6/5/24
The Livestock and Grain Markets continued to break today. The Fats settled just off the lows. August’24 Live Cattle were 57 ½ cents lower today and settled at 177.87 ½. Today’s high was 179.15 and the 1-month high is 182.15. Today’s low was 177.50 and the 1-month low is 172.70. Since 5/3 August’24 Live Cattle are 3.27 ½ higher or almost 2%. The Feeders broke as well. August’24 Feeder Cattle were 1.20 lower today and settled at 254.82 ½. Today’s high was 256.57 ½ and the 1-month high is 264.95. Today’s low was 254.22 ½ and the 1-month low is 249.05. Since 5/3 August’24 Feeder Cattle are 17 ½ cents higher or fractionally higher. The Hogs are still breaking. July’24 Lean Hogs were 1.72 ½ lower today and settled at 92.20. Today’s high was 93.75 and the 1-month high is 104.55. Today’s low was 91.80 and that is also the new 1-month low. Since 5/3 July’24 Lean Hogs are 10.45 lower or over 10%. The Livestock Markets look like they lost a fight. It has been a continual grind lower for a while now, and the feeble attempts at rallying do not last long. Today, August’24 Feeders closed below the 50-day moving average of 255.20 and have been lower for the last six trading sessions, declining $5.42 ½. August’24 Live Cattle closed below the 200-Day and the 100-Day moving averages today and have dropped $2.32 ½ over the last five days. July’24 Hogs continued to get beat up, and they closed well below all the averages, and in the last five days they are down $4.12 ½. The Livestock Markets all closed near their daily lows, and I think we can continue to see that. The Cattle weights are still impressive at 852 pounds and are 40 pounds above the five-year average, and the feedlots are still full. This has led to a lower slaughter number, but the same production. Cattle exports continue to be bad as well. I feel that the fear of another Bird Flu scare has also put pressure on these Markets. If the US Stock Market declines, that can also push the Cattle Markets lower, and if the US Dollar Index rallies again, that would be another negative for the Livestock and Grain Markets. I still feel that the Cattle Markets will continue to grind lower, and I recommend selling into any strength. I have talked about and shown Feeder Cattle charts before, and if they are an accurate indicator on where the Market will head, then it could get ugly. Protect your downside exposure.
The Grain Markets all continued lower today, and they looked like they wanted to break more. July’24 Soybeans were 1 ¾ cents lower today and settled at 1177 ¼. Today’s high was 1191 ¾ and the 1-month high is 1258 ¼. Today’s low was 1175 ¼ and that is also the new 1-month low. Since 5/3 July’24 Soybeans are 37 ¼ cents lower or just over 3%. The Corn gave a few cents back as well. July’24 Corn was 3 ¼ cents lower today and settled at 439 ¼. Today’s high was 444 ¼and the 1-month high is 475 ½. Today’s low was 438 ¼ and that is also the new 1-month low. Since 5/3 July’24 Corn is 20 ½ cents lower or almost 5 ½%. The Wheat Market took another hit today. July’24 Wheat was 11 ¼ cents low today and settled at 646 ¾. Today’s high was 664 ¼ and the 1-month high is 720. Today’s low was 642 ¾ and the 1-month low is 609 ½. Since 5/3 July’24 Wheat is 25 cents higher or just over 4%. The Soybeans looked like they wanted to head lower but were hesitant to break. The beans tried to rally once and traded as high as 1191 ¾ up 12 ¾ on the day but were quickly knocked back down. The facts remain the same for the Soybean Market. There are lots of Beans everywhere. Planting is almost done, and long-range weather forecasts look perfect. Cordonnier increased his US Soybean planting estimates by 300,000 acres, up to 86.8 million acres, with a 52 bushel per acre yield. On Monday the USDA Crop Progress showed Soybeans were 78% planted vs a 73% average, and 55% emerged compared to an average of 52%. In Brazil Emater said that the losses in Rio Grande from the flood were 2.7mt, and revised their Soybean estimates from 22mt, down to 19.53mt. With the large size of the whole Soybean crop in Brazil, that loss did not move the market, and has already been absorbed into Soybean prices. July’24 Soybeans have now traded lower for seven trading days in a row. Soybean inspections for the year are down 17% compared to last year. I still feel that the Beans will head lower. I think we can see July’24 Soybeans around the 1150-1160 range. They could bounce after reaching that level, but I continue to recommend selling into strength. After July’24 Soybeans expire, I believe the Bean Market will push lower, toward the $11.00 level, unless something happens to the US Crop. The 52-Week low for July’24 Soybeans is 1140 ½. The Corn Market has continued to follow the Beans and Wheat lower. Cordonnier cut his US Corn acreage estimates by 500,000 acres, down to 89.5 million acres, with a yield of 179 bushels per acre. The Corn and Soybeans traded down to new 1-month lows today. The 52-week low for July’24 Corn is 422 ¼. I don’t know how much lower the Corn Market can go. There has already been a cut in acres, and exports have been strong. Corn inspections for the year are up 26% from last year at this time. I have said before and still feel that more Soybeans will have been planted in the US than were expected or reported, and fewer acres of Corn planted. There will be plenty of Soybeans available this Fall. If China does not start buying New Crop Beans, there will be problem. I am still Bearish the Soybean Market and am now Bullish the Corn Market. The Wheat looks like it will continue to grind lower with the Beans, but that can always change quickly. We will see how the weekly export sales look tomorrow.
–Bill
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