[Thurs]: … Of yesterday’s 571 head offered at the Federal Cattle Exchange yesterday, zero were sold… [Weds]: Boxed beef cutout values this afternoon were steady… Choice fell 14 cents… Select fell 79 cents… In negotiated cash sales, there was no reportable trade in Nebraska, according to the USDA. In Iowa-Minnesota 76 head sold dressed at $194… “With a dry forecast for the Plains, traders suspect active marketings and the possibility of lower beef prices just ahead, and this may be a factor to slow the buying near contract highs,” the Hightower report said…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 1/10/2019 9:31 AM
Cattle - With a dry forecast in the Plains, trader suspect active marketings ahead. That coupled with the possibility of seasonally lower beef prices could slow buying in the future near Tuesday’s contract highs, The Hightower Report said.
They noted that with an "ample short-term supply, we cannot rule out a short-term downside technical correction in cattle."
Of yesterday’s 571 head offered at the Federal Cattle Exchange yesterday, zero were sold.
Cattle futures finished the past two sessions with some conviction, but that fizzled slightly in yesterday’s session as recent buyers were looking to reduce risk and take profit, BlueLine Futures said.
Wed 1/9/2019 5:10 PM
Boxed beef cutout values this afternoon were steady on Choice and lower on Select on light to moderate demand and offerings.
Choice fell 14 cents to $213.84/cwt.
Select fell 79 cents to $206.47
In negotiated cash sales, there was no reportable trade in Nebraska, according to the USDA. In Iowa-Minnesota 76 head sold dressed at $194.
The slight cattle declines were not a surprise. “Cattle markets are slightly lower this morning after likely seeing reversal gains too quickly so far this week,” Stewart-Peterson said.
Analysts are also watching the regional forecast. “With a dry forecast for the Plains, traders suspect active marketings and the possibility of lower beef prices just ahead, and this may be a factor to slow the buying near contract highs,” the Hightower report said.
Trade talk boosts hogs
The U.S.-China trade talks helped drive pork prices. “Hog markets are showing strong gains due to progress in U.S./China trade talks and speculation that China could begin to import more U.S. pork products,” Stewart-Peterson said.
“Beef values have remained steady this week despite the sharp gains in cattle futures,” Stewart-Peterson said. “This is likely keeping packers from paying up for slaughter inventory, at least at this point in the week. The jump in futures yesterday may have left cattle a bit overbought, so some consolidation or slight correction is not necessarily a bearish development.”
Soybeans ship to China
The beginning of soybean shipments to China boosted soybeans today. “Soybeans are rising today,” Virginia McGathey of McGathey Commodities said. “Shipments to China are finally starting. It looks like we’re starting to make a little bit of a breakthrough.”
McGathey said more shipments should be heading to China in February, which gives optimism going forward. “That’s really a positive move,” she said. “We’re going to look for more coming in February as well. Finally the stalemate looks like it is going to be finding a resolution.” Both China and the U.S. reported progress and plan to meet for more talks in February in Washington.
“The carryout number really is supporting the prices right now,” McGathey said. “There has been a slight reduction to it, that’s expected to put the final number at about 1.8 billion bushels. That kind of is supporting the market, keeping it at the high side of the channel, where it has been really for the past number of weeks.”
“The ethanol production for the week ending January 4th averaged 1.0 million barrels per day,” The Hightower Report said. “This is down 1.09 percent vs. last week and up 0.40 percent vs. last year. This also was the lowest weekly production since April 20, 2018. Total Ethanol production for the week was 7 million barrels.”
Conditions in South America have also driven the soybean prices up. “There’s been some adverse weather in South American that also is supporting the rally in soybeans,” McGathey said. “We still have a ways to go before we can call it a full-on rally in soybeans.”
The optimism is countered by the China National Grains and Oils Information Center (CNGOIC) projecting soybean meal demand to drop, the Hightower Report said. “However, CNGOIC expects soybean meal demand to drop 4.7% to 66.8 million tonnes versus 70.1 million last year due to the widespread outbreak of African swine fever.”
“The wheat market backed off the highs as news came in that the U.S. fell short of expected export business,” Michael Headlee of CHS Hedging said.
“Egypt bought a total of 415,000 tonnes of wheat, all from Russia” The Hightower Report said. “The Feb. 20-28 shipment total is 295,000 tonnes at an average price of $264.54 per ton CNF while the March 1-10 shipment total is 120,000 tonnes at an average price of $265.70 per ton CNF.” These compare to $263.90 for the last Egyptian purchase, the highest in four years.