Date: June 10th, 2021
Livestock futures again mixed yesterday, feeders lower with corn higher, nearby fats higher but deferred contracts lower and lean hogs mostly higher. Cash feedlot trade so far this week on moderate volume in the North and light volume in the South at $119 to $120 live and $190 to $191 dressed, steady now for almost 2 months. June lean hogs yet another new contract high yesterday but the heaviest volume July finishing the session lower. Part of the mixed trading for both livestock and grains coming from news out of China in regards to price controls for wheat, corn and pork. China announced they will be releasing pork reserves to stabilize hog output and prices.
Winter Livestock – Dodge City, KS
Livestock Weighted Average Report for 6/9/2021
This Week: 1,852 Last Week: 1,287 Last Year: 1,658
Compared to last week, feeder steers 875 lb to 950 lb sold 3.00 to 4.00 higher. Steers 500 lb to 875 lb sold 3.00 to 4.00 lower. Feeder heifers 400 lb to 850 lb sold steady to 3.00 higher. Demand was moderate. Slaughter cows sold steady. Slaughter bulls sold 5.00 higher.
Windsor Livestock Auction – Windsor, MO
Livestock Weighted Average Report for 6/9/2021
This Week: 2,381 Last Week: 2,203 Last Year: 1,715
Compared to last week, steers and heifers sold mostly steady except for a few spots 4.00-5.00 lower than last weeks higher market, specifically on the 600-650 lb steers and 500-550 lb heifers. A load of yearling heifers coming off grass sold with a firm to higher undertone but no recent sales to compare to. The quality was good with some top producers calves in town, most of the cattle were in moderate flesh. Supply was moderate and demand was good, very good for 400-500 lb steers. Slaughter cows and bulls sold steady to 1.00 higher
OKC West Livestock Auction – El Reno, OK
Livestock Weighted Average Report for 6/8/2021
This Week: 10,318 Last Week: 5,231 Last Year: 8,449
Compared to last week: Feeder steers traded 3.00-5.00 higher. Feeder heifers sold 2.00-4.00 higher. Demand good. Several large consignments on offer Wednesday. Steer and heifer calves that were long weaned sold with a higher undertone on limited comparable sales. Demand moderate to good.
Cattle slaughter from Wednesday estimated at 120,000 head, up 15,000 from last week and up 4,000 from last year. Hog slaughter from Wednesday estimated at 485,000 head, up 46,000 compared to a week ago and up 37,000 compared to a year ago.
Boxed beef cutout values Wednesday steady on Choice and higher on Select on moderate to good demand with 102 loads sold.
Choice Cutout__338.65 +.04
Select Cutout__307.87 +1.69
CME Feeder Cattle Index__140.04 -.08
CME Lean Hog Index__118.71 +.94
Pork Carcass Cutout__134.38 -.56
IA/MN Wtd Avg Carcass Base__123.86 +4.15
National Wtd Avg Carcass Base__115.00 +2.66
Export sales and shipments for the week ending June 3rd were friendly for beef but not for pork.
Beef: Net sales of 16,100 MT, up 28% from the previous week, but down 17% percent from the prior 4-week average. The top buyers were Japan, South Korea, Mexico and China. Exports of 21,100 MT–a marketing-year high–were up 70% from the previous week and 22% from the prior 4-week average. The top 3 destinations taking a combined 72% of the total were South Korea, Japan and China.
Pork: Net sales of 19,700 MT, down 19% from the previous week and 24% from the prior 4-week average. China #1 buying 8,100 MT followed by Mexico, Colombia and Japan. Exports of 27,500 MT–a marketing-year low–were down 25% from the previous week and 32% from the prior 4-week average. The top destinations were Mexico, China, Japan, South Korea and Canada.
June live cattle still chopping sideways with resistance holding at $118 and support at $116. August feeders a bit more volatile with a $20+ range over the past two months. Nearby resistance at $152 and support down at $145. June lean hogs expire Monday and volume getting thin with a new contract high at $121.02 yesterday and support around $115. The July contract with support at $118.50, the contract high hit Monday and Tuesday at $123.60 and the next upside target at $133.87, the all-time spot high from July 2014.
Grains mixed yesterday with corn higher which supported KC wheat but soybeans leading the charge lower followed by MPLS and Chicago wheat. The forecasts still calling for hot and dry and expanding further into the WCB and the Southwest but some nearby relief over the past couple days and in the forecast for the rest of this week for the dry Dakotas.
EIA weekly energy report was supportive, increasing this past week by 33,000 bpd to now 1.067 million bpd production for ethanol, up to a new 65 week high or basically back to pre-COVID levels. Stocks have increased the past couple weeks but overall still sit at a 7-year low. Gas demand increasing weekly but the 4-week average still down 5% from pre COVID levels or compared to same time period during 2017-2019. Crude Oil stocks down 5.24 million barrels with expectations of only a decrease of 2 million and refinery capacity back up to 91.3%.
