Date: May 5th, 2021
Cattle futures hit hard on Tuesday and into new recent lows as lean hogs held modest gains. Corn futures held strong gains, nearby May matching the contract high at $7.58 ¼ and the heaviest volume July into a new contract high. Cash feedlot trade already starting with light trade in TX at $119 live, steady to $1 higher than last week. Trade in North picked up yesterday at $117 to $119 live and $188 to $190 dressed which is steady to $2 lower than last week. Typically early week buying is a good sign that packers are in need of inventory. I would say the volume traded so far this week is feedlots seeing steady money and moving them before bids have a chance to pull back. Packers in general have a lot of contracted inventory available to them right now.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 5/4/2021
This Week: 1,916 Last Week: 2,413 Last Year: 2,971
Compared to last week, steer and heifer calves traded steady to 3.00 lower with most weights not well tested. Demand was moderate on a light supply
Joplin Regional Stockyards Feeder Cattle – Carthage, MO
Livestock Weighted Average Report for 5/3/2021
This Week: 4,621 Last Week: 4,825 Last Year: 7,294
Compared to last week, feeder steers and heifers traded steady to 2.00 higher. Supply moderate with good demand.
Oklahoma National Stockyards Feeder Cattle – Oklahoma City, OK
Livestock Weighted Average Report for 5/3/2021
This Week: 5,751 Last Week: 6,163 Last Year: 11,307
Compared to last week: Feeder steers 2.00-3.00 lower. Feeder heifers steady to 3.00 lower.
Steer calves steady to 4.00 higher. Heifer calves steady to 4.00 lower. Calves compared to last week’s light test. Demand moderate to good.
Tulsa Livestock Auction – Tulsa, OK
Livestock Weighted Average Report for 5/3/2021
This Week: 1,967 Last Week: 1,981 Last Year: 2,139
Compared to last week: Steer calves mostly steady. Feeder steers 8.00 higher. Heifers 4.00 higher. Demand good. Quality good. Slaughter cows mostly steady to 2.00 lower. Slaughter bulls 1.00 higher.
Cattle slaughter from Tuesday estimated at 121,000 head, matching last week and up 36,000 from last year. Hog slaughter from Tuesday estimated at 487,000 head, up 1,000 compared to last week and up 185,000 compared to a year ago.
Boxed beef cutout higher on Choice and steady to higher on Select on Tuesday with good volume, 130 loads sold. Choice now second only to the record prices established last year. This run up though is not due to the drastic reduction in supply like a year ago. Restaurants are back in business across the nation and paying up for spot supply. The price gains for middle meats accounting for about 2/3 of the overall increase in the value of the cutout.
Choice Cutout__301.22 +1.92
Select Cutout__283.91 +.12
CME Feeder Cattle Index__132.76 +.13
Lean Hog Index__107.37 +.27
Pork Carcass Cutout__111.18 -.48
IA/MN Wtd Avg Carcass Base__119.27
National Wtd Avg Carcass Base__115.20 +3.53
June live cattle off over $12 since the contract high on April 8th at $125.62. Yesterday’s low at $112.57 is right at the 38% Fibonacci retracement level from the contract high to the contract low back in April 2020. Support next around $110 with resistance from $117.60 to $119. May feeders into a new recent low yesterday at $128.75, the contract low down at $127. We have lost over $24 since the contract high from late March, with nearby resistance at $135.50 then at $144. June lean hogs still holding the long term higher trend with a new contract high yesterday at $113.80 and support around $107.
Corn still the real leader right now in the grain complex but cash markets are still strong for both corn and soybeans. USDA reported 473 MBU of corn consumed for alcohol and other industrial uses in March, +25% from February and +1% from March 2020. Corn for fuel alcohol totaled 420 MBU. Soybean crush for March at 188 MBU, +14% from February but down 2% from March 2020 yet oil production did increase from a year ago. Corn, soybean and spring wheat planting made big strides last week nationwide. Heavy rains in the forecast for the Southern and Eastern Corn Belt, lighter amounts expected but much needed in the Western Corn Belt. Dry conditions continue for south central Brazil, record soybean exports last month at 17.38 MMT or 639 MBU but May already looking to ease some. China has backed off recently on new soybean purchases as stocks build and new African swine fever outbreaks. SovEcon increasing Ukraine wheat production estimates, weaker European markets keeping pressure on U.S. wheat futures while the corn rally helping to support higher wheat prices.
Grains continued the rally overnight with corn finishing 2 to 7 higher, soybeans 10 to 12 higher and wheat steady to 3 higher. News again very light as the markets continue to focus on U.S. and Brazil weather. The EIA Weekly fuel report out later today is expected to show an ethanol production increase of 1% with stocks down 2%.
USDA announced private sales this morning totaling 331,420 MT or 13 MBU of corn. This was a combination of current and new crop for unknown destinations and Mexico. USDA also announced that China cancelled 140,000 MT or 5.5 MBU of corn.
Heavy rains in the forecast for the Southeast and Southern Corn Belt over the weekend and into early next week. This could clip the eastern edges of KS and OK but the Western and Northern Corn Belt are forecasted for less than an inch and some areas are needing more than that already. The 6-10 day outlook still holding below normal temps across the Corn Belt and Plains with above normal only on the West Coast and Gulf Coast states. Above normal precipitation centered on the Southeast and expanding north and west to catch some of the Corn Belt and Plains with below normal in the Dakotas and Great Lakes and in the PNW.
July corn hitting a new contract high yesterday at $7.04 with support at the 10-day moving average currently at $6.61 ½. December corn has held a sharply higher trend since March 31st, the prospective plantings report by USDA, adding $1.43 up to the contract high last week at $5.93 with support at $5.62 ¼. July soybeans contract high last week at $15.74 ¾ and support at $15.25 ¼ then $14.90. November soybeans, like its counterpart December corn, holding the sharply higher trend since March 31st, adding $2 to the contract high last week at $13.84 ¾ with support at $13.45 ¼. July KC wheat contract high last week at $7.41 ¼ and support at $6.83. July Chicago wheat contract high last week at $7.69 ½ with support at $7.14. July MPLS wheat a new contract high on Monday at $7.83 ¾ with support at $7.47 ½ then at $7.25. July soybean meal with nearby support at $414 then around $400 with recent high and resistance at $439 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
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