Date: April 10th, 2023
Cattle futures finished out last week with triple digit gains. Live cattle gapped higher for new contract highs while lean hogs remain near their lows. Higher negotiated cash fed cattle trade again last week continues to support the rally in fats. Trade in TX and KS done mostly on Wednesday from $168 to $172 live, $2 to $4 higher than the week previous. Northern trade was reported $5 to $8 higher from $172 to $177 live and $275 to $280 dressed. Beef net export sales were average while pork sales soared to 53,200 MT, a new marketing year high and up 69% from the prior 4-week average. This alone kept the nearby April lean hog contract from making new contract lows to end the week.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 4/2/2023 – 4/8/2023
Receipts: Current Week 26,078 Last Reported (3/27) 23,678 Last Year 26,653
Compared to last week: Feeder steers and heifers sold 2.00-5.00 higher. Stocker cattle and calves 4.00-10.00 higher. Demand very good for all classes. A stretch of very dry weather continues across much of the state but the promise of some rain is once again in the forecast.
Cattle slaughter last week estimated at 603,000 head, down 48,000 from the week previous and down 62,000 from last year with year to date now down 2.8% vs. last year.
Hog slaughter last week estimated at 2,370,000 head, down 119,000 compared to the week previous and down 60,000 compared to a year ago with year to date slipping to up 1.4% compared to a year ago.
Boxed beef cutout values on Friday higher on Choice but lower on Select on moderate demand with 83 loads sold.
Choice Cutout__290.98 +1.33, +8.91 for the week
Select Cutout__275.78 -.85, +5.06 for the week
CME Feeder Cattle Index__193.22 from April 5th
CME Lean Hog Index__72.88 from April 6th
Pork Carcass Cutout __77.90 -.78, -.62 for the week
April live cattle gapping higher on Friday and hitting a new contract high at $171.42 with the all-time spot high at $171.97 from October 2014. April feeders also gapping higher but fell shy of making a new contract high on Friday. The contract high was hit the previous 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 Thursday at $71.97 with the next downside target at $70.20 and resistance at $75.25.
All but KC Wheat closed out last Thursday lower and all finished lower week over week. Last week was fairly quiet as the markets begin focusing on U.S. weather but also knew the Easter holiday shortened trading week probably wouldn’t spur much activity. Weekly export sales didn’t provide much support. The corn total at 49.1 MBU was friendly but also expected. KC Wheat again the only grain to hold in the green last Thursday, supported by the continued drought in the Southern Plains but pressured by heavily discounted world values. Egypt purchased 600,000 MT or 22 MBU of Russian wheat at $293.40/MT or $7.99/BU. This compares to SRW delivered to U.S. gulf at $7.55/BU and HRW around $10.25/BU.
Grains mixed overnight and quiet coming off the 3-day weekend. Tuesday is USDA report day though, so activity may be limited today. Outside markets have equities lower, US$ higher and energies steady to lower. Corn finished the overnight steady to lower, soybeans steady to 2 higher and wheat 1 to 6.
Again tomorrow is report day with USDA releasing the April update on supply and demand. Old crop U.S. stocks are expected lower for both corn and soybeans compared to a month ago but wheat stocks are expected to be slightly higher. The average trade estimate for corn ending stocks is at 1.319 BBU compared to 1.342 BBU in March. The average trade estimate for soybean ending stocks is at 198 MBU compared to 210 MBU in March. The average trade estimate for wheat stocks is at 574 MBU compared to 568 MBU last month.
World wheat stocks are expected nearly the same, just over 267 MMT. World corn and soybean also expected to lower than last month with the average estimate for corn at 295 MMT vs. 296.46 MMT and for soybeans at 98.5 MMT compared to 100 MMT in March. This of course due to lower estimates once again for Argentina’s crop production estimates. Most private estimates have Argentine corn and soybean production estimates another 3 to 4 MMT lower while Brazil’s estimates are nearly unchanged to possibly slightly higher.
U.S. weather this week starting out warm and dry which is good for the fall crops but continues to be hazardous for wheat, especially here in the Southern Plains. Snow pack should melt quickly in the Dakotas which will bring on some localized flooding. The 6-10 day outlook showing above normal precipitation only in the PNW, Northern Corn Belt and Southeast with below normal temps for the western half of the U.S. and above normal for the eastern quarter.
May corn taking out the short term higher trend last week with support at $6.40 and resistance up around $6.70. December still holding the long-term lower trend with support at $5.47 ½ and nearby resistance at $5.76. May soybeans have nearby support at $14.80 and resistance at $15.27. The November contract dropped down to $12.47 ½ back on March 24th but recovered since with nearby support at $12.95 and resistance around $13.40. May KC wheat holding a month long higher trend with resistance around the $9 level and support at $8.46. May Chicago wheat very choppy over the past month with support at $6.54 and resistance at $7.24. May MPLS wheat similar to KC, holding a short term higher trend, with resistance at $9.13 and support at $8.70. May soybean meal hit a new contract high back 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
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.