Great closer to end the week on Friday with almost the entire ag sector on the plus side of unchanged and some of the gains were impressive. The leader of the pack was the hog market that was still obviously trying to digest the big news from Thursday’s export sales of 53,000 mt’s and 23,800 of that total going to China. That was a monster total, it happened with tariffs still in place against those purchases and I think it really drove home the point that ASF in China has had a legitimate impact on their pork production. It has been reported that China’s hog herd at the end of February was down 16%+ from a year ago. It was also estimated that they could be in the market for as much as 200k mt’s of US product, so that will be something to watch in coming weeks in the export sales numbers.
Every hog contract finished limit up on Friday which was $3 and now turns into $4.50 limit potential today. Live and feeder cattle futures caught a strong bid on the coattails of the hog market, but they were also catching some friendly vibes from all the flooding in northern cattle feeding country.
There was continued light trade in the negotiated feedlot action going on Friday with steady $127 money being paid versus the Wednesday and Thursday action. That trade as a whole was down $1 from the previous week and dressed trade was down $1 as well.
Coming up on Friday we’ll finally get all caught up-to-date on COF numbers with the release of the March COF report. The last two reports were in arrears because of the shutdown in December and January. Positive thoughts are surrounding this release because of the potential for the On Feed total on March 1 to actually be below last year’s level. The range of estimates are between 99% and 100.1%. That drop in the On Feed numbers is taking place because of the weather-induced reduction in placements in January and February. February placements are expected in a range from 92.2% of a year ago, up to 98.6%. Marketings last month are projected between 100.6% and 101.3% of last year. If placements do in fact come in under last year’s levels, it will be the 6th consecutive month of lighter in-movement than the previous year. Prior to that, 15 out of 18 months showed higher year-over-year placements.
Cattle slg.___100,000 fri 46,000 sat wtd 593,000 -10k wa -8k ya
Choice Cutout__226.99 -.71
Select Cutout___217.34 -1.42
Feeder Index:___137.65 –.74
Lean Index.__55.40 +1.27
Pork cutout___68.89 +.09
IA-S.MN direct avg__55.61 +2.61
Hog slg.___439,000 fri 162,000 sat wtd 2.452 mln -83k wa -34k ya
Weekly closes in the meats had April lean hogs up 8.25, June hogs up 8.35, April live cattle down 57 cents, June up 97 cents, March feeder cattle -2.60 and April feeders down 77 cents.
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Grain and oilseed trade had a solid up day on Friday as well, but it wasn’t nearly as spunky as the meats. Soybeans did manage closes very close to double digits higher. Wheat was #2 on the gainer list and corn was a distant 3rd. Fund activity was estimated as buyers of 6k wheat, 12k corn and 6k beans.
All kinds of rumors floating around about US and China trade deals, but I’ll believe it when we get something inked between the two countries. The bigger issue at the moment is domestically here in the US with all kinds of transportation issues developing because of the flooding in the western and northern Corn Belt. The Mississippi was closed last week from a barge that sunk at Baton Rouge, which was cleared finally, but the Missouri is expected to set some records on peak flows from the heavy runoff to the north. Like I mentioned last week, I don’t think it has really sunk into the trade how much fieldwork needs to be done before planting this spring and there is certainly more room for premium to be added from that weather perspective.
6-10 day forecasts last night showed normal to above normal temps over all of the Plains and Corn Belt. Unfortunately, precip was solidly back to above normal across all the Plains and Corn Belt as well.
Weekly closes in the grains showed May corn up 9 cents, December corn up 7 ½, May soybeans up 13 ½, November soybeans up 12, May KC Wheat up 12 ¼, July KC wheat up 11 ½, July Chicago wheat up 20 ¾ cents and September MGEX up 6 ¾.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com
