Date: April 3rd, 2023
Cattle futures rallied last week as cash fed cattle trade soared higher. Trade in TX and KS reported at $165 to $167 live, $2 to $4 higher than the week previous. Northern trade was reported $3 to $7 higher from $168 to $172 live and $270 to $272 dressed. Also on Friday, winter storms in South Dakota while red flag warnings were posted in the Southern Plains, both hazardous to cattle. Lean hogs were mixed on Friday and for the week as nearby and cash were under pressure as USDA revised December 1st inventory up 1.28 million head even though March 1st all hogs and pigs inventory was in line with expectations at 72.86 million head. Deferred futures were supported by lower farrowing estimates for both March-May and June-August.
Weekly closes in the meats…April Live Cattle +$5.35, June +$5.52, April Feeder Cattle +$6.02, May +$7.70, August +$7.85, April Lean Hogs -$1.92, June +$.20. Boxed Beef, Choice +$2.19 @ $282.07, Pork Carcass Cutout -$3.77 @ $77.28.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 3/26/2023 – 4/1/2023
Receipts: Current Week 23,678 Last Reported (3/20) 21,121 Last Year 27,030
Compared to last week: Feeder steers 2.00-5.00 higher. Feeder heifers steady to 4.00 higher. Demand good for feeder cattle. Steer calves 2.00-4.00 higher, instance to 10.00 higher on lighter weights. Heifer calves 4.00-5.00 higher. Demand very good for calves despite the continued very dry weather and strong south westerly winds.
Cattle slaughter last week estimated at 651,000 head, up 25,000 from the week previous and up 12,000 from last year. Beef production estimated at 535 million pounds with year to date down 4.0% from last year and slaughter down 2.3%.
Hog slaughter last week estimated at 2,497,000 head, up 40,000 compared to the week previous and up 58,000 compared to a year ago. Pork production estimated at 542 million pounds with year to date up 1.1% compared to a year ago and slaughter up 1.7%.
Boxed beef cutout values on Friday higher on moderate demand with 90 loads sold.
Choice Cutout__282.07 +2.87
Select Cutout__270.72 +2.26
CME Feeder Cattle Index__193.34 +.99
CME Lean Hog Index__75.46 -.31
Pork Carcass Cutout __77.28 -1.51
April live cattle sharply higher and hitting a new contract high on Friday at $168.52. The next upside target is $170 with the all-time spot high at $171.97 from October 2014. April feeders also hit a new contract high on Friday at $202.25 with the next upside target at $205. The all-time spot high, also from October 2014 a little further away at $245.20. April lean hogs down to a new contract low on Friday at $75.00 with the next downside target at $73.55 and resistance at $80.50.
Last Friday marked the end of the month along with USDA’s Prospective Plantings and Quarterly Stocks reports. March 1st grain stocks were all below a year ago as expected with both corn and soybeans lower than the average trade estimate and wheat slightly above. Planting intentions held some surprises though as USDA’s first official corn planting estimate jumped to 91.996 million acres and soybean acres down to 87.5 million. The corn estimate was over 1.1 million acres above the average trade estimate and over 3.4 million acres higher than last year’s final planted acres estimate. The soybean acreage estimate was just below last year’s final number and 700K under the average trade estimate. Soybeans of course jumped $.30 higher after the data was released and actually helped support corn and wheat futures. All wheat planted acres around 1 million acres higher the average trade estimate at 49.855 million acres. Now that the fundamental data is behind us, markets should be focused on U.S. spring weather along with keeping an eye on the weather for Brazil’s second season corn crop.
The CFTC Commitment of Traders Report showed managed money or funds through the trade week ending 3/28 bought 28.6k corn contracts (net short 13.2k), sold 11.2k soybean contracts (net long 99.5k), sold 3.3k Chicago wheat (net short 89.8k), bought 8.9k KC wheat (net long 237).
Weekly closes in the grains…May corn +$.17 ½, December +$.06 ¼, May soybeans +$.77 ¼, November +$.46 ½, May KC wheat +$.29 ¾, July +$.27 ½, May Chicago wheat +$.03 ¾, July +$.04 ½, May MPLS wheat +$.38 ¼, September +$.39 ¼, May soybean meal +$20.90, December +$11.80.
Grains trading higher overnight as May corn and beans are into new recent highs. OPEC+ made a surprise announcement on Sunday cutting daily oil production by 1.16 million barrels per day. The production cut will begin in May and is expected to last through the year. This is also in addition to the earlier decision to cut production by 2 million barrels per day. Crude Oil futures gapped $5 higher and trading back above $80/barrel this morning. Equites are mixed this morning and US$ lower. Corn finished the overnight 4 to 7 higher, soybeans 8 to 13 higher and wheat 6 to 13 higher. USDA announced a private sale this morning of 150,000 MT or 5.9 MBU of corn for delivery to Mexico and 20,000 MT of soybean oil for delivery to unknown destinations.
U.S. weather this week featuring heavy rains to continue in the Southeast and up into parts of the already saturated ECB along with another winter storm for the Dakotas. The 6-10 day outlook showing above normal temps for the West Coast and normal to below normal temps across the rest of the nation with above normal precipitation across the Southern border, Southeast and up into the East Coast and below normal from the West Coast to the WCB.
May corn holding a higher trend since bottoming out back on March 10th at $6.06 ¾ with resistance up at $6.85. December still holding the long-term lower trend with support at $5.47 ½ and nearby resistance at $5.76 then $5.87. May soybeans sharply higher last week with support at $14.65 and resistance next around $15.40. The November contract also sharply higher with nearby support at $12.95 and resistance at $13.43. May KC wheat hit a low on March 10th at $7.72 ½, holding a higher trend since and now testing resistance around the $9 level. May Chicago wheat very choppy over the past month with support at $6.54 and resistance at $7.24. May MPLS wheat hit a new contract low on March 10th at $8.14 but trending higher since and looking to test the resistance area from $9.00 to $9.28. May soybean meal hit a new contract high on March 7th at $498, down to a new recent low on March 24th at $435, with nearby resistance at $470.
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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