Grains were mixed and traded both sides of unchanged overnight. Corn finished the overnight 4 to 8 higher, soybeans 11 to 13 higher and wheat 1 to 3 higher in KC and MPLS but 3 lower in Chicago.
Export sales for the week ending June 3rd were near the bottom end of expectations. Wheat: Net sales of 11.97 MBU for the 2021/2022 marketing year, which began June 1, were primarily for South Korea, the Philippines, unknown destinations, Honduras and Nigeria. A total of 30.8 MBU in sales were carried over from the 2020/2021 marketing year, which ended May 31. Exports with Census adjusted through April should be at 944 MBU with USDA’s current estimate at 965 MBU. We will see if that gets adjusted any later this morning. Corn: Net sales of 7.5 MBU, down 64% from the previous week and 39% from the prior 4-week average. The top three buyers are Japan, China and Colombia. For 2021/2022, net sales of only 1 MBU.
Grain Sorghum: Net sales reduction of 165K BU, increase for China of 2 MBU but switched from unknown destinations and decreased a total of 2.165 MBU.
Soybeans: Net sales of 577K BU, down 12% percent from the previous week and 75% percent from the prior 4-week average. Increases for Indonesia and Mexico but a total of 5.6 MBU decreased from unknown destinations and shifted from old to new crop by Hong Kong.
Brazil’s CONAB out this morning with updated production estimates that nearly match the average trade estimates for today’s USDA report. Corn maybe a bit friendlier as CONAB dropped total corn production 10 MMT to 96.38 MMT. Soybean production up slightly to 135.86 MMT. USDA last month was estimating 102 MMT for corn and 136 MMT for soybeans. The average trade estimate is 97.32 MMT for corn and 136.16 for soybeans.
USDA will update Wheat production & supply/demand estimates for all crops at 11AM CST. This should be somewhat of minor demand adjustment report. The next big report is the updated U.S. acreage at the end of June. The average trade estimates are as follows…
US 21/22 All Wheat production at 1.892 BBU compared to May at 1.872 BBU
1.312 BBU winter wheat – 760 MBU HRW, 333 MBU SRW and 216 MBU white winter wheat
US 20/21 Corn ending stocks at 1.201 BBU, down from May’s 1.257 BBU
US 20/21 Soybean ending stocks at 122 MBU, down from May’s 120 MBU
US 20/21 Wheat ending stocks at 869 MBU, down from May’s 872 MBU
US 21/22 Corn ending stocks are expected at 1.423 BBU, May at 1.507 BBU
US 21/22 Soybean ending stocks are expected at 145 MBU, May at 140 MBU
US 21/22 Wheat ending stocks are expected at 783 MBU, May at 774 MBU
World 20/21 Corn ending stocks at 280.8 MMT versus May at 283.53 MMT
World 20/21 Soybean ending stocks at 87.1 MMT versus May’s at 86.55 MMT
World 20/21 Wheat ending stocks at 294.4 MMT versus May at 294.67 MMT
World 21/22 Corn ending stocks forecast at 289.2 MMT, May at 292.3 MMT
World 21/22 Soybean ending stocks forecast at 91.2 MMT, May at 91.1 MMT
World 21/22 Wheat ending stocks forecast at 294.5 MMT, May at 294.96 MMT
20/21 Argentina Corn production at 47.0 MMT unchanged from last month
20/21 Brazil Corn production at 97.3 MMT down from May’s 102.0 MMT
20/21 Argentina Soybean production at 46.6 MMT down from last month’s 47.0 MMT
20/21 Brazil Soybean production at 136.1 MMT up from May’s 136.0 MMT
The recent rains in the Dakotas being reported as much less than radar indicated by most, a few storm chances again today. Hot and mostly dry for the rest of this week for all major growing areas. The 6-10 day outlook continues to show above normal temps, now pulling west as normal to even below normal temps appear in the ECB with below normal moisture for all except in the Southeast.
July corn hit a new recent high Monday at $7.06 ¼ with the contract high the next resistance at $7.35 ¼ and nearby support around $6.70. December corn into a new recent high Monday at $6.18 ¼ with the contract high the next resistance at $6.38 and support at $5.84 then $5.60. July soybeans with resistance at the contract high from May 12th at $16.67 ½ and support at $15.50. November soybeans hit a new contract high Monday at $14.80 with support at $14.20. July KC wheat with support around $6.20 and resistance at $6.54. July Chicago wheat with support at $6.70 and resistance around $7.00. July MPLS wheat with support at $7.37 and resistance up around $8.00. July soybean meal with support around $380 and resistance at $403.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell
www.loewenassociates.com matt@loewenassociates.com
866-341-6700