Date: June 2nd, 2021
Cattle futures sharply lower, lean hogs and all grains sharply higher to start the new month. The JBS cyber-attack over the weekend along with sharply higher corn futures put massive pressure on the cattle markets yesterday. CME also expanded daily limits for cattle with live cattle now able to trade $4/cwt and feeders $6.25/cwt, feeders even touched that limit lower yesterday in the first few minutes of trade. As of the close, JBS had cut production or shifts in its five largest beef plants here in the U.S. which accounts for 22,500 head per day. This was confirmed by the slaughter numbers released by USDA for Tuesday with cattle slaughter down 27K and hog slaughter down 95K from last week. Late yesterday and so far today, all indications from JBS are that the vast majority of plants will be back in operation today.
NATIONAL FEEDER & STOCKER CATTLE SUMMARY – WEEK ENDING 05/28/2021
RECEIPTS: Auctions Direct Video/Internet Total
This Week: 150,800 33,200 10,500 194,500
Last Week: 159,400 35,900 31,900 227,200
Year Ago: 138,200 42,000 57,600 237,800
Compared to last week, steers and heifers sold steady to 4.00 higher in the North and South Central regions, while the Southeast region was reported 1.00 to 3.00 lower on the week. Demand was reported as good to very good at auctions this week due to early week sales not having auctions on May 31 and June 1 in observance of the Memorial Day holiday. In addition, many auctions in the North Plains are already on summer schedules with auctions only occurring every two weeks. There are some caveats to that as the much of Dakotas continue to be in severe to extreme drought conditions. Over 75 pct of North Dakota falls in the D3 (Extreme) drought designation or worse, while over 10 pct of South Dakota is in that label. Iowa is being touched by drought as well as the Northwest corner of the state accounts for the near 8 pct of state in the D2 (Severe) designation.
Kingsville Livestock Auction – Kingsville, MO
Livestock Weighted Average Report for 6/1/2021
This Week: 1,848 Last Week: 2,380 Last Year: 4,365
Compared to last week, steer calves and light yearling steers sold steady to 2.00 lower. Heavier yearling steers didn’t have a recent comparison, however a firm undertone noted on the offerings available. Heifers under 500 lbs weaker on limited comparison; over 500 lbs sold steady to 2.00 higher. Demand moderate to good as supply was moderate.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 6/1/2021
This Week: 2,812 Last Week: 4,188 Last Year: 4,462
Compared to last week, feeder steers traded 3.00-6.00 lower while feeder heifers traded 2.00-4.00 lower. Yearling steers traded steady to weak while yearling heifers traded 3.00 higher. Demand was light early and improved throughout the day on a moderate supply. Receipts were lighter than expected as rain moved across the area.
Cattle and hog slaughter from Monday both estimated at 2,000 head. Tuesday’s cattle slaughter at 94,000, down 27,000 from last week and even down 21,000 from last year. Hog slaughter from Tuesday estimated at 390,000 down 95,000 compared to last week and down 28,000 compared to a year ago.
Boxed beef cutout values on Tuesday sharply higher on strong demand with 139 loads sold.
Choice Cutout__334.56 +3.59
Select Cutout__306.45 +5.55
CME Feeder Cattle Index__136.46 +.20
CME Lean Hog Index__113.54 +.10
Pork Carcass Cutout__127.12 +.53
IA/MN Wtd Avg Carcass Base__112.61 +.64
National Wtd Avg Carcass Base__108.92 +3.60
June live cattle gapping lower yesterday and taking out the May low for a new 6-month low at $111.47 with support down at $110 and resistance from $116 to $118. August feeders also gapping lower with support at $141.52, the May low, and resistance around $153. June lean hogs hitting another new contract high at $118.90 with support around $113. The spot high from August 2014 was at $118.82 with the next upside target the all-time spot high at $133.87.
Grains were led higher by the first hot and dry forecasts for the growing season mostly in the Northern Plains and Upper Midwest after a very late season frost/freeze over the weekend in the same area. Corn briefly touched limit up. Export inspections were very strong for corn at 80.7 MBU, China taking half the total and grain sorghum inspections at 6.4 MBU, China taking all but 25K bushels. Soybeans inspections matched a week ago at 7.1 MBU while wheat was very disappointing at 9.4 MBU as the marketing year wrapped up on Monday.
Soybeans crushed for crude oil totaled 169.8 MBU in April 2021, under the trade expectations at 171.1 MBU and compared with 188 MBU in March 2021 and 183 MBU in April 2020. This confirms the previous NOPA data showing the slowdown of soybean processing and rationing of old crop. Total corn consumed for alcohol and other uses was 464 MBU (410 MBU for fuel alcohol) in April 2021, down 2% from March 2021 but up 55% from April 2020.
USDA Monday weekly crop progress report showed corn planting progress at 95% complete compared to last week’s 90%, last year’s 92% and 5-year average at 87% with emergence at 81%. CO and KS the only two states behind their respected average. Soybean planting nationwide now at 84% complete compared to last week’s 75%, last year’s 74% and 5-year average at 67% with emergence at 62%. The only two states behind pace are MO and LA. Spring Wheat planting progress at 97% complete compared to last week’s 94%, last year’s 90% and 5-year average 93% with emergence at 80%. Grain sorghum planting progress at 41% complete, still a little behind the average and Winter Wheat headed at 79%.
Crop conditions by USDA yesterday afternoon showed G/E corn better than expected at 76%. This was the first national corn conditions report for this marketing year. Winter wheat was in line with expectations at 48% (KS & OK +6%), and spring wheat worse than expected at only 43% G/E, down 2% from last week and down 37% from last year.
Overnight grains were mostly higher as MPLS wheat again leading the charge. Corn finished the overnight steady to 1 higher, soybeans 6 to 11 higher and wheat 4 to 7 higher for KC and Chicago with MPLS wheat 15 to 23 higher.
The weather markets continue. Last night, the European model was dry for the western Corn Belt but the GFS model added moisture for the Northern Plains. The biggest weather threats this week remain the hot and dry in the North and heavy rains in the Gulf. The 6-10 day outlook showing above normal temps from the Rockies to the East Coast and covering the entire Northern Plains and Corn Belt and below normal on the West Coast and in TX with above normal moisture in the Southeast and below normal from the Rockies into the Western Corn Belt.
July corn making a new recent low last week at $6.02 ¾ to a new recent high yesterday at $6.96 ¾ with the contract high up at $7.35 ¼. December corn with a low last week at $5.00 ¼, yesterday’s high at $5.85 ½ and contract high at $6.38. July soybeans with support at $15.30 and resistance around $16.00. November soybeans with support at $13.71 and resistance tested yesterday around $14.20. July KC wheat with support at $6.22 and resistance at $6.56. July Chicago wheat with support around $6.60 and resistance around $7.00. July MPLS wheat looking to test the contract high at $8.07 ¼ from May 7th with support at $7.36. July soybean meal hitting $378.30 last week, a new 6-month low with support next at $375 and resistance at $413.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700