Pure Hedge - Livestock and Grain
5/3/24
The Grains and Cattle Markets have had big moves higher this week, but I am looking forward to next week. The Livestock Markets were all lower today. June'24 Live Cattle were 12 ½ cents lower today and settled at 176.67 ½. Today's high was 177.60 and the 1-month high is 179.65. Today's low was 175.92 ½ and the 1-month low is 170.25. Since 4/3 June'24 Live Cattle are 1.07 ½ higher or just over ½%. The Feeders fell a little lower. August'24 Feeder Cattle were 47 ½ cents lower today and settled at 254.75. Today's high was 255.85 and the 1-month high is 261.80. Today's low was 253.75 and the 1-month low is 243.27 ½. Since 4/3 August'24 Feeder Cattle are 2.20 higher or almost 1%. The Hogs continued lower. June'24 Lean Hogs were 97 ½ cents lower today and settled at 98.95. Today's high was 99.92 ½ and the 1-month and 52-week high is 109.65. Today's low was 98.82 ½ and that is also the new 1-month low. Since 4/3 June'24 Lean Hogs are 5.780 lower or almost 5 ½%. The Cattle slaughter was 0.3% lower on 5/4 at 619.000 head, well above the 5-year average of 606.273. Beef production was 523.9 million pounds, a 3.3% rise from last year at 507.3, and much above the 5-year average of 494.1 million pounds. Cattle slaughter weights on 5/4 were still high at 848 pounds, that's 29 pounds heavier than last year, and an increase of 3 ½%, and more than 31 pounds heavier than the 5-year average. There is still too much beef in the market, and that will continue a little longer, with feedlots still full of heavy Cattle. I remain Bearish the Cattle Markets.
The Grain Markets had a big week and I think that can continue for the Corn and Wheat Markets. Today all the Grains were higher. July'24 Soybeans were 16 cents higher and settled at 1215. Today's high was 1216 ½ and that is also the new 1-month high. Today's low was 1197 ¾ and the 1-month low is 1145 ¾. Since 4/3 July'24 Soybeans are 18 ¼ cents higher or about 1 ½%. The Corn Market was slightly higher today. July'24 Corn was ½ a cent higher and settled at 460 ¼. Today's high was 468 and that is also the new 1-month high. Today's low was 457 ¼ and the 1-month low is 435 ¾. Since ¾ July'24 Corn is 15 ¼ cents higher or almost 3 ½%. The continued to shoot higher today. July'24 Wheat was 18 ¼ cents higher today and settled at 622 ½. Today's high was 632 ½ and the 1-month high is less than a penny higher at 633 ¼. Today's low was 603 and the 1-month low is 550. Since 4/3 July'24 Wheat is 50 ¼ cents higher or close to 9%. Soybean exports have not been very good this year and fell to their lowest level since 2019-2020. March exports were 3.05mt, compared to 5.26mt in February. Soybean ending stocks are projected at 325mb, the most since 2019/2020. The Crush has been strong, but Argentina is about to start exporting their crop. Soybean plantings are expected to rise to 86.5 million acres, as Corn acres are expected to drop 4.6 million acres from last year to 90 million acres. The rains in Brazil have scared the shorts out of the Soybean futures again, as the open interest in July'24 Soybean Puts continues to rise. Brazilian State, Rio Grande Do Sul has an estimated 40% of their Soybeans left to harvest, but were expected to produce 68% more soybeans this season, compared to last according to CONAB. Emater projects a record crop of 22.25mt, up 71.5% from a year ago, in Rio Grande Do Sul. I feel there will be a large number of Soybeans produced in Brazil this year, more than expected. We will see how everything plays out next week, and after the Report on Friday. I remain Bearish Soybeans.
-Bill
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