Pretty good week for most of the meat complex as a whole. Futures were solidly higher, negotiated cash feedlot trade was up good as well, but the product trade suffered a lot of weakness. Friday’s futures close had live cattle all up mildly, feeders down moderate to actively with a couple of contracts down in the triple digits. Hogs were down on the front month July, but up in the triple from the August contract through most of the deep deferreds.
It took until deep into Friday for any interest to develop in Southern Plains cash trade. Kansas and Texas both logged $112 trade, which was up $3 from the previous week. Nebraska moved a few numbers Thursday at a $185 dressed top, which was up $5 from the previous week, then on Friday traded $183.
Coming up on Friday this week is the release of the monthly COF numbers. The range of guesses for the total On Feed supply in July 1 are from 101.3% of a year ago up to 102.5%. Placements in June have a range of estimates from 95.1% all the way up to 102.4% of a year ago. Just for the sake of comparison on total numbers, placements in June 2017 were up 16% from the previous year. 2018 June Placements were up another 1%. So, if the placement rate this past June is in the 98%-100% range, it’s still a BIG number historically. Marketings are estimated between 95.8% and 97.5% of a year ago. Last month held one less business day than June 2018 though, so a 97% number on Friday would actually equate to about 102% in actual daily terms.
Last week’s national feeder and stocker cattle summary cited steers and heifers anywhere from steady to as much as $10 higher. Coming off of the week of the 4th when sales are scarce and also being a week with a couple big events like Superior’s week in the Rockies and Western Video’s 3-day sale in Reno, Nevada, typically those are strong markets and we see a bump anyway. It also helped that futures were up quite a bit for the week with the bulk of that rally coming early in the week on Tuesday.
Cattle slg.___116,000 fri, 61k sat wtd 655,000 +82k wa +5k ya ytd +1.2%
Choice Cutout__212.80 -.97 wtd -4.87
Select Cutout___189.60 -1.19 wtd -5.20
Feeder Index:___141.06 +1.47
Lean Index.__70.73 +.08
Pork cutout___71.65 -.52 wtd -1.52
IA-S.MN direct avg__70.27 +1.06
Hog slg.___ 465,000 fri 36k sat wtd 2.415 mln +343k wa +136k ya ytd +3.3%
Weekly closes in the meats had August live cattle up 1.47, October up 1.90, August feeders up 2.77, Sept up 3.85, July lean hogs down 1.07 and August up 3.60.
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Grain and oilseed trade caught a strong shot of buying on Friday that pushed corn and soybeans up into the double digits at the close. Wheat was a follower at a distance despite the fact it performed the best by a long shot following last Thursday’s Supply and Demand report. Funds were estimated buyers of 3k wheat, 17k corn and 8k beans.
The credit for the rally on Friday likely falls into the hands of the funds and managed money buying. Forecasts were moving hotter and drier, but in the Corn Belt, heat should be viewed as a good thing for a little while at least, given the cold and wet spring most Corn Belt areas endured. Heat will help maximize GDU’s, which doesn’t help catch things up, but it certainly helps keep some crops from lagging farther behind in a year that already includes a record slow planting pace.
Emergence, silking in corn and percent blooming in beans will be closely watched numbers in this afternoon’s crop progress and condition reports. I personally don’t put much faith in crop condition numbers after the last several years of bad data, but the progress numbers still carry importance. Last week there were still 6 states with corn emergence at 95% or less. Percent silk was 8% versus 22% as the 5 year average. 4% of the soybean crop had yet to be planted versus a 99% 5 year average and Ohio had 12% of their crop yet to be planted. 90% of the bean crop had emerged compared to 98% as the average for that date. Overall this is a very late crop that’s going to require very good growing weather this summer to reach good production potential. It’s possible, but the odds aren’t in favor of great crops in a lot of areas.
Weekly closes in the grains had September corn up 15 ½, December up 17, August beans up 37 ¼, November up 37, Sept KC wheat up 22, Dec up 20 ¼, Sept Chicago up 8, Dec up 9 ½ and Sept Minneapolis was up 9 ½.
For the month so far, as of this morning’s close, Dec Corn is up 25 ½ cents, Nov beans are up 2 cents, Sept KC wheat is up ½ penny, Sept Chicago is down 9 cents and Sept MGEX wheat is down 14 ¼.
6-10 day forecasts last night were showing normal to above normal temps over all of the Plains and Corn Belt. Precip was normal to below normal through the Plains states and western part of the Corn Belt and normal precip chances from Illinois east.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener
www.loewenassociates.com