Good morning! Cattle futures opened up in the green yesterday and maintained that for a few hours into the trading session, but corn had some strength out of the overnight and continued higher into the day which pressured the feeder cattle futures. Live cattle however, were resilient with just August and October finishing in the red. But, as cash feedlot trade made big advances last week, the June contract continues to try to play catch up even though it’s got quite a ways to go before reaching convergence. Both live and feeder cattle are looking trendy on the charts in the short-term as both continue to make higher highs and higher lows. In feeders, those contracts are approaching some resistance from the late April highs. For the May contract that resistance point is at $249.70 and in August resistance is at $261.80.
National Feeder and Stocker Cattle summary for the week ending- 05/18/24
Compared to last week, steers and heifers sold 1.00 to 5.00 higher. Demand was moderate to very good for all classes and types of bovines this week as ranchers are looking to alternatives to calves to fill summer grass needs. Demand for replacement females has been good this whole spring and continues to be. Cattle feeders paid little attention to the futures contracts as they know full well how tight supplies of fed cattle in the northern plains really are. Feeder offerings have been light to moderate and when a good-sized sale is held the market is incredibly active as the grass has now taken off growing as some heat has finally shown up in the Northern Plains. Currently, there is a lot of optimism in the cattle industry, despite the futures contracts that are dollars under the current cash markets.
Cattle slg.__ for Monday was 120K, +4K compared to wa, and down 5K compared to ya.
Choice Beef Cutout__312.70 -0.75
Select Cutout__299.35 +1.95
CME Feeder Cattle Index: $243.04 +0.71
Hog slg.__ for Monday was 482K, +21K from wa, and +10K compared to ya.
Lean Index. 92.22 -0.07__ Pork cutout___101.77 +0.92
In the grain and oilseed trade, it was the ol wheat market again that led the charge higher. That was to my surprise given the fact that the good folks with the Kansas wheat tour found some pretty decent potential in this year’s crop around the state that was above USDA’s projections. If there’s one thing you learn quickly in the wheat business- it’s that the wheat market does funky things like ignoring fundamentals sometimes. But hey, we’ll take it! Corn and beans also had some strength from the overnight that carried into the day session. It was good to see corn recover some of it’s losses after it tumbled off of last week’s new recent highs that were made. And the beans enjoyed a nice rally to get them closer to the recent highs that were made earlier this month.
Weekly export inspections for the week ending May 16th- were above expectations in corn and milo, but low in wheat and disappointing in soybeans. Corn inspections for the week totaled 47.7 MBU compared to last week at 39.6 M. Current MYTD is now at 1.386 BBU which is 64% of the total 2.150 BBU that USDA is projecting for the marketing year. Soybean inspections came in at a whopping disappointment of only 6.8 MBU compared to last week at 15.9 M. Current MYTD is now at 1.461 BBU, and that is 86% of the total export estimate of 1.7 BBU. Soybeans are still well ahead of corn in pace, but that is to be expected this time of year as other world production becomes marketable. Milo inspections came in at 4.9 MBU compared to last week at 5.5 M. Current MYTD is at 190.7 M, and that is 78% of the total USDA estimate of 245 MBU for the year. Wheat inspections were just 7.6 MBU compared to the prior week’s 14.1 M. Current MYTD inspections for wheat now total 656.6 MBU, and that is 91% of the total export estimate of 720 MBU- with only this week and next remaining in the wheat marketing year. With that and census adjustments, wheat inspections need to average 22.4 MBU this week and next to reach the estimated total.
Crop progress report showed that the planters have been rolling hard with the corn planting advancing 21 points to now 70% complete. I’m sure some may argue that as some folks in the Corn Belt hadn’t dropped a seed until this past weekend. Illinois is 22% behind last year, Indiana is 17% behind, and Iowa is 14% behind last year’s pace. But overall nationally, it is 6% behind last year and 1% behind the 5 yr avg pace. Soybean planting advanced 17 points to now 52% complete which is 9% behind last year but 3% ahead of the 5 yr avg pace. Illinois is 25% behind last year, Indiana is 17% behind, and Iowa is 19% behind last year. Winter wheat conditions fell by just 1% with the crop rated 18% PVP and 49% GE. Kansas is rated 31% PVP and 33% GE. Oklahoma is rated 14% PVP and 51% GE, and Texas is rated 22% PVP and 39% GE. Winter wheat headed is now at 69% which is 11% ahead of last year and 12% ahead of the 5 yr avg.
Overnight trade in the grains finished lower with corn down 1-2, beans down 6-10, and wheat down 1-3 in KC and Chicago, and MPLS down 4-5.
8am daily export sales showed a sale of 223,050 MT’s of US corn sold to Mexico and Spain. 56,525 MT of both old and new crop sold to Mexico, and 110,000 MT’s of old crop corn sold to Spain.
Wishing you all a great day, this is Tyson Loewen with Loewen and Associates. We can be reached at 785-537-3336, or check us out on the web at loewenassociates.com.