Cattle complex futures came out of the chute yesterday with a solid bullish start and $1-$2 gains in everything, but they faded fast and spent a lot of the day in red ink. Live cattle finished higher on the front four months and mildly lower on the rest. Feeders were up on the May contract and down on the rest with quite a few down more than $1.
In the negotiated feedlot cash, trade has been strung out across multiple days and all of it at considerably higher money. Southern Plains tops have been around $218, which is up $5 from last week’s top. Nebraska dressed trade topped in the $350-$352 area, which is up around $8 from a week ago. Two things to note here regarding cash; 1) those southern plains cattle were sold at a +$8-$9 basis versus spot June futures, and, 2) the top end of the Nebraska dressed trade was around $9 above the choice beef cutout quote yesterday. While it’s great to see cash outpacing futures, like I mentioned yesterday, it isn’t sustainable either and that doesn’t necessarily mean cash breaks. It just as easily could entail futures catching up.
Chart technical across the live and feeder markets are big time bullish with new contract highs posted this week once again and no resistance above the market. That being said, Wednesday’s action in the now front month June live cattle posted a bearish key reversal. May feeders did not join that party, so I guess we find out in coming days whether that formation in June fats is relevant or not.
Cattle slg.__120,000 +4k wa unch ya wtd 465, -1k wa -14k ya
Choice Cutout__ 343.17 -2.14
Select Cutout__324.28 +2.26
Feeder Index:___ 296.10 +.33
Lean Index.__ 89.57 +.32
Pork cutout___96.46 -.15
Hog slg.__483,000 +8k wa +1k ya
Moving on to the grain and oilseed trade, the close yesterday was mixed and quiet in wheat with a few more lower quotes than higher, beans were mildly higher in everything and corn was mildly higher on all but the front month May contract that’s in deliveries as of midweek and really not connected to the rest of the months anymore for that reason.
Weekly export sales were impressive in corn and beans and especially so given all the tariff fear mongering going on. Heck, China even bought some old crop beans. On the flipside, wheat and milo numbers were dismal and that’s been a constant theme in milo throughout this entire marketing year. Wheat has bounced back and forth between good at times and ugly at other times and recently it’s been mostly ugly. I pointed out yesterday that there’s 5 weeks of data left in weekly sales and inspections before the old crop wheat year closes out. USDA’s wheat export forecast is 820 mln bushels. Well, the total sales book so far is 785 mln and 102 mln of that hasn’t shipped yet. Plus, it’s inspections or shipments that make up an export, not just the sale, because sales can be cancelled or switched to a different marketing year. With only 2.6 mln old crop bushels sold this week, it sure looks to me like hitting 820 mln in total exports by the end of May is a stretch. USDA adjusted the wheat export number down 15 mln in the April report. They may go even lower in the upcoming May report.
Fund activity yesterday showed them as estimated sellers of 3500 corn, but on the buy side of 500 wheat and 2500 beans.
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