Date: June 22nd, 2022
Feeders benefiting from the sharply lower grains yesterday with $2+ gains as live cattle futures hung around steady all day trading both sides of unchanged. Lean hogs continue to rally as cash was over $4 higher yesterday. Cash fed cattle trade starting this week, reported after the close, at steady to higher with KS at $139, TX at $138 and NE $145 live and $238 dressed. A recap of last week’s trade shows the weighted average a full $4 higher than the week previous on a total of 107,080 head of which 73% were committed for nearby delivery. We have some solid footing now heading through summer and possibly the end of the year in which I would have to call it a steady to higher trend baring anymore unforeseen or what we like to call “black swan” events.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 6/21/2022
This Week: 2,579 Last Week: 1,754 Last Year: 5,009
Compared to last week, steer and heifer calves traded 3.00-7.00 higher while yearlings traded 5.00-10.00 higher. Demand was very good on a light supply of calves and a moderate supply of yearlings.
Miles City Livestock Commission Auction – Miles City, MT
Livestock Weighted Average Report for 6/21/2022
This Week: 1,180 Last Week: 1,124 Last Year: 1,492
Compared to last week, feeder heifers sold 3.00 to 4.00 higher. No comparison for feeder steers due to light receipts this week. Demand for feeder cattle was mostly moderate for very light offerings.
Cattle slaughter on Tuesday estimated at 126,000 head, up 4,000 from last week and from last year. Hog slaughter on Tuesday estimated at 468,000 head, down 1,000 compared to a week ago and down 6,000 compared to a year ago. Monday’s hog slaughter revised 19,000 head lower to 449,000.
Boxed beef cutout values higher on Tuesday on good demand with 143 loads sold.
Choice Cutout__267.56 +1.06
Select Cutout__246.70 +.31
CME Feeder Cattle Index__165.03 +.85
CME Lean Hog Index__110.45 +1.29
Pork Carcass Cutout __110.86 -1.01
National Wtd Avg Cash Carcass Base__118.99 +4.11, 7,930 head
June live cattle set to expire next week holding the $137 to $138 area. August live cattle next up with resistance at $138, the contract high at $141.82 and nearby support around $135 then $132.50. August feeders choppy trade recently and trying to break the down trending channel that has been in place since mid-February. Resistance is in a range from $176.87 to $178.22, the three spike highs over the past three months, with support at $171 then $169.40. July lean hogs a new recent high yesterday with support holding at $103.50 and resistance next up at $114.
Over in the grains, it was corn and soybeans that started the collapse as some of heat has been taken out of the extended forecasts. Shortly after yesterday’s open though, wheat took the reins with KC wheat nearly hitting limit lower. Yes harvest is advancing swiftly but this a bit overdone with 2 days now totally over $1 loss. Moderate temps in the forecast for the Northern Plains along with some much needed moisture in the Canadian prairies also provided some early pressure. Once the selling began in earnest, it became a mass liquidation event.
Export inspections were routine with all except corn exceeding expectations. Corn inspections for the week ending June 16th totaled 46.6 MBU with the average needed per week down to 36.3 MBU. China, Mexico and Japan continue to be the top three destinations. Year to date inspections are now 387 MBU below a year ago at this time as USDA is projecting exports down 303 MBU. Soybean inspections totaled 15.7 MBU, well below the weekly average needed up to 23.6 MBU. USDA has the export estimate 91 MBU below last year while inspections are down 233 MBU. There were only 2.8 MBU of grain sorghum inspected for export, most still heading to China. Wheat inspections down to 12.2 MBU with the average needed at 15.1 MBU. Year to date inspections are already down 22% from a year ago.
Crop conditions were as expected, a couple points worse for both corn and soybeans yet still rated better than a year ago. IL dropped 6 points in the good to excellent ratings for corn and down 10 points in soybeans. Corn planting not reported any longer with emergence at 95% nationwide, ND the lowest at only 68%. Soybeans planted up to 94% nationally. This compares to 97% last year and 93% for the 5-year average. All major producing states at 90% or higher except KS & MO. Soybeans emerged at 83% compared to 90% last year and 84% average. Grain sorghum planting up to 80% nationwide, still behind the average pace and conditions down 1% to 46% G/E and up 1% to 15% P/VP. This compares to 73% G/E and only 3% P/VP last year. Winter wheat harvest advancing 15% last week to now 25% complete. This compares to 15% last year and 22% average. KS harvest at 27% complete, OK and TX both 72%.
Grains mixed overnight as outside markets under heavy pressure as equities are pointing lower and crude oil down over $7/barrel. This is down to prices seen over a month ago with a lower trend now holding over the past couple weeks. President Biden now asking Congress to suspend the federal gas tax through September which is $.18/gallon for gas and $.24/gallon for diesel while also asking states to do the same. Corn finished the overnight steady to 5 lower, soybeans 13 to 21 lower, while wheat getting a little bounce finishing 7 to 16 higher.
Scattered rains from central KS through northern MO and into SE IA overnight with a little break in the excessive heat but still in the forecast into early next week for central states, Southeast and WCB. The 6-10 day outlook still showing above normal temps in the Southeast and out West but below normal from the Southwest up into the Corn Belt with above normal moisture expanding out from the Southwest but still below normal moisture for the Corn Belt.
July corn finding support yesterday at $7.52, holding a lower trend now since the contract high back on April 29th at $8.24 ½ with nearby resistance at $8.00. The December contract testing support at $6.90 with resistance at $7.50. July soybeans a new recent low overnight with the contract high just two weeks ago at $17.84. Support next around $16.50 with nearby resistance at $17.10. The November contract trying to hold the long-term higher trend, but also into a new recent low overnight with support next around $14.40 and resistance around $15.50. July KC Wheat breaking the recent rangebound trading with support next at $10.12 and resistance at $11.60. July Chicago wheat with support at $9.60 and resistance at $10.85. July MPLS wheat support at $11.00 and resistance at $12.20. July Soybean Meal with support around $420 and resistance at $440.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
785-537-3336
IMPORTANT—PLEASE NOTE
This does constitute a solicitation to buy or sell commodities futures and/or options. The information contained herein is provided for informational purposes only. The information is not guaranteed as to its accuracy or completeness, although the information was taken from sources we believe to be reliable. The market recommendations of Loewen and Associates, Inc. are based solely on the judgment of Loewen and Associates, Inc. personnel. We do not guarantee or warranty, either expressed or implied, of success to you in the use of this information. Loewen and Associates, Inc. disclaims responsibility for or loss associated with use of information from our commentary, analysis or recommendations. There is risk of loss in trading commodity futures and options. The risk in trading can be substantial; therefore only genuine “risk” funds should be used.