[Mon]: Reports indicate “tens of thousands smaller Chinese hog farmers are expected to abandon pig farming after months of weak prices and restrictions on moving pigs to market,” Allendale said. They note this could reduce production by one-fifth this year, boosting prices and demand for cheaper imports… [Fri]: National carcass base down 32 cents… Iowa-Minnesota carcass base down 1 cent… USDA reported carcass cutout values this afternoon fell $1.06… This deep freeze really halted a lot of the pork movement, because hogs are normally in temperature controlled areas. With the deep freeze, they weren’t really able to transport anything”…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 2/4/2019 8:56 AM
Lean hogs - “Out of all the ag markets, lean hogs have been the thorn in our side,” Blue Line Futures said. “We want to be friendly (to) the market, but the chart continues to be a technical graveyard.” They noted there is a risk of the market retesting contract lows of $57.80.
“Packer margins are holding steady with values from last week about $65/head,” Joe Lardy of CHS Hedging said. He noted that Denmark has been building a wall on their German border intended to keep out wild boar which may bear the African Swine Fever.
Small Chinese producers could leave hogs
Reports indicate “tens of thousands smaller Chinese hog farmers are expected to abandon pig farming after months of weak prices and restrictions on moving pigs to market,” Allendale said. They note this could reduce production by one-fifth this year, boosting prices and demand for cheaper imports.
With technical action turning bearish in cattle, The Hightower Report indicated that the supply outlook going into the spring is “showing more production than in previous years.” The expected second quarter beef production is estimated to be up 410 mln pounds from the first quarter, the largest increase since 2008.
Fri 2/1/2019 4:09 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down 32 cents to $50.38/cwt. (last week: $51.32)
National live fell 12 cents to $39.80 (last week: $39.96)
Iowa-Minnesota carcass base down 1 cent to $50.25 (last week: $50.38)
USDA reported carcass cutout values this afternoon fell $1.06 to reach $66.99/cwt. (last week: $67.67)
Hogs traded on both sides of the market today, Virginia McGathey of McGathey Commodities said. “This deep freeze really halted a lot of the pork movement, because hogs are normally in temperature controlled areas. With the deep freeze, they weren’t really able to transport anything,” she said, and the back up with extra hogs pressed the market.
Demand concerns “on top of the recent jump in slaughter for the month of January,” pressured the market today, The Hightower Report said. They noted that the April hog contract is down 200 points for the week.
Livestock firms after yesterday's down action
Yesterday’s pull back should be really short-lived, as the beef market firmed up today, Virginia McGathey of McGathey Commodities said. She said there was a scare in some of the traders but some buying came in to shore up the market.
Slaughter estimates this week were estimated at 567,000 head for cattle and 2.076 mln head for hogs.
The cattle number is down 17,000 head from last week and down 19,000 head from the same stretch a year ago. Hogs were down more than 200,000 head from last week.
Grains stay green on trade
China’s vow to purchase more U.S. goods continued to help support the markets today, as grain prices continued their recent rise.
U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer are expected to head to China in February to work on some of the intellectual property theft and technology issues, as they continue to attempt to work out a deal with China, The Hightower Reort said. “Still, China has indicated tha they would be buyers of agricultural products in tandem with a trade truce.”
Corn bounced back from yesterday’s fall. “We found out that the export data was a little bit above what the forecast was, so it did fulfill what was needed,” Virginia McGathey of McGathey Commodities said. “Right now we need a little more data to get this moving.”
Yesterday’s market saw a little weakness, largely due to the Buenos Aires Grains Exchange raising their Argentinian corn production to 45.0 mln tonnes, The Hightower Report said. “They stated that early corn plants are developing so well that bumper yields are expected.” A crop at the projected mark would be a record high, nearly 4 mln over the previous record.
“The China purchase of the 5 mmt (of soybeans) really sent the market screaming and was up double-digits for quite a while,” Virginia McGathey of McGathey Commodities said. “It really relieved a lot of the uncertainty with many of the traders. It was improving some optimism that more will come.”
The upside in soybeans may be limited by the South American weather patterns, Stewart-Peterson said. “South American weather has seen some improving forecasts,” they said, “but dryness concerns may have impacted this year’s harvest.”
The U.S./China negotiations “ are helping to bring more buyers active in the grain markets,” Stewart-Peterson said. “With prospects of additional Chinese purchases, wheat may be on the list.” They noted that after a lower trading week for wheat, they are seeing some short-covering going into the weekend.
“World prices have continued to firm over the last few weeks, and the U.S. price has held or improved only slightly,” Jack Scoville of the Price Futures Group said. “USDA has not said anything about the January reports, but those will be of interest. The Wheat seedings report could easily show that not all of the winter wheat got planted in the Midwest and Great Plains due to wet conditions in the Fall planting period.”