Pure Hedge – Livestock and Grain

Bill AllenGeneral Commentary Leave a Comment

5/13/24

 There was too much pressure on the Cattle markets late in the day. June’24 Live Cattle were 57 ½ cents lower today and settled at 175.57 ½. Today’s high was 17740 and the 1-month high is 179.65. Today’s low was 174.92 ½ and the 1-month low is 172.32 ½. Since 4/12 June’24 Live Cattle are 4.10 higher or almost 2 ½%.   The Feeder were slightly higher today. August’24 Feeder Cattle were 45 cents high er today and settled at 251.35. Today’s high was 253.95 and the 1-month high is 261.80. Today’s low was 250.27 ½ and the 1-month low is 245.72 ½. Since 4/12 August’24 Feeder Cattle are 5.85 higher or almost 2 ½%. The Hogs continued lower today. June’24 Lean Hogs were 90 cents lower and settled at 97.47 ½. Today’s high was 99.47 ½ and the 1-month high is 108.55. Today’s low was 96.97 ½ and that is also the new 1-month low. Since 4/12 June’24 Lean Hogs are 4.60 lower or 4 ½%.  The brain trust at the world bank recommended shifting financial support from Livestock and Farming, to fight climate change. They want wealthy nations to end subsidies, and use the funds to fight global warming, and pollution caused by eating meat and dairy. True insanity! The Feeders closed higher today, but August’24 Feeders broke more than $2.50 from their highs today. The heavy Cattle are still causing problems in the Cattle Futures Markets. Beef production is still high and negating seasonal demand. Last week’s slaughter numbers were 622,000 head, same as the previous week, but down from 644,000 this time last year. The average dressed Cattle weight last week was 848 pounds, up 31 pounds from 817 last year, and above the 5-year average weight of 818 pounds. Last week’s beef production was still heavy at 526.6 million pounds, up from 525.1 million pounds the week before. The USDA Report on Friday has 2024, US Beef production at 26.662 billion pounds, up from April’s estimate of 26.523 billion pounds. The estimates for 2025 Beef production in the US was 25.187 billion pounds, that is about 5 ½% less than in 2024. Beef production for the end of the year, is expected to drop to 190 million pounds. The Hogs did not look great today, but they managed to bounce off the lows. I think if the Hogs trade below 95.00, the selling pressure could intensify. I still feel the Cattle Markets will continue to slide lower, and I still recommend selling into strength, for a couple more months. 

     The Beans were able to close positive today. July’24 Soybeans were ½ a cent higher today and settled at 1219 ½. Today’s high was 1228 ¼ and the 1-month high is 1256 ½. Today’s low was 1211 ½ and the 1-month low is 1145 ¾. Since 4/12 July’24 Soybeans are 32 ¾ cents higher or almost 3%. The Corn gained a little today. July’24 Corn was 2 ¾ cents higher today and settled at 472 ½. Today’s high was 475 ½ and that is also the new 1-month high. Today’s low was 465 ½ and the 1-month low is 435 ¾.  Since 4/12 July’24 Corn is 25 ¼ cents higher or more than 5 ½%. The Wheat continued its hot streak. July’24 Wheat was 23 ½ cents higher today and settled at 687. Today’s high was 694 ¼ and that is also the new 1-month high. Today’s low was 654 ½ and the 1-montyh low is 550. Since 4/12 July’24 Wheat is $1.16 ¼ higher or more than 20%. Friday’s Soybean numbers, from the USDA Report were Bearish. Last week, the Funds covered most of their Bean shorts. They bought over 100,000 contracts, and that was the most for one week since 2019. That also helped to stop the Beans from breaking. The Funds are now short about 40,000 contracts. The US carryover for Soybeans was huge at 445 million, and the World Ending Stocks was a record at 128.5mmt. Tomorrow CONAB will update their Soybean production numbers for South America. It will be interesting to see where they move their number, with the USDA number already much above at 154. Soybean planting here are going well, and even with some fields being too wet, plantings are about 45% complete. I know that does not help anything, if you still can’t get in your field. The Corn and Wheat Markets still look strong. July’24 Corn is just 27 ½ cents below $5.00, and July’24 Wheat is only 13 cents away from $7.00. Keep an eye on the Corn/Oat spread… it came into 46 ½ today. Tomorrow will be another interesting day, and I am looking forward to it. 

Bill

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Bill Allen

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