Date: May 15th, 2023
Livestock futures finished the week triple digits higher and for the week while lean hogs were steady to higher. Weekly export sales in the meats were in neutral territory for beef and friendly for pork, just not as bullish as the past couple weeks. Negotiated cash fed cattle trade was again weaker this past week with trade in the South at $170 live, $2 lower than the week previous. Trade in the North at $176 to $177 live, $1 to $3 lower and dressed trade at $280, $1 lower than the previous week. USDA updated the meats balance sheets with 2024 beef production published for the first time and projected at 24.813 million pounds, the lowest since 2015, which was the lowest beef production in the past 3 decades.
Weekly closes for livestock futures and meats…June Live Cattle +$2.47, August +$2.95, May Feeders +$2.95, August +$7.55, June Lean Hogs +$.32, July -$.10. Choice Boxed Beef -$4.58 at $304.61 and Pork Carcass Cutout +$1.54 at $83.41.
Oklahoma Weekly Cattle Auction Summary
Livestock Weighted Average Report for 5/7/2023 – 5/13/2023
Receipts: Current Week 27,770 Last Week 25,957 Last Year 28,489
Compared to last week: Feeder steers mostly steady. Feeder heifers steady to 3.00 higher. Stocker steers and steer calves steady to 5.00 higher. Stocker heifers and heifer calves steady to 2.00 higher. Demand moderate for feeder cattle. Demand moderate to good for cattle suitable for grass. Rains fell across much of the extreme drought area of the state and more is expected for the weekend.
Cattle slaughter last week estimated at 646,000 head, up 23,000 from the week previous but down 5,000 from last year. Beef production is estimated at 526.5 million pounds with year to date down 4.7% from last year while slaughter is down 3.1%.
Hog slaughter last week estimated at 2,375,000 head, down 72,000 compared to the week previous but up 12,000 compared to a year ago. Pork production is estimated at 515 million pounds with year to date 0.9% higher compared to a year ago and slaughter up 1.5%
Boxed beef cutout values on Friday steady to lower on moderate demand with 115 loads sold.
Choice Cutout__304.61 -1.11
Select Cutout__284.68 +.10
CME Feeder Cattle Index__200.58 +1.12
CME Lean Hog Index__75.91 +.51
Pork Carcass Cutout __83.41 +.19
June live cattle back above all major moving averages with support at $161.20, resistance at $165.77 and the contract high at $166.27. May feeders sharply lower two weeks ago with support at $202 and resistance around $206 then $208. June lean hogs down to a new contract low last week at $82.72 with resistance at $87.
Friday brought new lows for both December corn and November soybeans as the USDA report was a little more bearish than expected. Wheat futures though rocketed higher, led again by KC wheat as USDA’s wheat production estimate was less than expected. Winter wheat estimated 2% higher than a year ago, but HRW this year estimated at only 514 MBU compared to the average trade estimate of 591 MBU. Kansas wheat crop is estimated at 191.4 MBU compared to 244.2 MBU last year. Old crop all wheat ending stocks were left unchanged at 598 MBU while new crop is projected lower at 556 MBU. Old crop corn stocks up 75 MBU to 1.417 BBU as exports were decreased (not a surprise) and new crop ending stocks projected at 2.222 BBU. The average trade estimate was just shy of 2.1 BBU. Old crop soybean stocks up 5 MBU to 215 MBU with imports up 5 and no increase in exports. New crop ending stocks projected at 335 MBU, near the upper end of the trade estimates.
Argentine production estimates left unchanged as most were looking for further cuts and Brazil’s already record crops projected higher. USDA increased Brazil’s soybean production estimate by 1 MMT as expected to 155 MMT but surprised the market with a 5 MMT increase in corn production now up to 130 MMT. The first 2023/2024 world ending stocks were also a surprise with wheat, corn and beans all above the average trade estimates and new record levels.
Weekly closes in the grains… July Corn -$.10 ¼, December -$.26, July Soybeans -$.46 ½, November -$.56 ¼, July KC Wheat +$.44, September +$.37, July Chicago Wheat -$.25 ¼, September -$.24, July MPLS Wheat +$.10, September +$.08 ½, July Soybean Meal +$6.8/T, December -$4.4/T.
Grains steady to higher overnight as KC wheat continues to lead the rally, soybeans reversing higher with both helping corn pull back to steady earlier this morning. Outside markets showing equities lower, US$ lower and energies higher. Corn finished the overnight 1 to 5 higher, soybeans 8 to 14 higher, and wheat 15 to 27 higher.
With the report behind us, grain markets back to focusing on the Black Sea negotiations and US weather. There were conflicting reports over the weekend as to whether or not the safe shipping corridor deal would be renewed. As of Monday, no further talks are planned this week with the current deal set to expire on the 18th. This week’s U.S. weather forecast starting and ending wet across the southern half of the country. The 6-10 day outlook showing above normal temps north and west and below normal temps south and east with above normal precipitation in the Southwest and below normal from the PNW to the Corn Belt. There could be some support from the extended forecasts showing hot and dry across the Corn Belt.
July corn choppy the past couple weeks with support around $5.70 and resistance at the $6 level. December hit a new 16-month low overnight at $5.03 ¼ with resistance at $5.37. July soybeans testing support overnight with the recent low from March 24th at $13.83 ¾ and nearby resistance at $14.18. The November contract also testing support with last summer’s low at $12.17 ¼ and resistance at $12.53 then around $12.85. July KC wheat still racing higher, now over $1.70 higher from the new lows on May 2nd with resistance next around $9.50. July Chicago wheat still holding the long-term lower trend with the recent low at $6.03 ¾ and resistance at $6.69. July MPLS wheat hit a new contract low on May 3rd at $7.69 with resistance at $8.95. July soybean meal breaking the month-long lower trend with a recent low last week at $416.10 and resistance at $452.
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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