Date: July 6th, 2022
Well, I guess we can call yesterday’s markets an explosion, maybe the better term is implosion though coming off the 3-day holiday weekend. Cattle futures did open higher yesterday but quickly moved and held triple digits losses as equites, energies and all grains lower and a sharply higher US$. Lean hogs were the only Ag commodities to hold gains as cash prices and pork values jumped to support the front two months. We should be able hold steady cash fed cattle trade again this week and continue to see the premiums paid in the North. Showlists are mixed, a bit bigger in the North and smaller in the South, but all still very manageable supplies. I think the questions still exist moving forward though, can beef demand hold up through the summer and will slaughter levels remain 650K+ per week?
No sale barn reports from Monday as all were closed for Independence Day.
Ozarks Regional Stockyards Feeder Cattle – West Plains, MO
Livestock Weighted Average Report for 7/5/2022 – Final
This Week: 3,565 Last Week: 6,094 Last Year: 2,177
Compared to last week, lightly tested steer and heifer calves traded steady to 3.00 higher while well tested yearling steers traded 3.00-6.00 higher. Demand was good on a light supply of calves and a heavy supply of yearlings. 7 weight index steers averaging $164-$165 and 8 weights averaging $161-$164.
Cattle slaughter on Tuesday estimated at 126,000 head, matching last week and up 6,000 from last year. Hog slaughter on Tuesday estimated at 458,000 head, up 8,000 compared to a week ago but down 6,000 compared to a year ago.
Boxed beef cutout values higher on Choice but lower on Select on moderate demand with 109 loads sold.
Choice Cutout__264.66 +.84
Select Cutout__239.87 -.60
CME Feeder Cattle Index__165.67 from June 30th
CME Lean Hog Index__110.58 -.12
Pork Carcass Cutout __114.48 +5.73
National Wtd Avg Cash Carcass Base__120.46 +6.24, 13,765 head
August live cattle holding a long term higher trend but short term, about a month long, lower trend. Nearby support is at $131.70, last week’s low, then $129.97, the low from June, with resistance up at $136 then $138. August feeders trending higher for around a month and half with strong resistance from $176 to $177 and support at $170.50. July lean hogs coiling or consolidating the trading range over the past few weeks with resistance just shy of $113 and support at $109.
Grains gapped lower on a hard open, no overnight trade, as funds continue to be sellers and one could say now that all the weather and even war premium has been taken out. Corn, beans and wheat futures are all now back too or even below levels traded prior to Russia invading Ukraine. The war is still ongoing, exports still going out through the Black Sea from Ukraine but there’s an overall fear or worry sweeping the markets about world economies, slowdowns and recession looming from trying to control inflation. Decent rains over the weekend helping spark some of the initial selling as well as heat builds yet still some decent rain in the forecast this week for the majority of Corn Belt.
Weekly export inspections didn’t help yesterday as all were below expectations and their weekly average need. Corn inspections totaled 26.6 MBU, 1st time below the average needed to meet the current USDA estimate since May 1st. Year to date inspections down 17% from last year with the USDA export estimate down 11%. Soybean inspections totaled 13.0 MBU and year to date down 10%. The current USDA export estimate is only 4% lower the year previous. Wheat inspections totaled only 4.1 MBU bringing the month of June, the first full month of the new marketing year up to 53.3 MBU. This compares to 70 MBU inspected for export last June.
After the close, crop conditions slightly worse than expected with G/E corn down 3% to 64% and soybeans down 2% to 63%. Winter wheat harvest gaining 13% to 54% complete nationwide and spring wheat conditions improving 7% to 66% now rated G/E. Some nasty storms rolled through parts of the WCB late in the afternoon. Expanded limits for the soy complex announced by the CME group for today’s trade due to several soybean oil contracts locking limit lower…beans to $1.75/BU, meal to $45/T and oil to $.07 ½/lb.
European markets higher overnight but Asian markets lower. Gains had a quiet rebound, but posted the best gains from 6 am on. Corn finished the overnight 4 higher, soybeans 19 to 21 higher and wheat 10 to 24 higher. Outside markets mixed with equites steady to higher, energies steady to lower and the US$ into yet another new high.
Excessive heat still around for the next few days from the Plains and stretching up into the Corn Belt with heavy rains for the Southeast and Midwest. The 6-10 day forecast now showing above normal temps for the South and western half of the U.S. with below normal precip from the PNW to the WCB and above normal in the Southern Plains, Southeast and East Coast.
All new recent lows and most contracts still showing a gap from the Tuesday open. September corn down to $5.82 ½ with support next around $5.75 and resistance at $6.75. The December contract down to $5.71 with support next at $5.65 and resistance around $6.60. August soybeans a new recent low overnight with support next at $13.70, the gap from $14.95 to $15.05 and resistance at $16.00. The November contract down to $13.04 yesterday, gap from $13.74 ½ to $13.91 ¼ and resistance at $14.80. September KC Wheat down to $8.54 ½ overnight with resistance at $10.10. September Chicago wheat to $8.00 ¾ overnight and resistance at $9.56. September MPLS wheat $8.75 ½ for a low overnight and resistance at $10.50. August soybean meal actually holding a 2-month long higher trend with support at $400 and resistance around $440.
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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