[Thurs]: “With record supply and a lack of import demand from China, the market is in search of a price which will clear the market,” said The Hightower Report. “This will likely change dramatically in the second half of the year when China emerges as a major buyer on the world market”… [Weds]: National carcass base rose 43 cents… Iowa-Minnesota carcass base was 51 cents lower… USDA reported carcass cutout values this afternoon were down 61 cents… Hog markets were looking to stabilize after recent losses. “With a mixed cash fundamental picture so far this week and no concrete developments with China, today's price action so far looks to consolidate after taking heavy recent losses and then reversing higher,” Stewart-Peterson said…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 2/7/2019 9:36 AM
Lean hogs - Hope exists for a lift of the ban on U.S. pork to Brazil. Allegedly, U.S. trade teams have been in Brazil this week to push the new president there to buy more U.S. products like wheat and ethanol, while lifting a ban on U.S. pork imports, said John Payne of Daniels Marketing.
The market trend remains down, but there are some technical signs that a low is in place.
“With record supply and a lack of import demand from China, the market is in search of a price which will clear the market,” said The Hightower Report. “This will likely change dramatically in the second half of the year when China emerges as a major buyer on the world market.”
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
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base rose 43 cents to $49.77/cwt.
National live was $1.80 lower to $38.85
Iowa-Minnesota carcass base was 51 cents lower to $49.52
USDA reported carcass cutout values this afternoon were down 61 cents to $65.61/cwt.
Hog markets were looking to stabilize after recent losses. “With a mixed cash fundamental picture so far this week and no concrete developments with China, today's price action so far looks to consolidate after taking heavy recent losses and then reversing higher,” Stewart-Peterson said. “Support levels broken yesterday have not been breached at this point.”
Hog markets do see some positive signs from the technical signals, including the possibility that the market oversold during recent losses. “Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out,” the Hightower Report said.
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."