[Thurs]: A total of 161 of the 294 head offered in the FCE auction were sold, with one lot going for $124 and the other at $124.25, Brugler Marketing said… A total of 161 of the 294 head offered in the FCE auction were sold, with one lot going for $124 and the other at $124.25, Brugler Marketing said… [Weds]: Boxed beef cutout values this afternoon were firm… Choice was up 55 cents… Select fell 73 cents… In negotiated cash sales in Nebraska, the USDA reported 1,171 head sold live at $124, and 42 sold dressed at $198. In Iowa-Minnesota, there were no reportable live sales, and 34 head were sold dressed for $199. The cattle market was looking for positive signs to sustain and build on its gains from earlier in the week…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 2/7/2019 9:36 AM
Cattle - There may be some more weakness in the beef market as the restaurant industry slowly works off meat which was not sold last week, The Hightower Report.
Week-to-date USDA estimated FI cattle slaughter is 353,000 head through Wednesday. That is up 4,000 head from last week and 7,000 above the same week last year, Brugler Marketing said.
“Carcass weights have been running light due to poor pen conditions,” Brugler Marketing said.
A total of 161 of the 294 head offered in the FCE auction were sold, with one lot going for $124 and the other at $124.25, Brugler Marketing said.
Swine fever spreading
Japan's swine fever outbreak has spread to five prefectures and more than 10,000 pigs will be culled, said a Japanese government spokesperson, according to Reuters news reports.
For beef, long-term things look good; short-term, it’s more questionable, said The Hightower Report.
”While consumer demand may be exceptionally strong and could emerge as the bullish force longer-term, demand concerns persist, and with the overbought technical set-up and the premium of futures to the cash, a short-term correction is possible,” according to Hightower.
Wed 2/6/2019 5:12 PM
Boxed beef cutout values this afternoon were firm on Choice and weak on Select on light to moderate demand and light offerings.
Choice was up 55 cents to $217.57/cwt.
Select fell 73 cents to $212.37.
In negotiated cash sales in Nebraska, the USDA reported 1,171 head sold live at $124, and 42 sold dressed at $198. In Iowa-Minnesota, there were no reportable live sales, and 34 head were sold dressed for $199.
The cattle market was looking for positive signs to sustain and build on its gains from earlier in the week. “Meanwhile, live cattle prices have so far been unable to take out the sweeping bearish key reversals from last week and may still find technical sellers, especially if cash fundamentals soften up,” Stewart-Peterson said.
Beef demand remained a concern. “April traded closed moderately lower on the day as traders are a bit concerned that beef demand could remain sluggish,” the Hightower Report said. “Talk that there is enough beef supply short-term and that eventually, the cattle backed up from muddy feedlots in December and early January will make it to market helped to pressure.”
Cattle slows, hog tone bearish
Cattle markets slowed after recent gains. “Cattle markets are moderately lower this morning,” Stewart-Peterson said. “Early-week gains have been impressive, due mostly to an unexpected surge in retail beef values. However, now that we have entered the second half of the week, the market will need to see packers pay up for cattle to sustain this near-term strength.”
The hog markets slipped lower, with demand concerns continuing. ”April hogs closed moderately lower on the day and near the lows of the day. June also closed lower,” the Hightower Report said. “The demand tone remains bearish.”
Grains hold steady
Corn prices continued their trend of mostly holding steady, waiting on Friday’s USDA report. “The corn price action yesterday is being somewhat mirrored today, with early tests of nearby support levels and then gently pressing prices higher,” Stewart-Peterson said. “The market is currently prepping for and closing positions going into Friday's USDA reports.”
“Some feel the soybean market is overpriced given large global supplies, improving South America weather and potential drop in China demand for soybeans,” Steve Freed, VP of Grain Research for ADM Investor Services, said. On Friday, USDA is expected to estimate World soybean stocks near 113 mmt vs 115 estimates in December.”
“The corn futures market continues to search for new news to break it out of the trading range it has been in since October,” Steve Freed, VP of Grain Research for ADM Investor Services, said. “Interesting that open interest has increased despite the sideways trade action. Some feel this could be new positions in front of the USDA report and hopes for China to buy US corn.”
There are reports of rain chances in major winter corn growing areas of Brazil. “It remains dry and hot in central and northern Brazil, but the weather patterns are starting to change and feature at least some showers in important Winter Corn growing areas,” Jack Scoville, with the Price Futures Group, said.
Analysts continue to watch the African Swine Fever situation in China and its soybean impact. “Some though feel China imports may drop below 85 mmt due to African Swine fever, Steve Freed, VP of Grain Research for ADM Investor Services, said. “Lower China soybean crush could increase they vegoil import demand. This could be helping soyoil futures trade higher.”
“Soybeans remain a weather market,” Jack Scoville, with the Price Futures Group, said. “South American weather remains too wet in Argentina and southern Brazil and too dry in western Parana and parts of Mato Grosso and Mato Grosso do Sul. These weather trends are finally starting to change, but it is too late to help most Soybeans in Brazil.”
Wheat markets were down but saw some signs of optimism on the horizon. “The recent strength in the calendar spreads has suggested that US wheat exports could pick up into the second half of the marketing year,” the Hightower Report said. “Recent issues with Russian wheat availability are also stoking the potential for US wheat exports.”
“Interesting that open interest has increased despite the sideways trade action,” Steve Freed, VP of Grain Research for ADM Investor Services, said. “Some feel this could be new positions on hopes for new US export business. Also interesting that spreads continue to be wide and reflect more supply than demand."