[Thurs]: National carcass base up 85 cents… Iowa-Minnesota carcass base jumped up $1.66… USDA reported carcass cutout values this afternoon fell 14 cents… The hog market is being driven by expectations that China will begin buying U.S. pork soon, The Hightower Report said. February hogs finished higher on an inside trading day, while June hogs hit its highest level since Dec. 21…
Farm Commodity Newsletter/Iowa Farmer Today
Fri 1/4/2019 8:37 AM
Lean hogs - Allendale noted that pork production tends to drop down seasonally in the first quarter of the year, marking the second lowest supply quarter. “Declines from Q4 to Q1 have been noted in nine of the past ten years,” Allendale said. Last year the drop from 2017’s fourth quarter to 2018’s first quarter totaled 151 million lbs.
“Price action was uninspiring again (yesterday), with the nearby February contract briefly testing its 200-day moving average resistance level for the second day in a row and subsequently falling back below later on,” Stewart-Peterson said. “The April contract traded about halfway up yesterday's trading range and then sold off for a lower close.”
Cattle has hope for bulls, hogs positive
A late bounce in cattle yesterday “leaves some hope for the bulls and the surging open interest is also a positive force,” The Hightower Report said. They noted that negative forces will be coming from the weather and the possibility beef prices could trend lower.
Cash markets “seem to have stopped going down and traders are hopeful that China will emerge as a strong buyer of U.S. pork soon,” The Hightower Report said. “The jump in open interest and improved technical action in June hogs are positive forces.”
Thu 1/3/2019 4:54 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base up 85 cents to $47.40/cwt.
National live rose $1.09 to $37.00
Iowa-Minnesota carcass base jumped up $1.66 to $48.53
USDA reported carcass cutout values this afternoon fell 14 cents at $69.90/cwt.
The hog market is being driven by expectations that China will begin buying U.S. pork soon, The Hightower Report said. February hogs finished higher on an inside trading day, while June hogs hit its highest level since Dec. 21.
“I think tomorrow’s session … will be pivotal in setting the tone in next week’s trade,” Oliver Sloup of Blue Line Futures said. “We’ve seen continued outbreaks of African swine fever in China. This has our bias leaning toward the buy side.”
Hogs mostly up, cattle falls
Hog prices were able to find more room to “run higher” as futures went up for the third session in a row, Michael Headlee of CHS Hedging said. This marked the second day in a row February hogs traded above the 200-day moving average, but closed just below.
The cattle market is “still under the negative technical influence of the key reversal on Monday” sparking selling, The Hightower Report said. With a dry and warm weather forecast coming into the plains, increased marketings are expected, and that could cause lower beef prices.
Markets getting back to normal trade
“We are through the dreadful holiday trade,” Oliver Sloup of Blue Line Futures said. “We are getting a little more participation, which means more volume. We look for volume to confirm price and we are moving higher with more volume.”
The government shutdown, now in its 13th day, is stressing farmers as it is affecting assistance and loan payments, Reuters said.
Technical buying helped the corn market go up today, Michael Headlee of CHS Hedging said. “The weather forecast in Argentina still calls for favorable rains to cover most regions late in the weekend through the middle of the next week.”
Corn futures have been following soybeans and wheat in the past sessions, “but today’s move may give it a more technical move to the upside, especially if front month futures can trade above the $3.80 level,” Stewart-Peterson said.
Looking ahead, ADM Investor Services said that trade is “still looking for a slight drop in U.S. 2018 soybean crop, record Dec. 1 U.S. soybean stocks and the potential for the USDA to lower the estimate of the 2019 Brazil soybean crop estimate.”
“With November beans trading around the $9.50 range, it may lead us to having another strong year of soybean acres, given some of the higher nitrogen prices that we are seeing … for corn production,” Janelle Brinksneader from The Andersons said.
Higher European prices may have given wheat a bid today, as a recent bounce in Russian prices (and buyers not willing to pay that higher price) caused the prices in the EU to go up, ADM Investor Services said. They also noted that Argentinian wheat could be seeing lower wheat quality and rumors China may have interest in U.S. grains, such as wheat, are helping support.
There is concern that “hard red wheat acres in Kansas, Texas, Nebraska and Oklahoma will not increase as much as traders originally thought,” The Hightower Report said They note that trade will likely have to wait for the winter wheat seeding report due to the government shutdown.