… Some longs in the market have moved to the sidelines due to uncertainty about demand, record short-term supply of pork and poultry, and the cattle futures premium to the cash market, The Hightower Report said… “Some traders feel that if China does in fact increase purchases of U.S. agricultural goods as the U.S. reported, beef products could be an easy target,” but buying yesterday was muted, Stewart-Peterson said… [Mon]: Choice rose 47 cents… Select increased 77 cents… In negotiated cash sales in Iowa-Minnesota, USDA reported 70 head sold dressed at $182. No live sales were reported. In Nebraska, there were no cash sales reported. Early in the week, and early in the final month of the year, packers are assessing what it is they are going to need for the end of the week and year,” Virginia McGathey said. “That movement isn’t expected until the end of this week and that’s where we’ll get a little more direction”…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 12/4/2018 9:09 AM
Cattle - February live cattle futures stayed in their trading range yesterday “as a stronger cash market once again fails to lead futures higher,” said Ben DiCostanzo of Walsh Trading. “The market continues its consolidation as traders seem satisfied selling rallies and buying dips.”
Some longs in the market have moved to the sidelines due to uncertainty about demand, record short-term supply of pork and poultry, and the cattle futures premium to the cash market, The Hightower Report said. Analysts there said April live cattle buying support is at $121.05, with resistance at $122.50 and $123.85.
Traders ‘second-guessing’ talks
“Some traders feel that if China does in fact increase purchases of U.S. agricultural goods as the U.S. reported, beef products could be an easy target,” but buying yesterday was muted, Stewart-Peterson said. Analysts there noted feeder cattle futures made new lows for this move. “Prices may be a bit oversold, but momentum is pointing lower.”
Hog futures have a bearish technical tilt, and “traders are second-guessing the progress in talks between the U.S. and China and await any news about China lowering their hefty tariffs on U.S. pork,” The Hightower Report said.
Mon 12/3/2018 4:52 PM:
Boxed beef cutout values this afternoon were firm to higher on moderate to fairly good demand and heavy offerings, USDA said.
• Choice rose 47 cents to $213.08/cwt.
• Select increased 77 cents to $199.18.
In negotiated cash sales in Iowa-Minnesota, USDA reported 70 head sold dressed at $182. No live sales were reported. In Nebraska, there were no cash sales reported.
Early in the week, and early in the final month of the year, packers are assessing what it is they are going to need for the end of the week and year,” Virginia McGathey said. “That movement isn’t expected until the end of this week and that’s where we’ll get a little more direction.”
Hopes for better exports gave the cattle market gains early in the session today, The Hightower Report said, but February cattle still closed lower on the day. “While the norther Plains were hit with cold and snowy weather over the weekend, the central and southern Plains are dry so the impact of the storm may have been a little less supportive than expected,” they said.
Cattle, hogs finish mostly down
Poor weather conditions and higher cash prices have helped December cattle futures, Ami L. Heesch of CHS Hedging said. However, “cattle prices were mostly lower as the investment community shifts away from the livestock sector,” she said.
Hogs were down overall today. “The summit report really gave nothing to traders and it’s possible the market was already baked in,” Virigina McGathey of McGathey Commodities said. “… Unless there is a global redistribution of pork, it’s going to be difficult for these fundamental prices or to increase the exports to an area where we can support the prices we are at right now.”
Tue 12/4/2018 9:09 AM:
Markets look for U.S.-China action
U.S. grain futures finished higher yesterday, but “they were well off highs set early in the overnight session after the U.S.-China trade truce was announced and uncertainty grew on what, when and how much agricultural products China would buy from the U.S.,” Allendale said. “Traders will continue to watch for any signs of tariff relief and/or export sales from China in the next few days.”
“China remains silent regarding the trade truce agreed to with the U.S. in Argentina,” said Steve Wagner, market analyst at CHS Hedging. “They have not agreed to buy large amounts of U.S. commodities, nor have they agreed to lower tariffs on soybeans or cars.”
CME Group said futures will trade on their regular schedules tomorrow while some U.S. financial markets and most federal offices will be closed for a national day of mourning honoring President George H.W. Bus. Presidential Proclamation.
Corn export inspections of 40.8 mln bu. in the week ended Nov. 29 were “solid again” and the market has a “decently bullish corn story right now,” said John Payne, broker at Daniels Trading. U.S. corn offers are at the world’s lowest prices, and “Southern Hemisphere corn production looks to be below average for the second year in a row.”
Corn export inspections as of Nov. 29 reached 22.8 percent of USDA’s forecast, vs. the five-year average 16.9 percent, The Hightower Report said. China isn’t likely to buy U.S. corn, but the U.S.-China trade truce “could give pause to producers’ initial plans to reduce soybean acreage in favor of corn acreage,” and China could buy more in other feed grain markets.
U.S. corn processing volume for alcohol and other uses in October reached 513 mln bushels, up 3 percent from September but down 2 percent from October 2017, USDA said.
Soybean speculators have to play the futures, “but if you have soybeans I would do all you can to hold them because it’s really more of a basis play,” said John Payne, broker at Daniels Trading. “Right now the basis out west is brutal.” He said China’s return to buy soybeans could add 50 cents to futures.
Brazilian farmers expect their prices to drop if China lifts its tariffs on U.S. soybeans in March, “when new trade terms between the world’s two largest economies may be disclosed and South America nations will be collecting another bumper crop,” said Steve Freed, grain research VP at ADM Investor Services.
U.S. processors crushed 183 mln bushels of soybeans in October, up from 169 mln in September and 176 mln in October 2017, USDA said.
“The wheat complex took profits overnight responding to the uncertainty with U.S./China trade truce,” said Steve Wagner, market analyst at CHS Hedging. He said the price outlook this morning was 3 to 5 cents lower.
In Australia, “Winter crop production is forecast to fall by 23 percent in 2018-19 to 29.3 MMT, which reflects unfavorable seasonal conditions in most cropping regions in early spring,” the country’s agriculture department said. Allendale said Australia’s crop would be the “lowest since 2008 when output hit 13.6 MMT.”