[Weds]: National carcass base down 85 cents… Iowa-Minnesota carcass base down 42 cents… USDA reported carcass cutout values this afternoon down 23 cents… China is reported as intending to negotiate quickly on trade topics where it finds consensus, so many traders hope tariffs on pork products will be cancelled in the next few months, Stewart-Peterson said. “Pork values appear to be stabilizing as well, another positive factor”…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 12/6/2018 8:57 AM
Lean hogs - “The overnight news about the arrest of the Chinese CFO carries a bearish tilt, and reports of additional cases of African swine fever in China may not lend much support to the market if traders feel that the China-U.S. negotiations are turning sour,” The Hightower Report said.
February lean hog futures tested support yesterday at the 200-day moving average of $65.175, and Ben DiCostanzo of Walsh Trading. “A strong bounce took price past resistance at $67.80 to the session high at $68.10.” The contract settled at $67.75, which “could be the key level for trade on Thursday.” A break out higher could test the Monday high at $68.825.
Wed 12/5/2018 4:54 PM
In weighted average negotiated prices for barrows and gilts, USDA reported:
National carcass base down 85 cents to $48.68/cwt.
National live down 20 cents to $39.05
Iowa-Minnesota carcass base down 42 cents to $48.45
Iowa-Minnesota live $37.65, no comparison
USDA reported carcass cutout values this afternoon down 23 cents at $70.88/cwt.
China is reported as intending to negotiate quickly on trade topics where it finds consensus, so many traders hope tariffs on pork products will be cancelled in the next few months, Stewart-Peterson said. “Pork values appear to be stabilizing as well, another positive factor.”
“Talk of positive comments from China officials overnight helped to support the market and buyers turned active with February hogs seeing an out-side day higher trade today with a sharply higher close,” The Hightower Report said.
Livestock mostly higher
December live cattle futures broke through $118 for the first time since Oct. 29 and January feeders rose for the first time in eight sessions, noted Michael Headlee of CHS Hedging.
Lean hog futures for December finished lower, but other months gained.
Trading light on day of mourning
With many U.S. financial markets closed for a day of mourning President George H.W. Bush, grain futures trading was fairly quiet. Some soybean traders took the day off and some tried to take advantage of the slow day, said Virginia McGathey of McGathey Commodities.
“I believe we will start hearing further noise in the market about increased plantings of corn at the expense of beans for the 2019-20 crop season,” said Sean Lusk of Walsh Trading. That prospect has merit now, but resolving trade disputes and weather could be the biggest factors determining corn prices.
“Optimism on the China trade front persists, with talk that China could enter the market for U.S. ethanol in DDGs if talks progress,” Stewart-Peterson said. March futures chart
March futures resistance is near $9.20 with support near $9.00, said Steve Freed, grain research VP at ADM Investor Services. “Demand bulls are surprised that soybean futures are not higher,” and some think China eventually will buy 5 MMT of old- and new-crop beans after China’s tariffs are removed. But he said, “Still there is plenty of beans in the world.”
In a lack of news, the market traded off rumors, said Greg Johnson of The Andersons. One unconfirmed rumor is that China may be gearing up to buy U.S. soybeans and natural gas. Another is that details of the second market facilitation payment may come out late this week. And some private analysts have pegged Brazil’s crop up to 130 MMT vs. USDA at 120.4 MMT.
March Chicago futures are below support near $5.19, said Steve Freed, grain research VP at ADM Investor Services. “Some of today’s weakness may be linked to talk of deescalating tension in the Black Sea.”
“The wheat market traded lower as Egypt news unfolds,” said Michael Headlee of CHS Hedging. Egypt’s commodity agency did not issue letters of credit on wheat cargoes.