[Mon]: National carcass base up 21 cents… Iowa-Minnesota carcass base down 39 cents… USDA reported carcass cutout values this afternoon rose $1.13 cents… cash markets are weak, but products got a nice bounce this afternoon. “The hog market needs a bit more love going forward”… “If the production chain can slow down, pork values should rally…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 2/5/2019 9:15 AM
Lean hogs - The sweeping reversal from a six month low from February hogs is seen as a positive development with April hogs seeing a steady flow of buying throughout the session yesterday to close near limit-up on the session, said the Hightower Report.
According to Hightower, ideas that market is oversold and that the January active slaughter pace may ease for February helped to support the market.
But export opportunities may arise later this year. In China, small farmers producing fewer than 500 pigs for slaughter each year account for about 42 percent of that country’s pork output. This opens the door for tightness later this year for China pork so exports from the U.S., Europe, Canada and other key exporters should surge, The Hightower Report said.
Livestock futures looking positive
Cattle and hog futures were sharply higher on technical buying, with live cattle nearing recent contract highs and lean hogs rebounding from a multi-month low, traders said. Firmer prices for pork and beef in the wholesale market also helped push future prices higher, according to Allendale.
Several countries started to reduce the amount of beef they import from Poland after a TV documentary showed an abattoir killing sick cows, the head of the meat producers lobby said. He did not name any countries or give details on the size of the cuts, Allendale said. Poland produces roughly 560,000 tonnes of beef per year with 85% of it for export.
Mon 2/4/2019 5:02 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base up 21 cents to $50.59/cwt.
National live rose 42 cents to $40.35
Iowa-Minnesota carcass base down 39 cents to $49.85
USDA reported carcass cutout values this afternoon rose $1.13 cents at $68.12/cwt.
Lean hogs were higher “on ideas of being oversold,” Ami L Heesch of CHS Hedging said. She noted that cash markets are weak, but products got a nice bounce this afternoon. “The hog market needs a bit more love going forward,” she said.
“If the production chain can slow down, pork values should rally, providing support to futures prices,” Stewart-Peterson said. “In addition, African swine fever remains an issue in China.”
Hogs, cattle bounce up
Today’s reversal for hogs brought the February contract off a six-month low. This “is seen as a positive development with April hogs seeing a steady flow of buying through-out the session to close limit-up,” The Hightower Report said.
Despite positive cash fundamentals today, “live cattle closes could be considered disappointing,” Stewart-Peterson said. “Second quarter beef production is expected to be up 410,000 lbs from the first quarter, which would be the largest increase since 2008.”
Quiet day in grains
It was a quiet day in the grains as traders are waiting for the week’s government reports, Ami L. Heesch of CHS Hedging said. “China was said to have purchased anywhere from 1.0-3.0 mmt of U.S. beans last week and this week they are off the markets as they celebrate their Lunar New Year holiday.”
Traders are waiting on Friday’s “data dump” from the USDA as they release January and February information. Stewart-Peterson said that their bias for corn is “that yield could be reduced on this report and exports increased.”
Corn stayed sideways today, “on lack of any news that could provide market direction,” Ami Heesch of CHS Hedging said. She said the Argentine crop is thought to be getting bigger on beneficial weather.
“Good demand and slow farmer selling should support prices, while lower World export prices could slow new U.S. export demand,” ADM Investor Services said. “Talk of higher U.S. 2019 supply could limit the upside.”
“The uptrend in new crop remains intact with prices reaching their highest level on Friday since early December,” Stewart-Peterson said. They said a series of higher highs and higher lows remains intact, suggesting prices “could eventually make a move toward $9.90.”
Soybeans were 3-4 cents higher on the open today, but Ami Heesch of CHS Hedging said they failed to hold onto their gains. The strength came out of the recent China news, but there is also talk we could “see an upward revision to last year’s Brazilian soybean crop which was last reported at 120.3 mmt.”
Despite a higher U.S. dollar, U.S. wheat managed to hold some small gains, Steve Freed of ADM Investor Services said. “Wheat export prices are competitive, but key buyers like Egypt continue to buy Russia and east Europe,” he said. “This offers resistance to prices.”
“The market continues to find underlying support from the rising Russian wheat prices and slowing export pace,” The Hightower Report said. They noted that Russian export prices are staying relatively steady at $245 per ton last week, after four straight weeks of increases.