Date: July 5, 2023
Cattle futures on Monday were mixed while lean hogs shot triple digits higher supported by higher cash and pork prices. Live cattle still hesitant to retest the contract highs from a month ago without higher cash trade. Packers should be a little short bought this week as trade and totals last week were spotty at best. Feeders traded both sides of unchanged on Monday flip flopping with corn doing the same. The National Feeder & Stocker Summary for last week reported steers and heifers trading $3 lower to $2 higher compared to the week previous, although most of the lower numbers were early week reports. Due to light receipts and many barns closed this week, there will not be another national recap until July 17.
Holiday slaughter schedules as well this week with cattle slaughter on Monday estimated at only 76,000 head and hog slaughter only 394,000 head.
Boxed beef cutout values on Monday higher on moderate to weak demand with 71 loads sold.
Choice Cutout +.62 @ 328.34, Select Cutout +.67 @ 294.30
CME Feeder Cattle Index @ 231.41, Lean Hog Index @ 94.31
Pork Carcass Cutout on Monday +5.55 @ 108.00
August live cattle now the front month trading a $10 range in June from the contract high on June 7th at $178.10 down to the recent low on the 21st at $168.10. Nearby support from $172.70 down to $172.30 and upside targets above the contract high at $181.50 then the all-time spot high at $182.87. August feeders a new contract and all-time spot high last Friday at $248.07, nearby support at the 20-day moving average at $238 and 2 open gaps below that until the recent low from June 21st clear down at $226.70. July lean hogs taking out nearby resistance to begin this week with the next up at $105.35 and support at $92.
Grains were mixed on Monday with soybeans again the leader higher, corn trading both sides of unchanged and wheat lower. All grain inspections better than the week previous but still on the low end of expectations, except grain sorghum with only 358K BU. Corn inspections totaled 25.3 MBU, wheat inspections at 12.4 MBU and soybean inspections at 9.2 MBU. Year to date for corn, soybeans and grain sorghum all still well behind the previous year, but remain on pace to hit the current USDA estimates. Weekly wheat inspections still have yet to top 10 MBU as the average needed per week is up to 14.3 MBU.
USDA reported soybeans crushed for crude oil at 189 MBU in May 2023. This compares to 187 MBU in April 2023 and 181 MBU in May 2022. Total corn consumed for alcohol and other uses was 492 MBU in May 2023. Total corn consumption was up 6% from April 2023 but down 2% from May 2022.
After the close USDA updated crop progress and conditions. Corn silking up 4 points last week to now 8% nationwide compared to 7% last year and 9% for the 5-year average. Soybean blooming up 14 points to now 24% nationwide compared to 15% last year and 20% average. Soybeans setting pods released for the first time this marketing year at 4% nationwide compared to 3% last year and 2% average. Good to Excellent rated corn up 1% to now 51%. This matched the expectations yet still well below average and below a year ago at this time at 64%. The improvements came in the ECB while the WCB got worse. Soybean good to excellent ratings down another 1% to 50% vs. expectations of 52%. MO now the worst rated corn crop at 23% good/excellent and the worst soybean crop at only 24%.
Grain sorghum planted up 12% to 92% compared to 97% average with headed up 5% to 21% compared to 22% average. Conditions down this past week with G/E down 2 points to 55%. Spring wheat headed up 20% to now 51% compared to only 18% last year and 46% average. Conditions also lower, down 2% to 48% G/E compared to 66% last year. Winter wheat harvest still behind, advancing 13% to now 37% complete nationwide. This compares to 52% last year and 46% 5-year average.
A hard open for the grains today, no overnight trade. I would have thought soybeans would lead the charge higher, but actually KC and MPLS wheat $.20 to $.30 higher at the open, soybeans $.10 to $.20 higher and corn steady to $.05 higher. Outside markets have equities lower, US$ steady and energies higher with crude oil $2+/barrel higher. Russia still not willing to extend the Black Sea safe shipping deal set to expire July 17th and also rejecting the EU proposal to allow the Russian ag bank a path to reconnect to the international SWIFT banking system.
Strong storms across parts of KS last night. Rains over this next week still forecasted to be the heaviest for KS, OK, MO and in the Southeast. The 6-10 day outlook showing below normal temps and above normal moisture across most of the Corn Belt with above normal temps and below normal moisture out West and in the South.
September corn completely taking out the May/June rally with a new recent low on Monday at $4.83 ¼ with the first line of resistance at $5.38. December corn also taking out the May low, down to $4.88 ¾ with resistance around $5.40. August soybeans poking above the $15 level with resistance at $15.05 then $15.18 ½ and support around $13.60. November soybeans hit a new recent high on Monday but resistance still holding around the $14 level and support at $12.90. September KC wheat hanging near the midpoint of the 7-month long trading range from $7.33 to $9.02. September Chicago wheat sharply lower last week after taking out the long-term lower trend with a new recent high at $7.70 ¼ and support at $6.25. September MPLS wheat has support at $8.00 and resistance at $8.46 August soybean meal very volatile this past month trading up to $438.90 two weeks ago, down to $389.50 for last week’s low and back to $433.70 for a high on Monday.
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.