Date: May 23rd, 2022
Cattle futures mixed to mostly lower for feeders, as lean hogs continued to rally off new recent lows. Four out of the last six trading days, lean hogs have closed triple digits higher supported by higher cash and pork prices. May feeders tested the contract lows from last year at $153 as August forward made new contract lows on Friday. Negotiated cash fed cattle trade was $2 to $3 lower than the week previous with KS slipping off the $140 mark for the first in the past 5 weeks. Trade in TX and KS from $136 to $138 live with most at $138 and trade in the North from $140 to $145 live and $223 to $228 dressed, majority at $226.
After the close, USDA released the Cattle on Feed report which was yet again bearish. Cattle and calves on feed totaled 12.0 million head on May 1, 2022. The inventory was 2% above a year ago, a new record May on feed total and 0.5% above the average trade estimate. Placements in feedlots during April totaled 1.81 million head, 1% percent below 2021 but 2.5% above the average trade estimates. Marketings of fed cattle during April were in line with expectations at 1.89 million head, 2% below a year ago.
For the week, Friday May 13th through Friday May 20th, June Live Cattle -$.05, August -$.80, May Feeder Cattle -$4.47, August -$4.10, June Lean Hogs +$8.12, July +$7.80. Boxed Beef, Choice +$3.22 @ $262.17, Select -$.88 @ $243.02, Pork Carcass Cutout +$5.94 @ $107.11.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 5/15/2022 – 5/21/2022
Current Week: 34,632 Last Report 5/9/22: 28,105 Last Year: 25,325
Compared to last week: Feeder steers sold 1.00-3.00 lower. Feeder heifers 3.00-6.00 lower. Demand light to moderate for feeder cattle as corn futures traded mostly on the plus side forcing feeder futures lower.
Cattle slaughter from Friday estimated at 123,000 head and Saturday 58,000 head. For the week, 680,000 head, up 23,000 from the week previous and up 8,000 from last year. Beef production estimated at 561.8 million pounds with the year to date difference at +0.9% vs. last year and year to date slaughter +0.7%.
Hog slaughter from Friday estimated at 457,000 head and Saturday 58,000 head. For the week, 2,414,000 head, up 39,000 compared to the week previous and up 23,000 compared to a year ago. Pork production last week estimated at 527.6 million pounds with year to date pork production at -4.5% compared to a year ago and hog slaughter -4.9%.
Boxed beef cutout values on Friday higher on Choice and lower on Select on light to moderate demand with 90 loads sold.
Choice Cutout__262.17 +.47
Select Cutout__243.02 -3.04
CME Feeder Cattle Index__153.05 -.41
CME Lean Hog Index__101.17 +.80
Pork Carcass Cutout __107.11 +3.65
National Wtd Avg Cash Carcass Base__112.97 +2.46, 7,040 head
June live cattle still holding a lower trend and steep discount to cash with support right around $131 with the May low just above and March low just below and resistance around $135. May feeders holding a 3-month long lower trend with the contract low from last June down at $153. Again, August forward contracts into new contract lows to end last week. Looking at the continuous weekly chart, support next is down at $150. June lean hogs finding support at $97 and since rebounding higher with resistance next up around $112.
Continued old crop soybean demand supporting the soy complex last week as corn slipped lower and the wild wheat markets traded new highs, $1 higher early in the week compared to the close on the 13th, but collapsed to finish sharply lower the rest of the week. China continues to buy U.S. old crop soybeans which is unheard of this late in the marketing year. Wheat jumped limit higher last Monday on news that India would be banning exports. This was a bit of an overreaction and markets corrected for the balance of the week. The KS Wheat Quality Tour estimated that 25% of the SW KS wheat fields may be abandoned as they published a state wide yield estimate near USDA at 39.7 BPA. Ukraine reportedly has been able to plant nearly 98% of the expected spring wheat acres, still down 25% from a year ago. European wheat now in the hot seat as conditions in France have come down nearly 20% in the past two weeks. Good corn planting progress here in the U.S. kept pressure on futures along with comments from Argentina that they may raise their corn export limit by 5 MMT this year.
The CFTC Commitment of Traders Report showed managed fund money through the trade week ending 5/17 buyers of all grains. They added 1.1k corn contracts (net long 339.7k), +11.0k Chicago wheat (net long 26.5k), +3.8k KC Wheat (net long 46.7k), +16.6k soybeans (net long 147.3k).
For the week, Friday May 13th through Friday May 20th, July Corn -$.02 ½, December -$.16 ¾, July Soybeans +$.58 ¾, November +$.23 ½, July KC Wheat -$.29 ¼, September -$.27, July Chicago Wheat -$.08 ¾, September -$.06 ½, July MPLS Wheat -$.46, September -$.40, July Soybean Meal +$20.60, October +$14.10.
Wheat still the price leader for the grains has all were higher overnight. Equities and energies higher this morning as the US$ is lower. There was some chatter heading into the weekend about well below normal temps in central Brazil and possible frost on their second crop corn. Corn finished the overnight 3 to 4 higher, soybeans 2 to 10 higher and wheat 13 to 20 higher. Not only has it been China still buying old crop soybeans, but this morning USDA also announced a sale of 130,000 MT or 4.8 MBU of old crop soybeans sold to Egypt.
USDA will update crop progress later this afternoon with the expectations to see around half the soybean crop planted and 2/3 the corn crop planted. Still well behind the average pace for each, but some decent progress the past two weeks. Heavy rains expected this week in the Southeast and the eastern half of the Southern Plains and into the Corn Belt. The 6-10 day outlook showing below normal temps in the Northwest with above normal temps for the Southern Plains and Corn Belt and above normal moisture for the most major crop areas.
July corn still holding support at $7.69 with the contract high from April 29th at $8.24 ½. The December contract hit a new contract high last Monday at $7.66 ¼ with support at $7.27. July soybeans still very choppy trade, holding a higher trend now since May 9th with support at $16.45 and resistance at $17.34. The November contract still holding a long term higher trend with support around $14.50 and resistance at $15.40. July KC Wheat a new all-time high for a July contract last week at $13.79 ¼ all the way down to $12.50 support. July Chicago wheat a new contract high on Tuesday at $12.84 down to support at $11.68. July MPLS wheat a new contact high last Tuesday at $14.12 ¾ and support at $12.76. July Soybean Meal with support at $408 and resistance at $435.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
785-537-3336
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