[Weds]: “Packers coming out at steady money on a Tuesday may imply they’ll be willing to pay up this week,” Allendale said. Cash cattle bids came in at $124.50 in Nebraska yesterday… [Tues]: Boxed beef cutout values this afternoon were weak… Choice fell 63 cents… Select was down 31 cents… In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa-Minnesota, there were 80 head sold live for $123.50, and 76 sold dressed for $198… Traders are expecting a lot of beef production in the next quarter Traders are expecting a lot of beef production in the next quarter…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 2/6/2019 8:35 AM
Cattle - “Packers coming out at steady money on a Tuesday may imply they’ll be willing to pay up this week,” Allendale said. Cash cattle bids came in at $124.50 in Nebraska yesterday. Funds in live cattle are up 8,375 contracts on the most recent data.
Yesterday’s market was mixed, Blue Line Futures said, “with feeders under pressure and fats holding a bid.” They noted that the intraday ranged narrowed “as we settle into more of a range and market participants look for new news on the wire.”
Japan deals with swine fever outbreak
Japan’s recent outbreak of swine fever has now spread to five prefectures, such as Osaka, and “more than 10,000 pigs will be culled as part of measures to prevent further contagion,” Allendale reported.
As cattle moved toward the end of the year, The Hightower Report noted funds were building a net long position, and unsurprisingly steer weights jumped. “Don’t rule out some more weakness in the beef market as the restaurant industry slowly works off meat which was not sold last week.”
Tue 2/5/2019 4:59 PM
Boxed beef cutout values this afternoon were weak on light to moderate demand and offerings, the USDA said.
Choice fell 63 cents to $217.02
Select was down 31 cents to $213.10
In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa-Minnesota, there were 80 head sold live for $123.50, and 76 sold dressed for $198.
“Feeder contracts are holding onto some nearby support levels, and the live cattle contracts have been able to find further buyers on strong retail beef values,” Stewart-Peterson said. “Live cattle saw solid buyer interest yesterday, though closes fell off the highs and gave technical traders mixed signals.”
Traders are expecting a lot of beef production in the next quarter. “Q2 beef production is expected to be very heavy which may limit expectations for further upside after Thursday's bearish key reversals,” Stewart-Peterson said.
Hogs switch back down
Hogs were down, but a reversal could be coming. “Even with yesterday's strong gains, prices are deeply oversold, and if China starts to buy larger quantities of U.S. pork, particularly with the U.S./China trade deal, this market could reverse in a violent fashion,” Stewart-Peterson said. “In the meantime, choppy trade looks likely with large amounts of uncertain fundamental factors.”
Grains stuck, but mostly green
Grains seem to be stuck in their current range until new news breaks. “Grain markets continue to be range bound,” Steve Freed, VP of Grain Research for ADM Investor Services, said. “Managed funds are looking for some news, any news, that might break the trade out of the range either way. Uncertainty over U.S. and China trade deal limits new trade.”
Corn was up slightly, with hopes that China might buy a variety of U.S. corn products. “Support continues to come from optimism from the possibility that China could be a buyer of agricultural products if a trade deal is struck,” the Hightower Report said. “Corn, ethanol and DDG's might be high on their list of agricultural products to buy.”
“USDA will issue the January reports along with the February reports on Friday,” Jack Scoville, with the Price Futures Group, said. “The Corn data for last year is expected to show reduced production. Demand could be a little weaker as well, especially with the current weakness in the ethanol market.”
Stocks were down slightly. “U.S. corn ending stocks are estimated at 1.714 bln bushels (range 1.550-1.858 bln range) versus 1.781 bln last month,” the Hightower Report said. “World ending stocks are expected at 307.0 mln tonnes (303.8-311.6 mln range) versus 308.8 mln last month. Dec. 1 quarterly stocks are estimated at 12.066 bln bushels versus 12.567 bln bushels last year.”
News from Brazil provided resistance to soybean prices. “Improving South America weather may also be limiting the upside in prices,” Steve Freed, VP of Grain Research for ADM Investor Services, said. “There is talk that Brazil line up to load soybean is record high for February. This may be due to earlier than normal harvest.”
Soybeans did get some good news on exports with this morning’s sale of 2.603 million tonnes of beans to China, the third highest daily soybean sale ever according to the USDA, the Hightower Report said.
A few factors provided resistance for wheat prices, but there is still hope on the horizon. “Wheat futures remain range bound,” Steve Freed, VP of Grain Research for ADM Investor Services, said. “Large global wheat supplies and slow demand for U.S. exports offers resistance. Hope that China will buy US wheat as part of a new trade deal offers support.”
Analysts will also be watching for wheat seeding data late this week. “The Wheat Seedings Report could show less planted area than expected due to wet conditions in the Great Plains and Midwest at planting time for winter wheat,” Jack Scoville, with the Price Futures Group, said.