[Weds]: Hog movements may slow again, as Allendale said the bears are looking at “yet another round of winter weather to slow down hog marketings.” They noted that bears see hogs coming in above expectations and regular weather disruptions are impeding processing and movement throughout the system… [Tues]: National carcass base was 39 cents lower… Iowa-Minnesota carcass base was 23 cents higher… USDA reported carcass cutout values this afternoon fell $1.90… A combination of supply concerns and ham values contributed to lower hog prices today…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 2/6/2019 8:35 AM
Lean hogs - Hog movements may slow again, as Allendale said the bears are looking at “yet another round of winter weather to slow down hog marketings.” They noted that bears see hogs coming in above expectations and regular weather disruptions are impeding processing and movement throughout the system.
Technically, “it still appears a significant low may be in place,” The Hightower Report said. “Aggressive short-term traders might considering buying August hogs near $79.05, with $82.22 and $84.75 as initial targets.”
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
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was 39 cents lower to $50.16/cwt.
National live was 50 cents higher to $40.84
Iowa-Minnesota carcass base was 23 cents higher to $49.93
USDA reported carcass cutout values this afternoon fell $1.90 to $66.22/cwt.
Hog markets were choppy on Tuesday, attempting to provide some stability for the declining prices. “Today’s price action, while not necessarily friendly, is attempting to stabilize the hog markets at these lows,” Stewart-Peterson said.
A combination of supply concerns and ham values contributed to lower hog prices today. “The market opened near unchanged on the day and sellers turned active,” the Hightower Report said. “Talk of the short-term hefty supply plus a sharp break in ham values helped to pressure.”
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.