new contract high at $7.83 ¾ with support around at $7.31 ½ then at $7.25. July soybean meal with nearby support at $415 then around $400 with recent high and resistance at $449 and the contract high at $458.20 back on January 13th.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700