Date: May 17th, 2021
Livestock futures ended last week mixed. Feeders able to hold gains as corn futures took another hit lower. Fats and lean hogs though weaker on Friday and for the week. Cash feedlot trade last week was fairly light volume with some trades for delivery 30 days out. Trade in the North started early in the week at $120 to $121 live and $191 dressed which is steady to $2 higher than the week previous. Trade in the South picked up midweek at $119 to $120 live, $1 higher on average compared to the week previous. Cattle slaughter still less than expected and keeping a lid on any sustained cash rally.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 5/9/2021 – 5/15/2021
Current Week: 24,842 Last Report: 23,580 Last Year: 37,366
Compared to last week: Feeder steers and heifers sold 3.00-5.00 higher with improved demand. Steer and heifer calves unevenly steady. Demand moderate to good for calves. Some sale barns reporting an increased number of new crop calves.
For the week, Friday May 7th through Friday May 14th, June Live Cattle -$.72, August -$.02, May Feeder Cattle +$5.82, August +$6.87, June Lean Hogs -$4.12, July -$4.55. May Pork Carcass Cutout Futures -$.27. Boxed Beef, Choice +$11.06 @ $316.94, Select +$2.92 @ $293.19, Pork Carcass Cutout +$1.91 @ $115.70.
Cattle slaughter from Friday estimated at 115,000 head and Saturday at 62,000. For the week, 640,000 head, up 2,000 from the week previous and up 121,000 from last year. Year to date slaughter now +5.7% compared to last year and beef production +6.9%. Hog slaughter from Friday estimated at 461,000 head and Saturday at 14,000. For the week, 2,395,000 head, down 13,000 compared to the week previous but up 261,000 compared to a year ago. Year to date slaughter now +1.8% compared to a year ago and pork production +2.9%.
Boxed beef cutout values Friday steady on Choice and lower on Select on moderate demand with 107 loads sold.
Choice Cutout__316.94 +.16
Select Cutout__293.19 -2.72
CME Feeder Cattle Index__131.73 +.72
Lean Hog Index__110.93 -.01
Pork Carcass Cutout__115.70 -.49
IA/MN Wtd Avg Carcass Base__116.99 -.35
National Wtd Avg Carcass Base__112.25 -1.20
June live cattle rebounded off the recent low at $112.57 which is right at the 38% Fibonacci retracement level from the contract high to the contract low back in April 2020. Mid last week, June hit resistance though just under $120 and reversed sharply lower with support again at $112.57. May feeders hit a new recent low on May 6th at $128.50 but have rallied sharply since with resistance next up around $140. June lean hogs now the front month and holding a lower trend since the new contract high at $115 on May 6th. The long term higher trend still holding with that trendline support around $107.
Corn under pressure again to end the week as soybeans finished higher and wheat mixed. There was some good news for the corn market…China bought more new crop corn. U.S. Coast Guard announced Friday morning that vessel traffic on the Mississippi River could resume and restrictions around the Memphis bridge were lifted. Corn futures just couldn’t ever catch and sustain a bid though. Then midday, Informa released its update acreage projections that sent corn futures sharply lower again and into the close. They now project corn planted acres will be 96.8 million, +3.26 from their estimate last month and up 5.7 million from USDA March intentions. This shouldn’t have been such a shock to the market as we all know price should be buying additional acres. The shock may be that soybean acres up less 1 million and spring wheat acres down 130,000. July corn led the charge lower also on Friday, down $.30 after the limit $.40 on Thursday, pointing towards fund liquidation moving the needle as the New Crop December contract was only down $.15. The CFTC Commitment of Traders Report showed funds selling 52K corn contracts for the week ending 5/11 and they could be net long only 250K after Friday which would be their smallest net long position in months.
For the week, Friday May 7th through Friday May 14th, July Corn -$.88 ½, December -$.93 ¾, July Soybeans -$.03 ½, November -$.32 ¾, July KC Wheat -$.79, September -$.77 ½, July Chicago Wheat -$.54 ½, September -$.55 ¾, July MPLS Wheat -$.56 ¾, September -$.56 ¼, July Soybean Meal -$23.30/T, December -$18.70/T.
Overnight grains opened lower and most bottomed out around 9:30 last night. Nearby soybeans and corn led the charge back into positive territory this morning with corn finishing 1 lower to 5 higher, soybeans 2 to 9 higher and wheat 5 to 7 lower for KC and Chicago wheat but 23 lower for MPLS.
Multiple buyers from South Korea purchasing at least 10 MBU of optional origin new crop corn between late Friday and overnight. Taiwan purchased 3.3 MBU of U.S. milling wheat. USDA announced private sales this morning of new crop corn totaling 1,828,000 MT or nearly 72 MBU. China purchased another massive round of 66.9 MBU with Mexico buying 5 MBU. NOPA will release its April soybean crush data later today with most looking for slightly slower processing rate. The average trade estimate is at 168.7 MBU soybeans crushed domestically compared to 178 MBU in March and 171.75 MBU in April 2020. Crop progress and conditions will be updated later this afternoon, the market is looking for strong planting progress again this past week. Corn planting was 67% complete the week previous with the average trade guess up to 80%. Soybeans planted at 42% and expectations to see near 60%.
Heavy rains still in the forecast this week for the Southeast and portions of the Southern Plains. The 6-10 day outlook showing above normal temps from the Central Plains to the East Coast with below normal out West and above normal moisture from the Southern Plains up into the Great Lakes with below normal in the Southeast and Southwest.
July corn down over a $1 from the contract high on May 7th at $7.35 ¼ to the overnight low. The $6.30 area is nearby support with resistance at $6.70 then $6.97. December corn down $1.11 from the contract high on May 7th at $6.38 to the overnight low with nearby support next at $5.10 and resistance at $5.71 then $5.90. July soybeans a new contract high last week at $16.67 ½ and support still holding the past 3 sessions at $15.75. November soybeans holding the sharply higher trend since March 31st which is now support at $13.65 and a new contract high last week at $14.61. July KC wheat a double top around $7.41 and support now at $6.30. July Chicago wheat also a double top around $7.68 with support at $6.90 then $6.65. July MPLS down over a $1 since the May 7th contract high at $8.07 ¼ with support next at $6.83. July soybean meal holding support around $415 with resistance at $432.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700